With the clock ticking, President Obama met with Congressional leaders today in a short and unsuccessful hour long meeting to see if they could reach some kind agreement to mitigate the midnight deadline for the sequester. Members walked out in the same position they walked into the White House with – no agreement.
The White House Office of Management and Budget (OMB) will release a report pulled from the agencies on how they will implement the sequester – from program, project to activity. We anticipate that will be released either tonight or over the weekend and will keep an eye out for it to post a link on the blog.
President Elson S. Floyd released a Perspectives column regarding the information we have now and what sequestration will mean for Washington State University.
SEQUESTRATION WILL HAVE DIRECT IMPACT, OPPORTUNITY COSTS
It is now very clear that the sequestration of federal funds so long and intensely discussed these past few weeks actually will happen effective March 1. We will start seeing the effects after the current temporary budget for the Federal Government expires on March 27. Until then, the question is how long it will last. Washington State University will be impacted in two primary areas – funding for research grants and for programs traditionally supported by federal funds such as WSU Extension, and student financial aid.
As with every research university in the country, federal agencies, such as the National Science Foundation and the National Institutes of Health, will be affected as a result of the across-the-board reductions. In addition, we believe the sequester will be approximately 5.1 percent for all non-Department of Defense discretionary federal funding, such as that allocated to agriculture, extension, and veterinary medicine. This includes fund sources such as Hatch, McIntire/Stennis, Smith-Lever, Animal Health and Disease Research. If the 5.1 percent cut is calculated against the current year allocation in these areas, the impact could reach $12.4 million for us. If the calculation is applied against unspent balances in these areas, the impact could be $8.3 million. In either case, these reductions will dramatically affect people and projects. The variance is predicated on how these agencies decide to administer their reductions and how the reduction amounts are calculated.
Federal student aid programs such as Federal Work Study, the Supplemental Educational Opportunity Grant, and college access programs such as TRIO and GEAR UP, also will see cuts. We believe the Pell Grant will not be subject to any across-the-board cuts for 2013. However, sequestration is a multi-year process and does not protect Pell beyond the first year. We are estimating reductions of approximately $7.7 million at WSU – primarily in the area of student loans. The federal loan origination fee also will increase.
In addition, the sequester calls for a 7.7 percent reduction in funding for all Department of Defense discretionary programs and 5.2 percent from the non-Department of Defense mandatory spending, with the exceptions of Social Security and Medicaid and, for the first year, Pell grants.
There are additional repercussions beyond direct cuts. For research universities such as WSU, new discoveries, breakthroughs, and continuing research exploration are at risk. For all universities, federal student financial aid programs that promote opportunity and seek to level the access playing field will be adversely affected.
The state of funding for federal research has never been more fluid as it is now as Congress debates how to address the budget caps limiting spending in the federal budget. I recognize we are in challenging times, and I anticipate that there will be even more challenges ahead. I will continue to monitor this very closely along with our federal team who is on the ground in Washington, D.C.