What the federal sequester means to Case Western Reserve

Capitol Building Washington, D.C.Today marks the start of the sequester, the imposition of $85 billion in across-the-board cuts in federal spending for this fiscal year. Like many leading national universities, Case Western Reserve relies heavily on federal funds for research and also receives significant government assistance for student financial aid. President Barbara R. Snyder and other higher education leaders have spoken against the mandated reductions, and will continue to apprise elected officials regarding how the cuts touch our campus and, in turn, the broader community.

For now, however, we want to provide faculty, staff and students as much information as possible about sequestration. At this point, federal agencies themselves still have not determined precisely how they will proceed. In addition, individual units within those agencies may manage the constraints in different ways. One point that appears certain is that federal aid for undergraduates will not be affected this semester. As for future academic terms, clarity will take time to emerge.

The university will offer updates as developments warrant; below is an overview of current circumstances.

1.     What is the sequester?
In August 2011, Congress approved the Budget Control Act, which included a $1.2 trillion package of automatic spending cuts that would take place between 2013 and 2021. At the time, the nation was approaching its debt limit and faced default unless Congress raised that ceiling. The deal struck then included creation of a “supercommittee” charged to create a full deficit reduction plan. If that bipartisan group failed to develop a workable model, sequestration would follow. Now, after one Congressional deadline extension, it has.

2.     What happens now?
Federal agencies must cut $85 billion in spending by Sept. 30, 2013. The Office of Management and Budget estimates this total breaks down as a 9 percent reduction for nondefense programs and 13 percent for defense programs. Agency details are listed below, but in general sequestration is expected to translate to fewer research grant awards in this fiscal year. The White House predicts that 12,000 scientists nationwide will be affected this year.

As for student aid, GI Bill benefits are exempt from the sequester’s provisions, and Pell Grants will not be affected during its first year. Other aid programs may see cuts in the fall, and some student loan fees also may climb.

3.     Couldn’t the cuts become moot today after the president meets with leaders of Congress?Theoretically, yes. But yesterday the U.S. Senate failed to approve either of two competing bills to avoid the sequester’s start, and expectations for today’s meeting are low. Observers expect negotiators’ focus will turn to March 27, the date that the government’s current spending resolution expires. Meanwhile, the White House is expected to release its budget for 2014 sometime in the middle of this month.

4.     Whom do I contact if I have a question specific to my individual circumstances?

  • For researchers with grants at federal agencies:  If you have received an award, contact the federal agency grants administrator whose name is on the “Notice of Award.”
  • For researchers with questions about awards or proposals: Contact the program officer for that area.
  • For students or families with questions about federal financial aid:  Please contact the university’s Office of Financial Aid at 216.368.4530 or financialaid@case.edu.

5.     What are some of the specific impacts on agencies and departments that provide funding to members of the university community?

  • National Institutes of Health (NIH): Late last year the NIH cut 10 percent of existing grant amounts. Last week the agency announced it would reduce the funding levels of “non-competing continuation grants” and also the number of awards for competing proposals. Specific institutes and centers will determine the precise figures for their areas; researchers with questions about their own funding should contact the grants management specialist cited on their Notices of Award.
  • National Science Foundation: This week NSF Director Subra Suresh wrote that sequestration would lead to fewer grant awards and cooperative agreements from his agency. Specifically, he predicted approximately 1,000 fewer new grants. That said, he emphasized that 2013 continuing grant increments will be awarded as scheduled and existing standard grants would not be affected.
  • Department of Energy:  In a letter last month to Senate Appropriations Committee Chair Barbara Mikulski (D-Maryland), Energy Secretary Steven Chu estimated the sequester would require operations to be curtailed at its national laboratories and facilities, “potentially impacting more than 25,000 researchers and operations personnel…” He added that the number and amount of grants also would be reduced.
  • NASA: Administrator Charles F. Bolden wrote to Sen. Mikulski that the sequester would translate to “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.” He added that grants already awarded would not be cut.
  • Education: Secretary Arne Duncan wrote to Mikulski that sequestration would not affect Pell Grants but would contribute to small increases in loan origination fees. In addition, he cited concern about the cuts’ impact on the department’s ability to provide “grant, work-study and loan assistance” to students and the higher education institutions they attend.
  • Defense:  Deputy Secretary Ashton B. Carter testified before the Senate Appropriations Committee that sequestration would require that department to cut “roughly nine percent in each of more than 2,500 investment line items.”

For full transcripts of the letters and testimony and a webcast of the committee’s hearing on sequestration, click here.

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