SUBJECT:

Impact of the Sequester

The federal government has been unable to reach an agreement to prevent the across-the-board budget cuts known as sequestration. All programs will be affected; however, the management of the cuts will vary across agencies. Domestic discretionary spending (including non-defense R&D) will be cut 5.1% for FY13. Defense discretionary spending (including defense R&D) will be cut 7.3%. Sequestration, in the absence of a bipartisan solution, will continue for the foreseeable future. The federal government is currently operating on a six-month continuing resolution (CR), which funds the government through March 27. A budget must be passed by then to avert a complete government shut-down.

At UC San Diego, for the first 7 months of the FY2012-2013 fiscal year (through January), federally sponsored research awards are down by 8%. This is likely a result of agencies anticipating sequestration and slowing their rate of spending. How the sequestration will affect UCSD further depends largely on how the federal agencies implement the cuts to their budgets. Some preliminary information follows below:

- NIH indicates that they expect to fund non-competing awards at 90%, and will make fewer competing awards to meet the budget cuts. Each Institute within the NIH may choose different strategies for applying the cuts. The full statement can be found at:
http://grants.nih.gov/grants/guide/notice-files/NOT-OD-13-043.html

- NSF expects to make nearly 1,000 fewer awards under the sequester. NSF further states that it expects to continue current awards at the current levels, with no impact to existing standard grants, at least for FY 2013. The full notice can be found at
http://www.nsf.gov/pubs/2013/in133/in133.pdf

- DOD senior research officials have estimated that DOD university research for FY13 will be cut by some $300M.

- 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% of the minimum of four figures, including 1) the final 2012 appropriation, 2) the President's request for 2013, 3) the House of Representative's committee recommendation for 2013, and 4) the Senate committee recommendation for 2013

- The NASA Administrator has indicated that $726M will be cut from FY13 budget levels, affecting space exploration and other plans. The NASA CFO will be issuing an agency planning memo and directives on sequestration soon.

Several articles projecting how agencies will apply the cuts can be found at:

American Institute of Physics
http://www.aip.org/fyi/2013/031.html

Washington Post
http://tinyurl.com/bezmzmz

UC San Diego is using every means possible to advocate for the continuation of research support at the federal level. Additionally, the University of California will continue to advocate for research in Washington through the Office of the President.

In the meantime, we recommend that PIs maintain contact with their program officers for specific information, and departments monitor accounts closely for early warning signs of cost overruns. PI’s should make every effort to maintain reasonable expenditure rates on current or future allocations, as agencies may look to draw down funding where there are surpluses.

We will continue to share information as it becomes available, and post it on Blink at http://blink.ucsd.edu/sponsor/ocga/sequestration.html.

Sandra A. Brown Vice Chancellor for Research