Welcome, we're just going to give a few seconds here for everybody to come into the room and then we will go ahead and get started with our Washington update. Thank you, everyone, for joining us. Brian, it looks like people are getting in. So if you want to go ahead and get started, we are good. Great. Thank you, Christy. And welcome, everybody. Thanks for joining us today. I'm Brian Flavin, Vice President of Strategic Partnerships at CASE. It's wonderful to have you all with us. And we have a lot to cover in the next 60 minutes or so that we're with you. So I just want to say again, thank you for joining us. A couple of quick housekeeping items before we get started. Number one is we are recording this. So just so that you know, so we will make the recording available post this event. We also know that we've had a number of folks register for this who couldn't join at this time, but we'll have the recording available. So just so you're all aware of that, the recording, we are recording this. The second piece, of course, is if you have questions, we have a Q&A tab that you can use to ask your questions. So please feel free to ask those throughout. We will pause at times to answer those. And we'll have at the end of this session a prolonged period where we'll be able to to essentially answer as many questions as we can. So please do ask your questions. But again, thank you for joining us. We're going to just jump right in because we have a lot to cover. And I won't say my my caveat, but that before every one of these presentations that I've been doing lately, and that is we are going to present things as they are as of the time of this webinar has begun, which is one o'clock Eastern time. Things could change. News is changing fast and there could be developments while we're speaking. So it's one of the big takeaways from this is going to be making sure you stay informed and stay updated on what's happening. And we're going to help you as much as we can here at CASE stay updated. So please be mindful that news and the pace of news is very, very fast these days. Let me just quickly introduce my my colleagues who are joining us first. I want to introduce my case colleague, Dr. Jessica Elmore. Jessica, it's great to have you with us. She is our senior director of cross-cultural learning and we'll be talking about a good portion of what I call the three buckets of issue areas that we're watching. And I'll talk about that in a second. I also want to welcome and thank Grant Berkshire for joining us, whose assistant vice president at Integer, which is a firm that we work with here at CASE, but also has been working in the tax philanthropy and nonprofit space on a variety of issues. So, Grant, thank you for joining us as well. As I said, we're going to walk through quite a few issues in this short time. And the way that I've been thinking about organizing how we discuss the issues, the many, many, many issues that are happening here in Washington, D.C., is I call it my three buckets. And so we're going to start with a little bit of context setting here and kind of what lawmakers are doing up on Capitol Hill. What's the latest? But then we're going to jump into the first bucket, which is all of the executive actions coming out of the Trump administration and the Dear Colleague letter from the U.S. Department of Education around diversity, equity, inclusion. So we'll walk through that bucket of topics and issues and take your questions. We'll then jump to another big issue of interest, particularly to research universities. That is where things stand on the National Institutes of Health, the NIH funding guidance around facilities and administration expenses. So administrative expenses. So we'll talk about that. And then we'll also talk about tax reform and what we're anticipating on tax reform, what that could mean for charitable giving, for endowments and all those issues. So we're going to try to cover all of those three buckets in this short time we have with you. Answer all as many questions as we can. If you have a topic or issue or a question that does not fit within one of these buckets, because as I said, I'm just trying to organize these as best I can. Please feel free to ask the question. And again, we'll hopefully get to as many of those as we can during today's presentation. So with that, let me start with you, Grant. Again, thanks for joining us. Can you just before we kind of dive into some specific issues, can you kind of give us the kind of 30,000 foot view of what's happening down the street up on Capitol Hill? And kind of what what are lawmakers most focused on right now? Yeah. Thank you, Brian. It's great to be with everyone here today. I would say so in Congress right now, the main item, as folks have likely seen in the news, is these budget resolutions that Republicans are putting forward that will unlock a massive tax and spending package. That will be the main legislative item at play this year. I'm sure we'll get into the particulars of that package later. But as folks have likely seen, the House was able somewhat miraculously to pass their budget resolution through this week. The Senate has some issues with the budget resolution, both the level of spending cuts included in the budgetary limits for tax cuts included in the resolution. And they now have to decide how to move forward. At the same time, government funding is up in just a few weeks. So that is about to become a major focus, probably should have been one for the last few weeks. And broadly, too, I think everyone is just getting adjusted to this new normal. It's crazy to think that we're only five weeks into the Trump presidency. But I think both parties, if you look at Republican offices, they're trying to figure out how to work with the Trump administration that is trying to move fast and isn't concerned with breaking things. I think more and more now you've seen GOP lawmakers raise concerns, whether it's about, you know, veterans in their district that worked for the government were fired or a funding program that was shut off that was benefiting their district. Folks are more willing to speak out publicly. And then I'm sure behind the scenes, there's a lot of members that are urging a more cautious and thought out approach to prevent some of these, you know, negative stories that we've seen the past few weeks. And for Democrats, part two, they're trying to figure out how they should go about opposing this administration. That really is trying to enact most of its agenda through executive actions or through a legislative process like budget reconciliation, where Republicans can advance advance items unilaterally. So Democrats are a bit powerless to combat those items. So they're trying to figure out how they can the best way to oppose the administration, some of its efforts that they disagree with. So those items are really top of mind, in addition to budget reconciliation and government funding. We've also seen the Senate work through nominations these these past month. Trump has been very successful in getting his nominees confirmed, but there's still a few more. No, notably for this group, the Senate took a procedural vote on Linda McMahon to lead the education department yesterday. And she's teed up for a confirmation vote on Monday. Those are really the main items right now. Great. Thank you, Grant. That was a great overview and a couple of couple of quick follow ups. I think one thing that I've had some questions on and that might be a little confusing to folks outside the beltway is right now, the House and the Senate have worked on budget resolutions. And so they're in those budget resolutions, particularly the House budget resolution. There's been a lot of focus and conversation around all of the particular spending cuts that are anticipated because of the budget resolution. But can you talk about does the budget resolution actually cut anything itself or does it lead is it lead to other legislation where that happens? Yes. So the budget resolution is really the first part of the process for budget reconciliation. The resolution will include a broad fiscal blueprint for the underlying bill, but the resolution itself doesn't make any changes. But it includes targets for how much committee should cut in spending and, you know, budgetary limits on something like the tax writing committee for how much they can add to the deficit for tax cuts. But it itself doesn't do anything. But both chambers need to pass identical budget resolutions to unlock that underlying reconciliation process where the committees can then go about assembling the legislation and advancing it before it'll all get bundled together. And voted on on on the floor in Congress. That's helpful. I've heard some folks say, oh, my gosh, all these spending cuts have gone into place, but that's not really where we're at in the process. This is just unlocking the tools with which Republicans, because the majority of the House and the Senate and the White House can can enact their larger tax agenda. These are the budget reconciliation and those special budget rules that they can use. One other quick follow up on that on the government funding side. That is one area where Democrats clearly do have a voice because you can't use budget reconciliation. Republicans are going to need Democrats to help pass funding, particularly in the Senate, where Republicans have a 53-47 majority. But in order to move anything through regular order in the Senate, you need 60 votes. So they're going to certainly need Democratic votes in the Senate. Can you talk a little about what do you think are the chances that we see a government shutdown on March 14th? Well, I would say it's definitely a possibility. I was reminded recently, it's a bit funny when Mike Johnson at the end of last year, the House speaker put forward his short term funding approach, extending funding into March. He said, don't worry about that deadline. Congress will have dealt with it far in advance. But now it's going to be March tomorrow and we're nowhere close to a deal. What we've seen this week is lawmakers have coalesced behind putting forward something called a continuing resolution, which is essentially a short term funding patch that keeps the government operating at current funding levels rather than doing full appropriations bills. President Trump endorsed this approach yesterday and some lawmakers on Capitol Hill are starting to assemble that package. It could, though, include some anomalies. And like you mentioned, this is unlike those items we were talking about before where Democrats are sidelined. This is something where Republicans will need them to get something passed, which gives them leverage in negotiations. And I think a real outstanding question that I have is what is the party going to fight for in these negotiations on the spending bill? They could, and I've seen some talk about this, look to include some assurances that whatever funding they allocate in this bill will be dispersed by the executive amid the funding pauses and the DOJ cuts. But Republicans have already voiced some opposition to this idea. Then on the other side of the ledger, some House Republicans and some Republicans want to codify some of the cuts that DOJ has made within this spending bill. But that's something that Democrats are not going to go for. So these competing priorities could put us in a situation where there's a staring contest and both parties will be waiting to see which side blinks first. But I think it's important, too, that neither party wants a shutdown right now, which hopefully will grease the wheels for a deal. Maybe that's a clean extension of funding or there's some horse trading around spending guardrails and codifying DOJ cuts. But, you know, again, this is just definitely an item that's going to consume much of the attention in Washington in the coming weeks. That's very helpful, Grant. And I was going to say, yeah, it'll be interesting to see how the negotiations play out, because certainly there's interest by both parties to to not see a government shutdown, but also some clear, clear dividing lines that are on both sides that are real challenges to seeing that happen. I think the other interesting thing, and there was a question that I already saw around congressionally directed spending or congressionally directed funding. I think that's the polite way of saying earmarks and earmarked funding. Of course, if there is a continuing resolution versus actual FY 25 appropriations bill, so new growth in spending, my assumption would be that continuing resolution would probably not carry along any of the congressionally directed spending. But I think that's something that's to be determined. I don't know if there's anything you want to add on that front, Grant. Yeah, I would just say quickly, I saw an article about this today. I believe there's about 15 billion in earmarks in the funding bills that if they're not included in this continuing resolution that goes to the end of the fiscal year, they'll be dead. I think theoretically lawmakers could seek to add the earmarks to a continuing resolution, but the odds of that happening would be very, very low. But we'll see, you know, lawmakers, these earmarks are very important to them. So I'm sure there'll be a lot of members fighting for them. But at this point, it does not look good for the FY 25 earmarks. And I would say for any of you who do have that, of course, you're likely working with your government relations staff and others on your institutions around this to make sure you're staying, you know, obviously in touch with your lawmakers to make sure you kind of are getting a sense of what the status is, whether those can be requests that can be then, you know, part of the FY 26 process if they are not part of FY 25, just to keep that to keep those conversations moving right now. I will say what is exactly what Grant said, like there's gonna be a lot, if they go the continuing resolution route, there's gonna be a lot of pressure to not open the door to anything outside of the continuing resolution. They always call it a clean continuing resolution, because as you can imagine, once you open the door, a lot of stuff, people, lawmakers will want to try to throw a lot of stuff in it kind of defeats the purpose and then you also lose the chance to get the votes that you need to actually keep the government funded. So lots of challenges to government funding right now, but we'll certainly be watching that. And it's not that far away. We're on February 28. We're two weeks away, essentially, from the deadline for where the Congress has to do something around government funding. Let's jump ahead to talk about bucket number one on my three bucket framework. And that is a real focus on diversity, equity and inclusion and some of the executive orders. I'm so pleased that Jessica's here to talk about this and to share some of what she's been following in this front. So Jessica, maybe I would start by, it's obviously this administration has had a clear focus on diversity, equity and inclusion DEI programs. Can you talk a little about kind of what executive actions the administration's taken so far? Yeah, definitely. So what I probably would say is President Trump's executive actions that are focused on the elimination of DEI programs for our institutions is that it actually is a continuation. So if we think back to the first term of September 2020, there is the executive action or order about combating race and sex stereotyping. And so now when we look at the second term, he's issued about four executive orders that have a clear anti-DEI focus. And so I'm just going to share just kind of a summary of some of those. So you have the executive order of ending radical and wasteful government DEI programs and preferencing. This executive order was directed by the Office of Management and Budget to terminate all DEI related mandates, policies, programs and activities within the federal government. But it also required agencies to report employees in these DEI and environmental justice positions, leading to the dismantling of the offices and the termination of related contracts. Then we have another executive order that's titled Defending Women and Gender in Ideology and Extremism, Restoring Biological Truth to the Federal Government. This executive order redefined the terms such as male, female, man and woman based on reproductive anatomy, and that excluded the transgender and intersex individuals. And it aligned with the Department of Health and Human Services new definitions of sex as unchangeable and strictly biological. Then there's the Ending Illegal Discrimination and Restoring Merit-Based Opportunity. This executive order revoked previous affirmative action mandates for federal contractors, including parts of an executive order that was signed in 1965. It prohibits federal departments from issuing contracts to private organizations enforcing DEI frameworks and directed agencies to investigate race and gender conscious employment and contracting practices. And then the last one I'll bring up is the Executive Order on Ending Radical Indoctrination for K-12 Schooling. This executive order's primary goal is to remove certain teachings and ideologies from K-12 education that the administration considers divisive and discriminatory. So although executive orders provide directives for the management of the federal government, we know that the executive orders offer a clear window into administration's priorities, and it signals what the president considers urgent and important. It's also one of the fastest ways for the administration to shape national policy. And so with the federal government serving as the largest employer in this country and the largest source of funding for organizations and programs within the United States, this signals for executive orders are sending a very chilling effect, and it's influencing actions of over-compliance and anticipatory compliance that can have a broad and lasting effect. Thank you for that, Jessica. And I was also going to add that, yeah, these executive actions are a quick way for the administration to take action, particularly around the president's priorities. But it's also important to remember that they are not statute, so there still is a significant weight in congressionally passed and obviously signed laws that go through and statutes that are on the books. So a lot of the court challenges that you've seen in some of these executive actions already are really, really tied to that, right? How much can they, how much legislating, quote unquote, can you do via executive action? And we're going to see that tension, I think, continue to play out as certainly the Trump administration and before, obviously, the Biden administration also used a lot of executive action as well, as that becomes a tool that more presidents are willing to put into use to enact their agendas. I know another big, big development in this area was just, I guess, a couple of weeks ago now, was the release of a Dear Colleague letter from the U.S. Department of Education kind of outlining, again, it's still focused particularly on diversity, equity, and inclusion, but also kind of outlining the department's view of the Students for Fair Admissions Supreme Court decision, which was a decision that was really narrowly focused on race conscious admissions, but the department added some of its own viewpoints and guidance on that. You want to talk a little about that Dear Colleague letter and kind of what it said? Yeah, so when we think about when we look at what the Dear Colleague letter emphasized, it really was about like discrimination based on race, color, and national origin is illegal and unacceptable. And so then it leads to remind schools and other institutions that receive federal funding that they have this obligation for non-discrimination laws. And then the letter also says that schools can't treat students differently based on race and must stop using race in any decisions. But the letter mentions that they have this possibility of cutting funding or there's a possible investigation if they don't comply. But the challenge comes in is with the interpretation and then that the language in the letter is so ambiguous and that it lacks clarity that it's very challenging for institutions to understand what that means for them. I mean, if they were already in compliance with like Title IX and things like that, but then it's like, well, how are we how do we need to do anything more? And so what we know for the discussions around this letter is that folks have to, of course, seek their legal counsel to see if there's anything in particular for them that they need to be paying attention to to see if they have any vulnerabilities. But it has caused a lot of uncertainty around if folks even need to do anything, if it's just reinstating that we shouldn't be discriminating based off of race, color or national origin, which our institutions have not been. Yeah, there's there's a there's definitely a clear sense that the administration is taking a very broad view of race conscious, first of all, that Supreme Court decision, even to the fact that the chief justice in that decision did create some space in students for fair admissions in the court's decision that created some space to consider race when talking about life experience in some of the essay portions of applications, as long as it wasn't determinative of admissions. So there was that space, but it was clear the letter did not provide that space, did not take that same interpretation. So it also, it was just very broad, much more obviously beyond admissions to potentially bringing in things like race conscious scholarships, other programs, separate graduation ceremonies, all those, all a very, very broad interpretation. And Christy just posted in the chat to all of you, the letter that Jessica was alluding to from the American Council on Education that we've signed as case, but a number of other, I think about 80 or so other associations have signed back to the department, asking them to, making, raising some concerns about the Dear Colleague letter, the fact that it was mainly a lot of legal and process concerns. So the fact that the interpretation was beyond, of the Supreme Court's decision was beyond what the court decided. Also the 14 day compliance period, which technically I think ends today, given that the Dear Colleague went on the 14th, how unreasonable that was. And also asking and encouraging that the department should have gone through a normal rulemaking, full rulemaking process with stakeholder guidance before issuing such guidance. Now in the letter, they do say that this is guidance. It doesn't carry the force of law, but the other challenge with that is they also make it very clear, as Jessica said, that there's, that they're looking at this, this is their interpretation for enforcement purposes, for the investigations that they launched at the department. So clearly I think that's where a lot of the uncertainty lies and kind of why we have institutions trying to figure out what to do in the context of this Dear Colleague letter. I'm wondering, Jessica, in any of the conversations you've had with our, with case members and others, how do you think, what are institutions doing or what do you think institutions should be doing now? Obviously you mentioned legal counsel. I think that's the most important thing is working with legal counsel, looking at all the different programs and policies and things you have in place. But are there anything else that you've heard that institutions are doing? Yeah, well, there's some of the things as in just kind of come into terms with, you know, the threat of investigations is that you may not be able to protect yourself from an investigation, especially when they have opened up a form that anyone could submit something. So it's really trying to help organizations to be prepared for what that process is so that they're not feeling kind of all over the place if they get inundated with, you know, people just making assumptions that there might be something that's happening and then that triggers an investigation. So really trying to build the capacity of trying to not have any investigations that may not be realistic. We know that our case members really already have been evolving their external and internal processes and marketing materials due to the compliance for SFFA. And when we think about some of the state legislative laws, so they have already been making some of those changes and also being able to speak more, speak about how they're making decisions about things. So I would say that for those who are not in states where they don't have those kinds of legislative laws, being able to reach out to other folks within spaces that do to be able to kind of do some sharing about how people have been going, you know, going with this, the changes and how to help with the processes. I think that I've also been seeing a lot of our members join in on webinars just like this with other places and really trying to build a source of community. I mean, if you're on any of the webinars in the chats, they're actually like trying to help folks from a mental stress aspect that you're not alone because sometimes it can feel like that. So we're seeing a lot of folks gathering information but then also building community there, especially because it's very complex and it's fast moving. And then really looking at trying to figure out how, now I'm getting probably questions about how to talk about this with your alumni and donors. They're dealing with a crisis, you know, but they're not maybe as plugged in as some of our, you know, as we are, as we're doing webinars and things like that. Members are also thinking about their staff and self-regulation around uncertainty and the amount of stress. So we are trying to figure out how to provide some support for our members in that way. No, I think that's helpful, Jessica. And I know we've talked also about potentially as a follow-on to this, to dive a little bit deeper, provide some additional guidance, thinking about if we could get a legal perspective to join. Again, we can't provide legal guidance via these webinars, of course, and you're gonna wanna work with your legal counsel, but to see if we can get some advice or some perspectives from those who are looking at us from that perspective. So thank you for walking through that. And of course, as we get other questions, we're gonna have a Q&A section at the end of this, at the end of our time as well to tackle some of those questions. So thank you, Jessica. Let's jump into bucket number two. And bucket number two is the National Institutes of Health funding, guidance issue around facilities administrative costs. So I'm gonna walk through that very quickly. This was a week before the Dear Colleague letter, the NIH put out guidance around, that essentially said for any existing grants and grants, research grants moving forward, that indirect support are also known, I should say facilities administrative costs, also known as indirect support for any grants would be capped at 15% moving forward. What does that mean? What does that mean essentially for our institutions? Well, for research universities who've been getting NIH grants, many of those grants also include additional support for, that is called indirect support for FNA, Facilities Administration. And those funds are critical because they pay for the facilities. There's a lot of regulatory safety requirements around research and all of those pieces. So, and those are negotiated with NIH. So those via statute, there is a ability for NIH to negotiate with universities, with institutions directly, those indirect support rates. And so most of them are much higher than 15%. And they're on top of the grant that's granted as well. So this, essentially when this guidance was put out, it effectively met an immediate cut in research funding for universities. And I will share, and we'll talk about a couple of resources that we have, because we linked to some of these resources, but a few of our colleague associations that represent research universities and really the research function of universities. So the Association of American Universities, American Council on Education, the Association of Public and Land-Grant Universities, as well as the Council on Governmental Relations, all of those associations have kind of banded together and put together some resources on what FNA is, why it's important, and have some great resources and tools around that. What I've been, right now, that cap is actually, right now is under a temporary restraining order by the courts. So I mentioned AAU, AC, and APLU, and a number of, a couple of other entities, as well, filed lawsuit right away on this guidance, and the courts have stopped its implementation. I will say there have been some reports, though, that NIH has not been doing a lot, even though the courts have potentially paused this cap. There's not a lot of grant work happening at NIH, even in the interim, so there likely are other court challenges coming around this. But in any event, it is right now under those, that cap is not in effect, as of right now, pending court action and activity. What I've been encouraging members to do, and I know our colleague associations have, as well, is really to be weighing in with members of Congress on this. This is an area where, you know, where there is a real opportunity for institutions to talk about what FNA is, explain why that is an effective cut in research funding, why that resource is important, why it means more jobs, why it means more cutting-edge research, why it brings dollars and resources to states and communities, and that's something that members of Congress need to hear, particularly members of Congress in red states, Republican members of Congress, right? So, and we've started to see a number of senators weigh in and say things like, I appreciate what the administration's trying to do, as long as they don't hurt the great research that's happening at X university in my state. That's exactly the kind of thing that we wanna see happen, is we wanna see Congress do that. And this was something that the Trump administration attempted to do back in the first, its first iteration through Congress, but Congress never agreed to the 15% cap that way. So there is precedent to say that there, and certainly some concern has been voiced up on Capitol Hill about this approach and what that would mean for research funding and for what it would mean for states and for universities, obviously, along with other institutes that benefit from that funding. So again, I would encourage you to continue to talk about this. There's some great resources, and again, we've got them linked on a couple of the pages we'll share at the end that you can use to talk about this, but getting that message in front of Congress is really, really important right now, particularly for those of you on the research university side, and we're continuing to help amplify that from a case perspective. The final bucket that we wanna talk about before we open up for a larger Q&A is tax reform. And there's quite a bit of direction we can go here, but let's start, and Grant, I'm gonna go to you, because I want you to talk a little bit about why tax reform is so critical this year. Obviously, the big reason why taxes are on the agenda is because the Tax Cuts and Jobs Act, which of course was President Trump during the first term, and Republicans passed the Tax Cuts and Jobs Act back in 2017, and they used, as you had alluded to earlier, Grant, budget reconciliation, those special rules that allow them to only need a majority in the Senate, which is critical. They used that to pass it, but in order to pass it and to follow the rules, they, a good portion of the bill was temporary, so it expires at the end of this year, so December 31st, 2025. So things like the marginal tax rates, right now, the top marginal tax rate's at 37%. If Congress doesn't do anything this year, it goes up to 39.6% as of January 1st next year. The doubling of the standard deduction, the standard deduction threshold would go down. The cap on state and local tax deduction would disappear. A variety of things would change, so there's a lot of incentive for Republicans in Congress, in particular, to do something on taxes this year. I know that the speaker, Speaker Mike Johnson, Republican of Louisiana, has set out an ambitious timetable for tackling tax reform this year. We started to talk about this when you laid out the context earlier, but what has to happen for Republicans to move tax reform under these special rules, and do you think they can keep the ambitious timeline that they've set out for themselves? So I would say a lot has to happen, and that timeline is definitely very ambitious and gonna be hard to adhere to. Thinking about where we are right now, what I do think we got from this week with the House passing its budget resolution is that Republicans have coalesced behind a one-bill strategy for this. As folks may have seen before, the Senate had preferred a two-bill approach, starting with some defense and immigration legislation, and then doing tax reform later. With the House budget resolution advancing, although I think it could change a lot, it does seem like we're coalescing behind this one-bill approach, which will lead to an expedited consideration of tax legislation in Congress, but it's important to stress that we are still very early in this process. As I was discussing earlier with budget reconciliation, you start with the resolutions, then the committees assemble the legislation, the budget committee bundles it together, then it's put on the House floor for a vote. So we're still at that first stage in the process, and Republican senators have a lot of concerns with the House resolution that advanced this week. As folks have seen, and as Brian mentioned, it includes aggressive spending cuts, the shooting for two trillion, which could hit programs like Medicaid and other social safety net programs. And then it also only provides the tax writing committees with 4.5 trillion that they can add to the deficit to pay for tax cuts. Any additional costs accrued by the tax writing committee above that $4.5 trillion figure, which could also come down if the spending cuts aren't met, any costs above would need to be fully offset with new revenue. And extending the expiring provisions alone is estimated to cost around 4.7 trillion. But if you add in some of those other items that Trump campaigned on that Republicans want to incorporate, such as no tax on tips, no tax on social security, you're looking at a much larger package. So senators have raised concerns with both the level of budget cuts, or spending cuts included in the resolution, but then also that budget limit imposed on the tax writing committees, warning that it's not enough to permanently extend the expiring cuts. From my perspective, working primarily with philanthropic organizations, this figure is a bit concerning, as it will both limit what tax writers can incorporate beyond extending the expiring provisions. So if you're thinking about adding something like the non-itemizer charitable deduction, that could be tougher. And then it will also increase the need for the committee to raise revenue, where they could look to nonprofits or philanthropy. So from that perspective, it's not what we would have wanted to see. But now the Senate gets to decide what they want to do with the House resolution. I think any amendments that they make to the resolution to address some of their concerns will then make it very difficult to get that resolution back through the House, where it just narrowly advanced this week. So I would not be surprised to see the Senate sit on the resolution, and instead spend some time negotiating with the administration and their counterparts in the House about a compromise approach that could advance through both chambers. One major question that could come up during these negotiations concerns the budgetary scoring they will use. This is a bit wonky, but some senators want to use something called current policy as a baseline to score the bill. This is essentially a budgetary gimmick that would deem any extension of the tax cuts that are expiring to cost nothing on paper. So it would make extending the expiring provisions permanently much easier, but it's also unclear if, one, that's permissible for the budget reconciliation process, and two, if a resolution with that scoring method could advance through both chambers. And that's just one of the major outstanding questions that has to be answered. So this is a long way of me saying that getting this done by May feels very aspirational. Again, lawmakers will have to compete with other priorities as well. One interesting caveat, though, that could expedite consideration, as folks may have seen, the House budget resolution included an increase to the debt limit. This is our nation's borrowing cap. It was up in the end of last year, but Treasury can float us into early this summer, but then Congress, this is something they need to address. They can't miss this deadline. So if Republicans keep that within their reconciliation tax package, that is something that will have a hard deadline for them to advance. But again, this resolution could change. That is something that could definitely fall out of it. But yeah, Brian, a lot, I would say, has to happen, but it's important to stress, too, that the work behind the scenes at the committee level, assembling what will actually be the underlying legislation, that work is occurring right now. Yeah, no, that's very helpful, Grant. And I think that's important for folks to remember. Right now, we are in a, I'd call it a Republican trifecta, the House and the Senate Republicans, and you have a Republican president. So you can move things at a much quicker pace, but you have to all be singing from the same song sheet, even in the same party for that to happen. And what you're seeing is, even though Republicans didn't maintain a majority in the House of Representatives, they actually lost a seat compared to the last Congress. So they have an even tighter majority. Right now, they're down a couple of members because a couple of members have joined the administration, so they're waiting on special elections to fill those. So that means the House is really, it was already hard last Congress. Obviously, President Biden was president, but it was hard for the Republicans in the last Congress to get things through the House without relying on Democratic support. So you can only imagine, in this Congress, with a tighter margin, how hard it is, which is why, as I think, Grant, you said, miraculous, it might've been the term you used, but the fact that they got through this budget resolution through on Tuesday was pretty amazing, given the tight margins. But it also does show that, and the president did weigh in in that process, that there is a pathway for them to get things through with just Republican support. And they're gonna need all Republican support to get tax reform through. Democrats are not gonna support a reconciliation bill if they've been shut out of the process, clearly. So we'll see how that plays out. You talked, Grant, about some of the cost issues and all of those different pieces. Obviously, if there's a need to raise revenue, that's something we're gonna have to watch as a part of this. Do you wanna talk about, what do you think schools, colleges, and universities need to kind of worry about in terms of the potential revenue raisers Congress could look at? Yeah, so I think, unfortunately, especially if you look to the House budget resolution, schools, colleges, and universities could be targets both on the revenue-raising tax side and the spending cut side as well. Starting with tax, Republicans, especially the lead GOP tax writer in the House, Jason Smith, have continued to put forward increasing the university endowment excise tax as a revenue raiser they could use in this tax bill. As you'll recall, Republicans actually created that tax in the 2017 tax bill that they're now working to extend. There was a menu of revenue raisers put together by Republicans on the House Budget Committee that was released earlier this year. And within that menu, Republicans included a tenfold increase in the university endowment excise tax, up to 14%. We've also seen proposals in Congress to increase it to 21%, to match it up with the corporate rate. This is definitely the primary threat for higher education on the tax side. It's notable too, because this wouldn't raise much revenue. A tenfold increase in the endowment tax, putting up to 14%, is estimated to raise about 10 billion over the next decade, which is pennies when we're talking about trillions of dollars in tax cuts. But I think, obviously, higher education is also a target just due to the general animosity we've seen displayed by Republicans towards higher ed in the last couple of years. But then quickly too, on the spending cut side, so the House resolution, it called on the Education Committee to find 330 billion in spending cuts. And if we again look back to that Budget Committee menu, it included multiple proposals targeting student loan programs, including rolling back repayment or forgiveness plans. There was also a proposal to require institutions to make risk-sharing payments on federal student loans to the government. Pell grant reforms were listed as well, although we did not get many details on what they could be eyeing. But, you know, all this to say is that, unfortunately, there are a lot of ways Republicans could target education in this tax and spending package. Thanks, Grant. Yeah, there are certainly, and I think the one thing to remember about this whole process, and this is, I guess when it comes to this particular issue, I'll talk about another silver lining issue, but one silver lining piece is that, again, because the margins are so tight, if you can make the case on some of these issues of the harm that they will do on the revenue-raising side, that they will actually do more harm than good. So if you think of something like, for example, getting rid of the student loan interest deduction, you can see where that would be something where, oh yeah, it would raise some revenue, but boy, that really hits a lot of students and families, and it really hits at the cost and affordability of higher education, would they really wanna go there? And if they start hearing from a lot of people on something like that, they're less likely to wanna go there. They're gonna, the things that cause headaches and that could cause them to make it harder to get something through the house in particular are the first things they're gonna put aside, because number one thing they wanna do is make sure they get a bill passed, right? So these aren't gonna be huge revenue raisers, but they are, to the extent they cause headaches, certainly that's where we wanna make sure that they understand what the implications are of these different proposals. The same thing with the endowment tax. Obviously they're looking at that. Now, right now the endowment tax is on a certain level, private colleges and universities, and those are private college universities with endowment size of 500,000 per student, which right now is about 50 to 60 private colleges and universities. Here's what we know right now. Number one is obviously there is a focus on increasing that rate from 1.4% to higher, and in the document grant reference, it was to 14%. So there's certainly that focus. I've heard less about wanting to lower, there's certainly been proposals out there, but I've heard less about wanting to lower the threshold at this point to like 250,000 per student, though we're certainly watching that. But I've also heard very little about public colleges and universities being a part of this as of now too. But having said that, whether you're subject to the endowment tax or not, anytime there's a tax that is put on something, usually the message is, government doesn't want you to do that activity or it's one way to look at it. And in this instance, the last thing we wanna have do is for Congress, one thing if it's a 1.4% tax, but to jump to 14% or 10% or wherever, that's a significant tax on endowed giving. Of course, that's giving that goes to charitable purpose and to student financial aid, to research, to other public, the real public interested parts of college universities and their missions. But donors are gonna start asking, why am I gonna give to something where I'm gonna get taxed? Whether it's your institution subject to that or not. So I think it's important for all institutions, regardless of whether you're in this group, to understand what the implications are of expanding this endowment excise tax. And we certainly a case are working with our higher ed association colleagues, with the institutions affected and others, to make the case of why this is bad policy and why doing so is really taxing generosity and taxing charitable gifts. And it's something at a time when we wanna be increasing charitable giving, doesn't make a lot of sense to be doing things that hurt charitable giving and hurting, hurt the ability of institutions to raise the private support they need to support their mission. So we've really been leading into that. And that leads to one other quick issue before we open it up to questions that I wanna make sure. And this is, I think, the real opportunity of tax reform this year. And that is, we have a great, great opportunity to see a charitable deduction for non-itemizers included in tax reform this year. Back when the Tax Cuts and Jobs Act was passed, there was a doubling of the standard deduction threshold. Republicans did that because they wanted to make it easier for more Americans to file their taxes. And if you're itemizing, it takes more time to file your taxes, more expense. So if you increase the standard deduction and you take the standard deduction versus itemize, that simplifies your taxes. And it certainly simplified taxes for many Americans. So much so that right now we went from a world where back in 2017, you had 30% of Americans who itemized to now it's 7.5% of Americans who itemized. So very much smaller number. The problem with that is, and the unintended consequence of that doubling of the standard deduction, is that it also meant that only now 7.5% of Americans can deduct their charitable giving because you have to be an itemizer to use the charitable deduction. So we've been working the last seven years and I've been sharing the charitable giving coalition, a broad coalition of charities and nonprofits who've been focused on restoring a charitable deduction for non-itemizers back into the code to say to Congress, hey, if you continue, we appreciate the doubling of the standard deduction, but you can also make sure that by doing that, you're also not inadvertently harming charitable giving by including a deduction for folks who take the standard deduction, a charitable deduction for those who take the standard deduction. So we have a bipartisan bill that's been introduced called the Charitable Act. It's S317 in the Senate, HR801 in the House, built great bipartisan support. And we have some great, great champions, particularly on the Senate Republican side, who are really helping us push for making sure that we include a charitable deduction for non-itemizers as part of tax reform. And one of the things that we've been saying in cases, again, you heard it in the messaging I said before, Congress, you should be looking at ways to expand giving. Don't be looking at ways to harm giving. Instead, look at ways to expand giving. And the Charitable Act, the charitable deduction for non-itemizers is a way that you can do that. And that will also make sure that we're democratizing giving, encouraging more Americans to give back and reversing what has been a decades-long trend now of the number of donors declining in terms of giving to charitable organizations. So we're certainly gonna be emphasizing and pushing on the positive, proactive side in tax reform for inclusion of a charitable deduction for non-itemizers. And we'd love to have your institution supporting that effort and amplifying the importance of that work for the work that you do in your advancement offices. With that, we've covered quite a bit of ground. As we said, we wanna leave some time for questions. And I know we've got some, I don't know, I'm gonna invite my colleague, Christy, to come back on. And Christy, are there some questions that we can answer? There are. So this one came in before you guys even started talking. So you may have adjusted a little bit, but if you guys can give a little bit more insight about how pending congressionally-directed spending applications will be impacted as well as the open applications for next year. Yeah, I think as we said a little bit earlier, just to make sure we close the loop on that, anytime you have a continuing resolution, anything that's new as part of appropriations, as part of the appropriations process, and really those earmarks or congressionally-directed spending products are considered new spending each fiscal year, it's very, very difficult to get those added to a continuing resolution for all the reasons that we said before. A continuing resolution is meant to fund the government at the levels it was before. So anytime you add onto that or you make changes, and Grant talked about a couple of different things that Republicans would like to do, some things Democrats would like to do, but the problem is to get something like that through, any change you make like that upsets the apple cart and it makes a government shutdown more likely and it makes it, it really changes the nature of a continuing resolution. It becomes less of a continuing resolution and more of a new appropriations measure, which is kind of where they're stuck, is a point where they're stuck at. So I would say right now, as we said earlier, be in touch with those lawmakers who helped bring that project into the process. Make sure you're in constant communication with them. If it is a continuing resolution and it is not included in FY25, make sure you're on your game already. And I know that that's already started for FY26. I'm sure that a lot of those projects will go to the, I don't know what the right term is, the front of the line, or be up there in terms of priority for FY26 if they don't happen in FY25, but really working with lawmakers and just keeping constant communication in touch, reminding them how important these projects are, I think are the best place to be right now. I wish I had better news on a larger appropriations effort, but it really seems more recently like it's looking like a continuing resolution for all of this fiscal year versus them passing new appropriations bills, which certainly puts those projects at risk for this fiscal year. And just as a reminder, everybody, the federal government's fiscal year is October 1st to September 30th. So we're already well in fiscal year 25 under a current continuing resolution that expires on March 14th. So the question is, will Congress pass new appropriations bills, new spending for the rest of this fiscal year, or will they just pass continuing resolution to keep last year's levels the same through September 30th? And it's looking like the latter is where they're headed. Right. Someone else asked about the indirect caps, indirect cost caps, and asked if these funds can be unilaterally capped for the current federal fiscal year since they were put into place by Congress. So that is why there are court cases pending on this. That is really where, that's really the rub right there and why our colleagues at AC, APLU, and AAU filed a lawsuit along with others to stop this action. It clearly is in statute codified that you can renegotiate these rates. It's different in terms of other agencies, but certainly with NIH, it's in statute. So there is a question that is really a question for the courts about whether executive action and executive guidance can unilaterally change that. Obviously our association colleagues and the many research universities out there are banking on the fact that these are in statute, that this ability is in statute, and the courts will side with them on this, but we'll have to see how the legal proceedings play out. But certainly I think one of the, in order to get a temporary restraining order put into place, any sort of plaintiff has to get, has to make the case that there is a plausible, there's a plausible argument for why they could win on the overall merits before the arguments are made. And so clearly the fact that a federal judge did grant that and that it's continued is a demonstration that there's at least the initial sense that there's a case here that they need to figure out. So I think, and from that perspective, I think there's opportunity there, but we'll have to see how the legal proceedings play out. The other, let me just add one other thing too. One of the tensions right now that's happening around government funding, and again, as we said, Democrats will have to support Republicans to get government funding through, given the math that is particularly in the Senate. One of the real issues right now is whether, how much Democrats, maybe that ask that Grant talked about, how much would that will be things like, the administration commits to following through on with statute or codifying that in some way. Republicans have been unwilling to go there in terms of the negotiations around government funding, but clearly that is a leverage point that Democrats have or anybody, frankly, any member of any party has who's concerned about this to see if they can work some language into the continuing resolution or whatever the continued funding is for the fiscal year this year. So we'll have to watch that too as well. And that actually, the next question that I had up here to ask was about what leverage Democrats have in the budget process to force the government to honor those past spending requirements. So I think you largely just answered that, but do you have anything else you wanna add? I'm curious what Grant or Jessica, what you both think about this. My view is that it's a tough play. I mean, Democrats certainly have leveraged, no question about it. But as any party knows, the last thing you wanna do is be blamed for a government shutdown. And in the case of Democrats, Democrats tend to be more inclined to want to keep, to not go the shutdown route. They certainly have been very critical of Republicans in the past who've kind of used shutdowns as potential leverage for other policy asks and other things. So I think there's a real, there's leverage there, but it's a challenging place for Democrats in a sense, because they certainly don't wanna hurt, or at least hurt the chances of the federal government staying open as both parties don't want the federal government shutdown. A lot of them don't like what the administration is doing around the federal government, some of the actions they're taking and would like to try to find ways to protect agencies and those agencies that they funded. Like I think there was a question on USAID for example, that was appropriated money in the last fiscal year. So the question is, if you pass a continuing resolution that continues to fund the agency, but the executive branch has essentially defunded the agent or closed the agency, what happens with that funding? And are you contravening Congress? So I think there is a real tension there. We'll have to see how that plays out, but it's not an easy answer for Democrats here, because again, they don't wanna see the federal government shut down, but they also certainly, I think are a number of voiced concerns about how the administration has approached some of the decisions around spending. I don't know if Grant or Jessica, there's anything you wanna add from your perspective. Yeah, I mean, I would just echo everything you said, you're leveraging government funding, standoffs comes from your willingness to shut down the government. And I just don't think Democrats are too willing to shut down the government. I would say too, looking at the question, I don't think if Democrats were able to get some concessions from Republicans in the administration on the spending side, I don't think they would be too comprehensive. And we're talking about restarting every grant or contract that was canceled. I think there may be an opportunity for a narrow win, but again, it really depends on how willing they are to shut down the government. And it doesn't seem like too willing, but we'll see. I agree with that. Sorry, go ahead Jessica. No, go ahead. No, you're fine. No, I just, like I said, I agree. I do know that there is some folks who are pushing for Democrats to do more. And so there's that challenge as well is that folks are even saying, go ahead and shut it down. So they have to balance that as well. Oh, absolutely, absolutely. We have other questions, Christy? We do, and I think we probably only have time for about one more. And Grant, if you can answer this one really quickly and then we'll take one more. Someone had asked if you could clarify what risk sharing payments are. You were talking about them earlier. Very quickly, so this is a proposal. We've seen it in some bills on Capitol Hill, but essentially institutions would be required to make payments to the Department of Education that if people who attended that university then did not pay back their student loans, the department could tap into them or obtain them. So that's kind of the general gist of it, but we can follow up with some more information on the proposal itself. Yeah, it's sometimes called the skin in the game. It's essentially saying to universities, college universities, if you have students who default and they can't pay back their student loans, we're gonna come and ask you to pay for a portion of that since they didn't, as a part of a way to help fund that. So that's, I think, where the risk sharing piece is. Okay, great. I'm gonna ask one more question and just a reminder to everyone. If you have questions, still send them. Brian is going to put up some answers in our advocacy group. So there'll still be a chance to get those to you later. So someone had asked, the DCL mentions not using race in scholarship awarding. Is there any discussion or better understanding on how that affects private donor funded scholarships versus institutional scholarships? As a fundraiser, I am concerned about fulfilling or honoring donor intentions that these regulations have to apply to donor funded awards that give preference to certain populations. And I know Jessica, you've done a lot of work in this space. Yeah, it is gonna impact donor intent. And so I think that's what we're asking, we're getting from our fundraisers, our folks is even how to have these conversations. There are folks that are saying that people have declined doing scholarships because they're not happy with the fact that they're not able to identify. And so that's just a really delicate conversation that folks are having to make, but also some education that institutions are having to navigate, as in they are finding that they're, even though some of the decisions that are made, it feels like it wouldn't impact them, but it is. And that institutions are once again, trying not to make sure that they're vulnerable, but then also for the donors to not be vulnerable. There's been talk about, well, if we were a separate organization, could we then fund it this way? And so folks are not advising for folks to do that because then they could be opening themselves up for lawsuits. Yeah, I think there's a lot in that letter. First of all, the letter, of course, as we said before, one of the concerns, one of the reasons we obviously signed on and support what AC is sent back to the department is it goes beyond what the court said. But we do know that certainly there are gonna be legal challenges and lawsuits around race conscious scholarships moving forward. And that's whether they're in support institutionally or by private donors, frankly, those are gonna be challenged. But I think the key right now is again, to work with legal counsel, there are gonna be times and some work that will have to be done around conversations with donors around this, if there are legal challenges that eventually go through and that do apply and that do restrict this. But those are all things that we have to wait and see and watch as this all plays out. But certainly it's an area that we're watching a case. And as we said earlier, we hope to have a kind of follow on conversation around a real focus on this piece of work just to help provide you, our member institutions, some more guidance in this area. Right, right. If I can add one additional thing, there is an education coalition that did sue about the Dear Colleague letter. And so that has put a kind of a stay there. So there is some breathing room for people to consistently figure out what they're going to do. So that has come through. Well, that actually is a good segue to the resources here. Of course, the Case Advocacy Network, which Christy mentioned, which is our online community, we're posting weekly updates on that, trying to keep track of everything. So if you join that, you'll get weekly updates. For any of you who asked questions we did not get to on this call, we will post a response to those questions in the Case Advocacy Network very shortly. We also have a U.S. Federal Policy Tracker. So Jessica did a great job of walking through a bunch of executive orders, but actually you can just go to this page and there's even more direct detailed information and links on that. And we're going to be tracking executive orders, letters, the Dear Colleague letters, some legislative issues as well on this page. So please feel free to use that. For those of you who may have board meetings coming up or meeting with alumni boards, foundation boards, or others, and want to give them a snapshot of what's happening, we do offer case advocacy board talks. And these are things we do through our Case at Campus program, but please feel free to reach out. Be happy to join and give you, you know, join via Zoom or give you a quick update on what's happening on Capitol Hill and what it means for your, and answer questions from your board members or others. Finally, a couple of other quick points. Make sure you're working with your government relations staff at your school, college, university, build that relationship now, connect them to the Case Advocacy Network. We would love to have them be a part of that. And then of course, for those of you with alumni, we'll probably do a separate program on this later this year, but really, how can you think about your alumni as advocates in this time? You know, are there some key supporters who have good, strong relationships up on Capitol Hill who'd be willing to champion your institution? Are there some who are donors who give to endowment who might be willing to say, hey, why are you taxing my gift? All of those types of issues. So we'll be talking more about how you can leverage and think about your alumni as well. So hopefully, these resources will be helpful, but most importantly, please, please do stay informed and we at Case will be working to keep you informed. So thank you for joining us this afternoon. Is there anything, Christy, we need to add before we close out? Nope, I just wanna add, I did put all of these links that you're seeing on the slide in the chat. They are also linked on the event page and I will be sending out a follow-up email once we add the recording with the link and instructions for accessing all of that. So don't worry if you don't have them saved yet. Great, thank you all for joining us. Thank you, Grant. Thank you, Jessica. Thank you for all the great questions. We're here to help support you. So please do reach out and thank you for joining us today and have a good weekend. Thank you, everyone. Thank you.

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diversity equity inclusion

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budget implications

tax reforms

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