American Society of Hematology

Sequestration Delay May Mean Higher Cuts for NIH in FY 2013; Obama Urges a Short-term Fix to Prevent Spending Cuts

Published on: February 06, 2013

According to a memo released by newly appointed Senate Budget Committee Chair Patty Murray (D-WA), the two-month delay in automatic across-the-board spending cuts ("sequestration") may not ease the hit on the National Institutes of Health (NIH) and other federal agencies even though it shrinks the percentage by which their budgets would be reduced. In fact, if sequestration is allowed to take effect, the cuts to NIH may be more devastating than originally expected because of the shorter time remaining in fiscal year (FY) 2013.

The Budget Control Act of 2011 (PL 112-25) contained sequester provisions that were set to take effect at the start of 2013 absent an alternative plan to cut deficit spending. Although Congress passed, and President Obama signed into law, a measure at the start of 2013 delaying implementation of any automatic cuts until March 1, some observers see a growing likelihood that the sequester provisions will, in fact, take effect in March. Representative Paul Ryan (R-WI), the Chair of the House Budget Committee, has publicly stated that he believes "the sequester is going to happen" because "Democrats have rejected our efforts to replace those cuts with others and have offered no alternatives."

On February 5, President Obama held a press conference in which he pressured Congress to agree to a short-term solution to further delay the sequester in order to allow more time negotiate a permanent solution. This is a change from the President’s previous position wherein he stood against employing another short-term fix to the sequester and insisted the March 1 deadline should remain firm.  The President hopes to get some short-term agreement to prevent the devastating sequestration cuts now scheduled to begin March 1.

According to Senator Murray's memo, the measure passed by Congress at the beginning of January reduced from $109 billion to $85 billion the amount of the sequester in FY 2013. Cuts to NIH, the Centers for Disease Control and Prevention (CDC), and other federal health agencies had originally been estimated to total 8.2 percent of those agencies' budgets. But Senator Murray's memo estimates the agencies' reduction would be 5.1 percent unless Congress acts to delay or reduce the cuts now scheduled to take effect March 1.

However, even though the percentage figure is less, a smaller portion of the FY 2013 budget year remains from which to take the cuts because of the two-month delay. "Consequently, the impact of the cuts will generally not be less dramatic despite the fact that each account will be reduced by a lesser amount," Senator Murray's memo said. In fact, some observers have noted that in order to get annualized cuts totaling 5.1 percent, reductions in the NIH budget may need to be closer to 10 percent in FY 2013 if sequestration takes effect.

Additionally, if sequestration takes effect, it is uncertain how NIH would apply the cuts. The NIH spends money on an intramural basis for agency personnel and programs and on an extramural basis for research grants and contracts. In order to prevent furloughs and layoffs and to avoid closing intramural research labs, one observer notes that we "might expect . . . that the cuts to extramural grants and contracts might be even higher than the average."

Congress still has until March 1 to reach a deal to avert these catastrophic across-the-board cuts. Senators and Representatives need to hear from members of the research community about the devastating impact potential funding cuts will have on biomedical research and the need for them to take a balanced approach to reducing the deficit that doesn't further cut NIH and other core federal programs. ASH members are strongly encouraged to contact Congress today. You can visit the on-line ASH Advocacy Center to find a sample letter supporting funding for NIH, enter your contact information, and click "Send Message." After you submit your message, use the "Tell a Friend" feature to forward the link to your colleagues and urge them to take action. Your efforts are crucial to safeguarding biomedical research funding.

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