Policy Update: March 26, 2013
CR and Sequestration
Following bipartisan action by the United States Senate last week, the House of Representatives on Thursday gave final approval to a Continuing Resolution (CR) for fiscal year 2013 to fund the federal government through September 30, 2013. President Obama is expected to sign the CR into law by Wednesday of this week (when the current CR runs out).
The final CR keeps sequestration in effect for the remainder of FY13 (through September 30th). Including the required across-the-board sequestration cuts, the CR provides $984 billion in discretionary funding, some $59 billion below FY12 (the remaining $26 billion in required cuts comes from reductions to off-budget "mandatory spending"). While the CR does not eliminate sequestration, it does provide some federal agencies with more flexibility as to how they implement their cuts, particularly the Departments of Defense, Homeland Security, Commerce, Justice, State, Veterans Affairs, and Agriculture. Unfortunately, such flexibility is not extended to the Departments of Health and Human Services, Education, or Energy, among others.
Fortunately, some of the agencies that Northeastern works with will receive extra funds that may reduce the immediate impacts of sequestration. The NIH will get an extra $71 million, only partly off setting the $1.5 billion cut that must happen in NIH’s estimated $31 billion budget due to sequestration. However, the NSF will see a $221 million increase to $7.2 billion, which appropriators expect will allow NSF to make 550 more awards than in FY12. Funding for the DHS Science and Technology Research, Development and Innovation Account is increased by $184 million, which brings it back to FY11 funding levels. Also, the DHS University Programs Account includes $40 million, $3.3 million more than FY12. NIST, NOAA, and NASA all see increases over FY12, including an additional $14 million for the Advanced Manufacturing Technology Consortia Program. Finally, the NASA Space Technology Program will get a $67 million increase. Unfortunately, the Senate version of the CR included a troubling amendnent.
We will watch closely for how the sequester will impact each of the funding agencies, including research awards and campus-based student financial aid programs.
With the FY13 process completed, after the holiday recess both branches will begin to turn their attention to fiscal year 2014 appropriations. Both the House and the Senate recently passed their respective versions of an FY14 budget. However, given the significant differences between the chambers' proposals, a budget resolution is unlikely to be adopted. As a result, some observers have suggested that the need for Congress to increase the statutory debt limit later this summer offers the best chance for reviving a deficit reduction agreement that would undo sequestration. Absent such a deal, sequestration will require an additional $109 billion in budget cuts for fiscal year 2014, which begins October 1, 2013.