Fiscal cliff: sequestration and the individual scientist

The deadline for the government to pass legislation that averts the fiscal cliff is rapidly approaching. Negotiators are now focusing almost exclusively on working out a deal that extends tax cuts for most Americans. However, negotiators do not appear to be discussing solutions to the devastating spending cuts set to go into effect on Jan. 2. Barring a deal that postpones sequestration, nearly all federal agencies, including the National Institutes of Health and the National Science Foundation, will sustain an 8.2 percent cut to their budgets.

Several pieces have been written about the effects of tax hikes, cuts to the defense budget, and cuts to universities and research funding. But what does sequestration mean for the individual researcher? Here are sixthings you need to know that could affect how you do science should the country go over the fiscal cliff.

1. The 8.2 percent cut required by sequestration comes out to a $2.5 billion cut for NIH, a $560 million cut for NSF and significant cuts for other federal science funding agencies.
2. By law, the NIH cannot reduce spending on the salaries of its federal employees with the speed required by sequestration. Thus, to trim the NIH budget by $2.5 billion, the extramural grant program is likely be cut by more than 11 percent.
3. The White House probably will let each agency determine how best to deal with sequestration. The NIH leadership, in turn, probably will notify each institute/center of its budget under sequestration but allow each to decide how to administer these budget cuts.
4. Each NIH institute/center is likely to administer its cuts in a different manner. This could mean reducing the funding level for noncompeting grants or cutting specific programs altogether.
5. Our sources suggest that the NSF likely will not cut specific programs but will reduce grant awards and try to spread the pain of budget cuts out over time.
6. Salaries comprise a significant percentage of grant monies. Thus, if grant funding is reduced, some scientist jobs may be eliminated.
   1. Tenured faculty members and graduate students often have employment guarantees from their institutions so the employment of these scientists likely will not be directly affected by sequestration.
   2. Contract scientists, such as postdoctoral scholars, nontenured faculty, instructors, staff scientists and lab technicians, are most likely to bear the brunt of workforce downsizing due to sequestration.

The possibility of a deal being completed before the new year is diminishing rapidly. It is not clear how sequestration will affect the economy, but it is possible that the nation could fall back into recession. Some people in Washington predict that sequestration will be replaced in the upcoming debate over the debt ceiling. However, this is only speculation.

UPDATE: With the passage of a deal on the fiscal cliff, sequestration has been postponed for 2 months. Stay tuned to the Policy Blotter to find out how these developments will affect science funding and individual researchers.

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