Dear Members of the University Community:
Today, the long-expected and much talked-about automatic federal budget reductions—otherwise known as “sequestration”—take effect. While many areas of federal spending in our state will be affected, resulting in reductions in services and jobs, the major impact to the University will be in our research program, with a smaller impact on student financial aid. The overall cut in the federal budget for 2013 is estimated to be around 5.1 percent for “nonmilitary discretionary” spending, the category much of our research funding falls into. But because the cuts are starting now, at the midway point of the federal fiscal year, and must be taken in the remainder of 2013, the actual amount of the cut is estimated to be much higher, more in the 9 percent range. Unless Congress does something to alter what it has set in motion today, we estimate that our research program will lose somewhere between $75 million and $100 million of the $1.05 billion we receive in federally funded research.
On the student aid side, we estimate that next year we will lose about $33,000 in federal work-study funds, but we intend to patch this with other money. In this first year of sequestration, the need-based Pell Grants are protected from cuts, but we do not know what future years will bring. Because this relates so closely to our commitment to keep UW education affordable for low-income families, we will be watching this area very closely.
There is a great deal that is not known about how federal agencies intend to implement their cuts. We may see, for instance, revisions to existing research grants, fewer new grants being awarded, delays in funding and receipt of award notices and contracts, less frequent requests for funding applications and proposals, and possible reductions in approvals of carry-forward requests. As a result, for the immediate future, principal investigators are advised to be cautious and conservative in spending federal awards and in planning for future federal funding. While most of our attention is currently focused on 2013, it is important to note that sequestration is mandated through 2021. So, even if Congress protects some programs from drastic cuts, an overall reduction in federal spending will surely occur over the next decade. Planning ahead will be crucial to our success.
Our Office of Research under Vice Provost Mary Lidstrom and the deans of our schools and colleges have been preparing for this eventuality for quite some time to minimize any immediate disruptions to our programs. But there will no doubt be impacts, and some labs will not be able to fill positions or may have to reduce employment. While we must prepare to deal with these impacts, I want you to know that we remain firmly opposed to these reductions and, working with our fellow institutions in the Association of American Universities, will continue our advocacy efforts in the nation’s capital to implore the President and Congress to reach agreement on a long-term budget deal that will protect the country’s investments in research and innovation.
Whatever Congress may do this month to adjust the cuts or to adopt a budget for the remainder of the fiscal year, it is clear we have entered a new era for which we need to plan and be nimble and creative. As a university, we are in a strong position to respond and adjust because of the people we have here and the entrepreneurial spirit that infuses what you do.
Michael K. Young