Capitol Hill Update and the “Devastating” Impact of Sequestration

June 22, 2012

by Paula Skedsvold

In what is typically a busy appropriations time of the year, add to it a great deal of discussion about the upcoming sequestration set to begin in January 2013. The sequestration was put into motion with the Budget Control Act (BCA), signed into law in 2011 following negotiations between Congress and the President over the debt ceiling and deficits.

Sequestration provides for automatic cuts of an estimated 8-10 percent to the domestic, discretionary part of the federal budget–meaning to agencies that fund much of the nation’s scientific research. The defense budget will take a hard hit as well, with estimates of a 10% cut, affecting war funding and research conducted under its umbrella.

This was the intended plan. Make the cuts so difficult and impact areas that all members of Congress care about so that there would be an incentive to get past politics and address the nation’s deficits for the long-term. No deal has been reached yet, and it is uncertain when one will surface.

What do cuts of this magnitude mean? At this time, it’s not clear. Lawmakers on both sides of the aisle are pushing the Administration to provide specifics, introducing targeted legislation and adding amendments to bills that are moving through the chambers.

Many observers suspect that the sequestration will not take effect, despite it being current law, but the path out is not clear. Prior to the BCA and sequestration, various plans (e.g., Simpson-Bowles, Rivlin-Domenici) were developed to address the deficit problem. Most plans recognized the need for a balanced approach that would include spending cuts (discretionary and entitlement programs) and revenue increases, but none received the support needed on Capitol Hill.

Now the BCA is being implemented. There are federal caps on spending for a decade and additional cuts due to sequestration are looming. Given the potential impact, the Simpson-Bowles plan is being dusted off and updated by Erskine Bowles and former New Hampshire Senator Judd Gregg. In the new plan, they will account for the BCA and other legislation which has changed the spending trajectories. Others such as the “Gang of Six” (then Eight, now Ten) Senators continue to discuss what plan would address the deficit and garner the needed votes.

Will the House, Senate, and President reach an agreement to avoid sequestration and address the deficit, and if so, when?  Diverse groups are urging action now.

The Pentagon has suggested that the sequester could make the U.S. more vulnerable to attack by presenting a “different deterrent calculus.” CEOs of major defense contractors are reminding Congress that they are required by law (under the Worker Adjustment and Retraining Notification Act of 1988) to provide a 60-day notice to employees in advance of covered plant closings and mass layoffs. They are estimating that hundreds of thousands of people could be laid off 4 days before the November elections. Other private, for- and non-profit employers are similarly affected.

In a letter to the Senate explaining the devastating impact of sequestration on the nation, the public health community asked the Senate “How many highly trained public health officials—the first responders in a biological attack, natural disaster, epidemic, and other public health crisis—will be laid off….? How many scientists will be pulled off research studies as a result of reduced grant funding….? How many primary care doctors, dentists, nurses, and physician assistants will lose training support?”

The U.S. Conference of Mayors recently passed a resolution calling on Congress to come to a “comprehensive, balanced deficit reduction agreement, in the spirit of the Simpson-Bowles Commission, that will foster long-term economic growth and prevent the implementation of a draconian budget sequestration that ignores the nation’s priorities.”

The Congressional Budget Office Director has stated that all this uncertainty is weighing on the economy.

As the House and Senate consider how they will address the deficit, a number of the FY 2013 appropriations bills are winding through the legislative process. The U.S. House passed a spending bill that included an increase in R&D funding of $221 million for the National Science Foundation, an increase of 3.9% over FY 2012 levels. In doing so, the House voted to eliminate all political science research funding through NSF.

The battle has now moved to the Senate.  While the Senate Appropriations Committee approved the CJS bill, providing an increase of $240 million in funding for NSF while attaching no riders to eliminate funding for particular areas of science, the full Senate has not voted on the bill and any amendments that could raise concern.  The Coalition for National Science Funding recently circulated a letter to Senate members in support of NSF-funded research, the merit review process, and a balanced portfolio that includes all disciplines needed to keep the country strong.

Meanwhile, the U.S. Senate Appropriations Committee has approved the spending bill setting funding for NIH at $30.723 billion, a $100 million increase over FY 2012. The same bill provides funding for the Department of Education at $68.5 billion, short of the President’s request of $69.8 billion.  The House has not taken up the Labor-Health and Human Services-Education appropriations bill that funds NIH.