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Obama Orders Sequestration

Late last night, President Obama issued the order mandating sequester cuts across the federal government. Here is the order and link to the Office of Management and Budget’s report to Congress:

SEQUESTRATION ORDER FOR FISCAL YEAR 2013 PURSUANT TO SECTION 251A OF THE BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT, AS AMENDED

By the authority vested in me as President by the laws of the United States of America, and in accordance with section 251A of the Balanced Budget and Emergency Deficit Control Act, as amended (the “Act”), 2 U.S.C. 901a, I hereby order that budgetary resources in each non-exempt budget account be reduced by the amount calculated by the Office of Management and Budget in its report to the Congress of March 1, 2013.

Pursuant to sections 250(c)(6), 251A, and 255(e) of the Act, budgetary resources subject to sequestration shall be new budget authority, unobligated balances of defense function accounts carried over from prior fiscal years, direct spending authority, and obligation limitations.

All sequestrations shall be made in strict accordance with the requirements of section 251A of the Act and the specifications of the Office of Management and Budget’s report of March 1, 2013, prepared pursuant to section 251A(11) of the Act.

BARACK OBAMA

THE WHITE HOUSE,

March 1, 2013

Sequestration Begins at Midnight Tonight

Sequestration officially starts today around midnight, though Obama could issue the order sooner that will direct federal agencies to make cuts of about 9 percent for most nondefense discretionary programs and 13 percent for defense programs. This represents $85 million is spending cuts over the remaining seven months of FY 2013. If kept in full, sequestration would total $1.2 trillion in spending cuts and savings over the next decade.

It should be noted that today’s sequestration deadline is just the first of two budgetary deadlines in March. The second is on March 27th when the continuing resolution is set to expire, meaning Congress must approve a budget for the remaining seven months of FY 2013 or face a government shutdown. We believe this is a much more significant date than today’s sequestration deadline because it is the next best (and last) opportunity for Congress to soften the blow of sequestration for FY 2013.

No one really knows for certain how sequestration will impact individual federal programs, but we are starting to learn about how the cuts will start to impact the federal government. There is a lot of speculation out there, but here’s what to expect according to one article in Politico.com this morning:

Today: Sequestration goes into effect around midnight when the Office of Management and Budget (OMB) issues a notice ordering agencies to make cuts. The first issue federal agencies will deal with are possible furloughs since they need to give 30 days notice to employees. Talks center on how the furloughs will be implemented, who’s covered, mandatory days off around holidays and whether to go in phases over the next seven months so budget officials can re-evaluate whether more or less time off is needed. Hiring freezes — used by some agencies to avert furloughs — will also go into effect

Next Week: The bulk of the furlough notices will start going out. Each agency and/or department will determine the number of days, but preliminary estimates include 13 days at the EPA and 15 days at USDA. Forced days off will mean cuts in annual pay of about 10 percent. Uniformed military personnel as well as employees at the Department of Veterans Affairs and the US Postal Service are exempt from the furloughs. States dependent on federal grants will most likely get word by next week about what’s happening to their money for the rest of the fiscal year. We should learn more information about Education Title I grants, HUD’s Community Development Block Grants, EPA Clean Water grants, and even some information on NIH grants.

March: Sequestration will begin to impact federally funding operations and services. For example, it will likely impact the opening of the commercial fishing season as NOAA will not have enough personnel to provide at-sea observers or resources to complete fisheries assessments. The Department of Education will immediately cut funds to states to help districts without large property tax bases, including students who live on military bases and Indian lands. And the US Forest Service will see immediate reductions just as they are gearing up for fire season.

April: This is the month that reality will set in. We won’t see closures or work stoppages, but rather a general slow down in federal government services. For example, furloughs will begin and are expected to impact everything from air traffic controllers, USDA inspections, and even the IRS just as tax season reaches its peak. And services like snow removal at Yellowstone National Park may delay the traditional opening of the tourist season there.

May and beyond: The cuts will continue to trickle down to states, municipalities, and other entities that rely on federal funds, like the University of Washington. This is likely when we will start to have a better sense of the direct impacts of sequestration.

The Office of Federal Relations continues to urge our Congressional delegation to do all they can to protect investments in research funding and preserve access to post-secondary education by protecting federal student aid programs.

Impact of Sequestration on NSF

The National Science Foundation has issued an Important Notice concerning the impact of sequestration on the NSF programs. In that notice, NSF indicates that they intend to make the necessary FY 2013 reductions with “as little disruption as possible to established commitments” and will use the following set of core principles to guide sequestration planning activities:

  • Protect commitments to NSF’s core mission and maintain existing awards;
  • Protect the NSF workforce; and
  • Protect STEM human capital development programs.

The notice goes on to detail what they foresee as the major impact of sequestration, which will be noticed through reductions to the number of new research grants and cooperative agreements awarded in FY 2013. They anticipate that the total number of new research grants will be reduced by approximately 1,000 for the remainder of this fiscal year.

But the good news for existing grants is that all continuing grant increments in FY 2013 will be awarded, as scheduled, and there will be no impact on existing NSF standard grants. The same intent applies to annual increments for cooperative agreements, though overall funding constraints may require reductions to certain major investments. These will be handled on a case-by-case basis.

NIH Prepares for Sequestration Implementation

As mentioned in our blog post yesterday, NIH Director Francis Collins announced that NIH IC directors will develop their own plans for how to apply sequestration cuts to their institutes and centers. This was followed by NIH’s official notice posted yesterday that due to sequestration,  NIH likely will reduce funding levels of non-competing continuation grants, make fewer competing awards, and for continuation awards that have already been made, may not be able to reach the full FY 2013 commitment level described in Notice of Award.  Confirming Collins’ announcement, it also states that if sequestration occurs, NIH ICs will announce their individual plans to meet new budget levels. Read the full NIH notice here.

The anticipated cuts are already being seen: PIs are receiving awards sharply reduced from committed levels, forcing universities to make up the difference or find cuts, including letting go lab staff.  The sequester is scheduled to take effect just a week from today.

UW Rates Exceptionally Well on Obama’s College Scorecard

During his State of the Union address last night, President Obama announced a new College Scorecard that would help students and parents make better decisions about which college to attend. The College Scorecard allows you to enter the name of a college of interest or select factors that are important in any college search. You can find scorecards for colleges based on factors such as programs or majors offered, location, and enrollment size.

According to the administration’s College Scorecard, the University of Washington, including UW-Tacoma and UW-Bothell, all “score” exceptionally well compared to other post-secondary institutions in Washington state. This validates what we have been saying for a long time: the UW offers great value and a great education for Washington state residents!