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Sequestration Still Looms Over the Grant World: Two Months and Counting

I wrote about the potential impacts of the then-looming fiscal cliff a few weeks ago. At the last minute—actually, about a day after the last minute—Congress and President Obama awoke from their torpor and passed legislation, which what’s left of our media immediately hailed as “preventing the nation from going off the fiscal cliff.”

Well, not quite.

Lost in the fiscal cliff hubbub was the fact the fiscal cliff was actually a two-step fall. The first step downward—massive tax increases on almost all Americans—was indeed averted. The second part of the Cliff, sequestration, however, wasn’t addressed.

Rather, it was kicked down the road by about two months. As I pointed out in my earlier post, sequestration will impact the wonderful world of grants much more than tax increases. The former means significant reductions in discretionary grant funding, while the latter means more “money for nothing and chicks for free.”

Over the next few weeks, the battle lines over sequestration will form as the new Fiscal Cliff takes shape. This, too this will be a two-step Fiscal Cliff. Step one is our old pal sequestration, while the second part will be raising the federal debt ceiling. While the two steps are not inherently intertwined, the timing virtually ensures that the debates over both will be.

If you’re with a nonprofit that’s drifted back into somnolence because the Fiscal Cliff has been averted, shake yourself awake because the roller coaster is about to start again. In many ways,* coming to agreement on the largely non-raising of taxes was fairly easy for Congress and President Obama to agree on, compared to the coming battles over sequestration and raising the debt limit.

While understanding the byzantine politics of these two issues is above my pay grade, the eventual outcomes will likely include either decreases in federal spending on discretionary grant programs or, at a minimum, a reduction in the rate of increase. Either course will have significant impacts for grant seekers.

* Free proposal lead-in phrase in here.

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Looking at the Stimulus Bill from a Grant Writer’s Perspective

Since last I wrote about the Stimulus Bill in Brush the Dirt Off Your Shoulders: What to Do While Waiting, the House has passed its version and the bill is staggering through the Senate. It’s amusing to watch various senators say, like Captain Renault in my favorite movie, Casablanca, that they are “shocked, shocked to find pork in the Stimulus Bill.” Just as there is likely to be gambling at Rick’s Café Américain, one is likely to find more than a few curious items in the largest spending bill ever considered by Congress. But, as a grant writer, what interests me is not what politicians and pundits say, since one person’s “stimulus” is another’s “pork,” but what grant programs will shower funds on those applicants nimble enough to gather up the “golden crumbs.”*

I found a pretty good synopsis (warning: .pdf file) of the House’s version of the Stimulus Bill at the website of the D.C. lobbying firm The Ferguson Group.** This handy analysis is organized by Federal agency and program, new or proposed. In looking at this analysis, I focused on the word “competitive,” because this means that eligible applicants will be able to apply directly to the relevant Federal agency, instead of going through some form of local or state RFP process as I described in Getting Your Piece of the Infrastructure Pie: A How-To Guide for the Perplexed. Here are examples of proposed competitive funding:

  • $300M in the Department of Commerce for “Construction of Research Facilities.” Sounds like a winner for colleges and universities!
  • $1B to resurrect the Department of Justice’s Community Oriented Policing Services program, which had been left for dead during the Bush years.*** We wrote many COPS grants during the Clinton years for law enforcement agencies, so this will be like greeting an old friend.
  • $50M in additional funding for another old friend, the Department of Labor’s YouthBuild program.
  • $750M in the Department of Labor for worker training for high growth and emerging industries, along with another $2B to be passed through to states for various training programs under the Workforce Investment Act (WIA) / Workforce Investment Board (WIB) systems.
  • $1B in HUD for capital projects conducted by Public Housing Authorities (PHAs).
  • $4.15B in HUD for two new Neighborhood Stabilization Program (NSP) initiatives. The difference between these two types of NSP grants isn’t clear, but both differ from the NSP program approved by Congress last fall, which is an entitlement program for CDBG-eligible jurisdictions. My guess is that this is an attempt to get “walking around money” to non-CDBG jurisdictions. I know this is confusing, but welcome the to world of grant programs and endless, sometimes overlapping acronyms.

I could go on, but you get the idea. Even better, though, is a requirement in the bill that “competitive grant funding shall be awarded within 90 days of enactment (if there was no funding in FY 2008, then funding shall be awarded within 120 days).” As soon as President Obama signs the bill, the RFPs will be landing like the meteorites in Starship Troopers.

Some of the nuggets in the House version will not survive Senate negotiations—but many will. For a good analysis of current state of the Senate version, see this article in the February 4, 2009 Washington Post, “Senate Lacks Votes to Pass Stimulus: Democrats Trying to Trim $900 Billion Plan to Gain GOP Support” by Shailagh Murray and Paul Kane. Don’t let your heart be too troubled by this piece, however, as our good senators will likely add one program for every one they remove. And any programs that get stripped out of the Stimulus Bill will no doubt re-emerge shortly in new appropriations bills after the dust settles and the press corps has moved on to the next crisis.

My advice is to get ready to rock ‘n roll with furious grant writing. At Seliger + Associates, our Macs are locked and loaded. Let the games begin!

* Tom Wolfe uses golden crumbs as a metaphor in his wonderful novel, Bonfire of the Vanities to describe bond traders, but it also applies nicely to grant applicants. As Sherman McCoy explains: “Just imagine that a bond is a slice of cake, and you didn’t bake the cake, but every time you hand somebody a slice of cake a tiny little bit comes off, like a little crumb, and you can keep that.” Replace “bond” with “federal program” and the same concept applies.

** It’s good to see that The Ferguson Group appears to be thriving in this time of much negative press about lobbyists. I worked closely with Bill Ferguson, the founder and owner, when I was the Development Director for the City of Inglewood in the 1980s. Bill was Inglewood’s lobbyist and I spent lots of time in D.C. with him as I tried to extract various goodies out of the Feds as he built his business.

*** Jake wrote about what he called Phoenix Programs, while I wrote about them in Zombie Funding – Six Tana Leaves for Life, Nine for Motion, so you know that it is not uncommon for the dead program to walk once more among us.