Tax Reform: Graduate Student Tuition And ANWR Drilling

2017-11-30T15:25:28+00:00 November 20, 2017|
Map of Arctic National Wildlife Refuge (ANWR). (Credit: USGS)

(Click to enlarge) Map of Arctic National Wildlife Refuge (ANWR). (Credit: USGS)

What It Was

Both chambers worked on tax reform bills, which are advancing through the budget reconciliation process. The House’s bill, Tax Cuts and Jobs Act (H.R. 1), passed the chamber along a largely party-line vote (227-205) and includes a provision to tax graduate tuition waivers as income.

The Senate Energy and Natural Resources Committee held a markup to consider reconciliation legislation to authorize the secretary of the interior to establish and administer a competitive oil and gas program in the 1002 area of the Arctic National Wildlife Refuge. The legislation, termed the chairman’s mark, passed the committee on a near party line vote (13-10).

Why It Matters

Higher education has played a key role in fostering innovation and in providing economic and national security. Making graduate studies less affordable will put a chokehold on the innovation pipeline; since 60 percent of students receiving tuition waivers are working in science, engineering, technology, and mathematics (STEM), there will be a drastic impact on the STEM workforce.

Oil and gas can come from the U.S. or overseas, and many see the value in expanding exploration and extraction at home. Alaska’s geologic structure suggests it could house oil and gas reserves, but some of the region protected within the Arctic National Wildlife Refuge (ANWR) is off limits to these activities. Opening this area to exploration and development could offer new resources to the U.S but not without some risk to native people and wildlife.

Key Points

Graduate student tuition: A provision in H.R. 1 would require graduate students to report tuition waivers as taxable income, potentially moving them into a higher tax bracket and making graduate education unaffordable. The bill would also end a tax deduction for interest paid on student loans.

During the committee markup, Representative Lloyd Doggett (TX-35) offered an amendment that would strike this section, which failed along a party lines (16-24). COL and other organizations sent a letter to House leadership opposing this, but the language remains in the bill that passed the House.

ANWR drilling: Through a process known as reconciliation, the 2018 budget resolution directs the Senate Energy and Natural Resources committee to offset proposed tax cuts by $1 billion over the next 10 years. The chairman’s mark, introduced by Chairwoman Lisa Murkowski (AK), would require two lease sales of a minimum of 400,000 acres each and would allow surface development of 2,000 non-contiguous acres of the 1.5 million-acre 1002 area (the coastal plain) of ANWR. It could generate an estimated $2.2 billion in the next decade.

The legislation would amend the Alaska National Interest Lands Conservation Act (PL 96-487) by adding “to provide for an oil and gas program on the coastal plain” as a purpose of the ANWR. Ranking Member Maria Cantwell (WA) lambasted this insertion, saying, “no other national wildlife refuge lists oil and gas development as a purpose.”

Democrats expressed concern for the impact of development and frustration with this issue being inserted into the budget reconciliation process, notably because fewer (51 opposed to the typical 60) votes will be needed, meaning the bill can pass on a party-line vote. 

Quotable

Graduate student tuition: “The legislation that we are marking up today lets the American people down at every step of their life – from birth through retirement.  It fails to provide the needed improvements to the tax code that could assist the hopeful young family trying to keep their head above water; the student trying to do the right thing by getting an education; and the factory worker at the end of a long career just hoping to have enough left over to retire with dignity.” – Ways and Means Ranking Member Richard Neal (MA-1)

ANWR drilling: “We have not pre-empted the environmental review, nor have we limited the consultation process with Alaska Natives in any way. All relevant laws, all regulations and executive orders will apply under this language.” – Chairman Lisa Murkowski (AK)

“We think that [1002 area] is a critical habitat that should be protected and that it is not consistent with oil and gas development. Adding oil and gas development as a purpose of the Arctic National Wildlife Refuge doesn’t make any sense for a wildlife refuge – it certainly does if you want to drill, but no other national wildlife refuge lists oil and gas development as a purpose of a wildlife refuge.”–  Ranking Member Maria Cantwell (WA)

Next Steps

The ANWR legislation, alongside another budget offset from the Senate Finance Committee, will now go to the Senate Budget Committee, where they will be combined into one bill. Senate tax reform legislation does not include the graduate tuition waivers language; the two chambers must ultimately come to agreement on one version of the bill.

Find Out More

Watch the full hearing

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