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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.

Senate Sequester Delay Measures Fail

As predicted, the Senate rejected a Republican bill giving President Obama broad discretion to implement $85.3 billion in spending cuts — or sequester — over the remainder of FY 2013. The proposal failed 38 to 62. Senate Democrats also fell short of the 60 votes needed to move ahead with their own plan to forestall automatic across-the-board spending cuts. The 51-49 roll call failed to attract Republican support because of differences over taxes. The defeat of these two measures makes it almost certain the sequester cuts will go into effect by midnight Friday, March 1st.

Sequestration Tomorrow

The Sequester is scheduled to take effect tomorrow, March 1st. There are some efforts to delay, modify, or turn off the sequester but none of those proposals have sufficient support to move through the legislative process at this point. A policy brief on this topic will be sent to the UW community today.

That said, there is still some activity related to the sequester. The Senate will vote today on Democratic and Republican alternatives to the sequester, but both versions are expected to fall short of the 60 votes needed. The GOP plan would let President Obama come up with alternative cuts by March 15th. Democrats will advance a plan that includes a mix of taxes and other spending cuts in their version.

Why is the sequester taking effect now with so little debate by Congress? Mostly because no one is getting what they want, but they are all getting something out of the deal that they all call a bad way to run government. Some of the most liberal members of Congress see the cuts as a rare opportunity to cut defense spending. And the poor are protected from the worst of the cuts, and so the process could take some pressure off the Democratics to make changes to Social Security and Medicare. At the same time, the President gets some relief from fiscal issues to focus on his top policy priorities: immigration and gun control. And Republicans, while certainly concerned about the level of military cuts, finally see the federal government shrinking in real dollars.

So tomorrow we will see March 1st and the beginning of sequestration, but this is not the end of the debate. The next few weeks will determine how the sequester is actually implemented as Congress decides how to fund the remainder of FY 2013 when the current CR expires at the end of March. So there may be some “modifications” to sequestration during March. And Congress may actively try to modify other effects of the sequester through the FY 2014 appropriations process. Essentially, this process of reducing federal spending will continue on even without the threat of sequester.

Newly Introduced Legislation

A roundup of bills introduced in the last week that may be of interest to the higher education community:

H.R. 700: A bill to direct the Secretary of Education to carry out the Advanced Research Projects Agency-Education (ARPA-ED) to fund directed development projects to supported targeted breakthroughs in teaching and learning.
Sponsor: George Miller (D-CA)  Introduced: 2/14/2013  Last Major Action: Referred to House Committee on Education and the Workforce  Cosponsors: None

H.R. 812: Amend the Higher Education Act of 1965 to improve education and prevention related to campus sexual violence, domestic violence, dating violence, and stalking.
Sponsor: Carolyn Maloney (D-NY)  Introduced: 2/25/2013  Last Major Action: Referred to House Committee on Education and the Workforce   Cosponsors: 28 (Including Rep. Larsen)
Maloney Press Release

H.R. 822: A bill to improve and expand geographic literacy among kindergarten through grade 12 students in the United States by improving professional development programs for kindergarten through grade 12 teachers offered through institutions of higher education.
Sponsor: Chris Van Hollen (D-MD)  Introduced: 2/26/2013  Last Major Action: Referred to House Committee on Education and the Workforce   Cosponsors: 2

The full text of these bills can be found by searching for their respective bill number at thomas.loc.gov

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.