Information on sequestration impacts to research
Federal Budget Sequestration (Background/General)
Federal Budget Sequestration (At OSU)
Federal Budget Sequestration (Guidance)
Sequestration and Veterans’ Tuition Assistance (PDF)
an interview with OPB that you can listen to here: http://www.opb.org/thinkoutloud/shows/osu-deals-effects-sequestration/.
Federal Budget Sequestration (Background/General)
- Federal budget sequestration was triggered on March 1, 2013.
- The sequester reduces federal spending by $85 billion in FY 2013.
- The budget sequester is part of the August 2011 Budget Control Act (PL 112-25) – which was passed with the intent to rein in federal spending in exchange for an increase to the federal debt ceiling. Budget sequestration calls for $1.2 trillion in deficit reduction over the next nine years by instituting equal, across-the-board spending cuts to defense and non-defense discretionary spending.
- Cuts in FY 2014 and beyond total $109 billion annually.
- Under the BCA spending caps, non-defense discretionary spending will be at its lowest level relative to GDP since 1962.
Federal Budget Sequestration (At OSU)
- The estimated financial impact to Oregon State University in 2013 is $10,098,211 from three key areas: federal research ($9.529 million), federal student aid ($100,011), and land-grant capacity funds ($469,200).
- Financial Aid: The effect of sequestration on OSU student’s financial aid in FY 2013 would be to reduce Supplemental Educational Opportunity Grant (SEOG) and Federal Work-Study (FWS) funding by 5.1%. This reduction would reduce SEOG by $46,614 and FWS by $53,397. These amounts represent 89 SEOG and 32 FWS students losing academic year awards.
- Capacity Funds: Land-grant capacity funds directly support both programs and staff, including tenured positions. Loss of funds for such purposes will likely be dealt with in FY 2013 year through limited carry-over funds (or college fund balances), reduction of service, supplies, and equipment expenses and shifting of costs to other funds as appropriate. In the longer term, continued reductions will require reducing the scope of, or eliminating, selected programs and reducing employee numbers through attrition. In that case, 7-11 positions would be lost to make up the $469,200, largely Faculty Research Assistants and graduate research assistants.
- Federal Research: Sequestration, as it looks today, would result in a $9.529 million loss to OSU's federal research portfolio. If 25% of that $9.529 million is for services, supplies and capital expenses, we estimate a loss of $7.147M in salaries and benefits to research professors, faculty research assistants, and graduate research assistants. At average salaries and current benefits, these reductions would eventually result in the loss of approximately 105 research-related jobs, with about half of those losses to fulltime faculty research assistants and most of the rest to graduate research assistants.
Federal Budget Sequestration (Guidance)
- The Office of Management and Budget (OMB) as advised federal agencies to institute a cut of 7.8 percent for discretionary defense spending and 5 percent for discretionary non-defense spending for FY 2013.
- OMB advises, “Because these cuts must be achieved over only seven months instead of 12, the effective percentage reductions will be approximately 13 percent for non-exempt defense programs and 9 percent for non-exempt nondefense programs.
- The OMB has directed that the cuts be applied equally at the smaller program, project and activity levels in each budget account.
- Specific information regarding how each agency will actually implement cuts is still somewhat unclear. However, the following scientific research funders have released the below information:
- NSF: In a memo from NSF Director Subra Suresh, the director indicates that NSF will protect commitments to their core mission and maintain existing awards, NSF workforce and STEM human capital development programs.
- NIH: NIH Director Francis Collins has advised stakeholders that the NIH will likely reduce the final FY 2013 funding levels of non-competing continuation grants and will make fewer competing awards.
- USDA: USDA Secretary Thomas Vilsack advised that the USDA would experience a loss of over $60 million resulting in more than 100 fewer grants awarded for agricultural research conducted by both university scientists and private partners, disrupting critical progress being made in many topical areas such as water, nutrient management, bioenergy production, animal plant and disease, and childhood obesity.
- USDA NIFA Offer Guidance on Sequestration
- Below are highlights of a recent National Institute of Food and Agriculture (NIFA) and the Department of Agriculture (USDA) letter to partners on implementation of sequestration:
- “At this time, USDA is taking every step to mitigate the effects of these cuts, but based on our initial analysis, it is possible that your organization’s workforce, revenue, and planning processes may be affected. Based on the 5 percent sequestration reductions that apply to the FY 2013 funding amounts, NIFA anticipates the following funding impacts:
•A reduction of $13 million for the Agriculture and Food Research Initiative (AFRI), competitive grants program, potentially resulting in fewer new proposals that may be funded during FY 2013;
•AFRI Continuation awards from previous Fiscal Yearswill not be impacted by the sequestration, and, continued funding will be based on evaluations of performance and meeting stated goals;
•Reductions totaling almost $37 million for capacity/formula funding; and,
•Reductions for other research, education and extension programs totaling over $10 million.
While we are currently operating under the FY 2013 Continuing Resolution, which provides temporary funding through March 27, 2013, NIFA is proceeding with announcements for Requests for Applications for most competitive grants programs and will hold competitive peer review panels. However, grant awards will be contingent upon receipt of final FY 2013 appropriations.
NIFA plans to release some Formula Grant Opportunities announcements soon. Consistent with the FY 2013 Continuing Resolution, only up to 40 percent of the FY 2012 funding level will be released for the first two quarters.”
- NOAA: Department of Commerce Acting Secretary Rebecca Blank advised “… up to 2,600 NOAA employees would have to be furloughed, approximately 2,700 positions would not be filled, and the number of contractors would have to be reduced by about 1,400. If sequestration is enacted, NOAA will face the loss of highly trained technical staff and partners. As a result, the government runs the risk of significantly increasing forecast error and, the government's ability to warn Americans across the country about high impact weather events, such as hurricanes and tornadoes, will be compromised.”
- NOAA: Sequestration will result in a 2-3 year launch delay for the first two next-generation geostationary weather satellites (currently planned to launch in 2015 and 2017), which track severe weather events such as hurricanes and tornadoes. This delay would increase the risk of a gap in satellite coverage and diminish the quality of weather forecasts and warnings.
- NIST: The cuts at the Department's National Institute of Standards and Technology (NIST) would largely fall on grants, contracts, equipment procurements, deferment of open positions, and cuts in the repair and maintenance of NIST facilities that will negatively impact NIST's ability to keep them in acceptable working condition. In addition, if the sequestration moves forward, NIST will be forced to end work it is currently doing through the Manufacturing Extension Partnership (MEP).
- Department of Energy: Energy Secretary Steven Chu advises that the Office of Science would reduce research grants both in number and size affecting researchers at national labs and universities.
- NASA: NASA Administrator Charles Bolden advises that NASA will necessitate a reduction in funding for competed research (e.g., “research and analysis”) projects by about 2 percent, resulting in about a 5 percent reduction in new awards to support labor/jobs at universities, businesses, and other research entities distributed around the nation this year. Ongoing projects started with awards made prior to this fiscal year would not be affected.
- Department of Education: Education Secretary Duncan advises that the Pell Grant program is exempted from sequestration.
- The federal government has been running on a continuing resolution for 5 months. The current CR is set to expire March 27.
- Congress is working to approve an extension through the end of FY 2013. If a resolution is not reached before the March 27 deadline, federal government operations would shut down.
- On March 6, the House passed a CR that meets the BCA-established spending cap of $984 billion for discretionary programs. Note: this cap includes sequestration reductions. The bill gives flexibility to programs funded within the Defense and Military Construction-Veterans Affairs appropriations bills.
- This week the Senate is considering a measure that uses the same discretionary caps AND provides flexibility for some domestic programs – programs within the Agriculture, CJS, Homeland Security, Defense and Military Construction-Veterans Affairs appropriations bills.
- It should be noted that the Senate bill allows for slight increases in some scientific research accounts including:
- NSF: Under the Senate proposal, the NSF is funded at $7.25 billion; an increase of $221 million above the FY 2012 enacted level. This level will allow NSF to make about 550 more grants supporting 7,000 scientists, teachers, students and technicians.
- NIH: The Senate proposal includes an increase of $71 million for NIH.
- USDA: The Senate proposal includes an increase of $15 million for NIFA’s Agricultural and Food Research Initiative (AFRI).
- It has been reported that the President’s FY 2014 budget proposal will be released on April 8.
- This week the House and Senate will release their FY 2014 budget resolutions.
