Sequestration Information

March 1, 2013

Dear colleagues,

We’ve received several questions regarding sequestration and want to take this opportunity to share some information about how it may affect University of Nebraska-Lincoln research programs.

At this point, it appears highly unlikely a budget deal will be struck by midnight tonight (March 1), and across-the-board budget cuts (“sequestration”) will likely take effect. The across-the-board feature of sequestration limits agency discretion and means all agency programs will be affected. Defense discretionary spending, including defense R&D, will be cut 7.3 percent; domestic discretionary spending, including non-defense R&D, will be cut 5.1 percent for fiscal year 2013.

Sequestration will continue for a decade. The federal government currently is operating on a six-month continuing resolution, which funds the government through March 27. A budget must be passed by then to avert a complete government shut down.

How this will affect research universities depends largely on how the federal agencies implement cuts to their budgets. Not all federal agencies have communicated yet how they plan to implement sequestration. Some preliminary information follows below:

  • NIH expects to fund non-competing awards at lower levels (e.g., 90 percent) and make fewer competing awards to meet the budget cuts. Each NIH Institute and Center may choose different strategies for applying the cuts. NIH’s statement on sequestration is available at http://grants.nih.gov/grants/guide/notice-files/NOT-OD-13-043.html.
  • NSF expects to make nearly 1,000 fewer awards if the sequester take effect. NSF further states that it expects to continue current awards at current levels, with no impact to existing standard grants, at least for fiscal year 2013. NSF’s statement on sequestration is available at http://www.nsf.gov/pubs/2013/in133/in133.pdf.
  • DOD senior research officials have estimated that DOD university research for fiscal year 2013 will be cut by approximately $300 million.
  • DOE’s chief financial officer has ordered each DOE Office of Science program to base its spending under the current half-year continuing resolution at 50 percent of the minimum of four figures:
    • the final 2012 appropriation,
    • the President’s request for 2013,
    • the House of Representative’s committee recommendation for 2013, or
    • the Senate committee recommendation for 2013.
    • The NASA administrator has indicated furloughs are not contemplated for employees at this time, but $726 million will be cut from fiscal year budget levels, affecting space exploration and other plans. NASA will issue an agency planning memo and directives on sequestration soon.
    • A HUD official indicated that all programs, except housing vouchers for veterans, will be cut under sequestration. Public Housing Authorities would likely start getting less funding in March, but other programs would be handled differently (we are not sure what that means for SHP and CoC Program grantees). The applications submitted in January were under FY12 federal funding and the issue now is FY13 funding; therefore, the sequestration cuts likely would not happen until the next application cycle for the CoC Program.

We also recommend two summaries of sequestration-related information for you to read:

As additional information becomes available, we will post it on our website: http://research.unl.edu/sequester.

Meanwhile, we recommend researchers maintain contact with their program officers for specific information regarding their funded or pending projects. We also recommend closely monitoring accounts for early warning signs of overruns. It may be necessary for units to prepare to fund “hardship” cases. As always, the Office of Research and Economic Development remains available to discuss any such cases or any questions you may have. Now, more than ever, it’s important to aggressively pursue the external funding opportunities that do exist and to submit the highest quality proposals possible.

Thank you for your important contributions to our growing research university. We will do our best to track the effect of the sequestration ‒ both research and funding being cut and that which cannot be undertaken ‒ and will remain in contact with you as this issue further develops.

Sincerely,

Prem S. Paul
Vice Chancellor for Research and Economic Development
University of Nebraska–Lincoln