University Times

Pitt could lose $32.6 million in federal research funding as a result of the sequester of $85 billion in current-year federal spending, the University’s governmental relations office is estimating.

Research is Pitt’s top generator of operating revenues, bringing in $780.4 million in fiscal year 2012. According to the University’s FY12 financial report, approximately 63 percent of that amount was awarded through the National Institutes of Health. (See Sept. 27, 2012, University Times.)

The NIH awards database showed 1,035 awards to Pitt in FY12, totaling nearly $419.5 million.

In addition, Pitt was ranked by the National Science Foundation among the top five universities in total federal science and engineering research and development support last year. NSF funded 139 Pitt awards totaling nearly $24.75 million in FY12.

With NIH facing a $1.6 billion cut and NSF a $388 million cut, research will suffer.

In addition, NASA is facing a $970 million cut and the Department of Defense research budget could be reduced by $6.3 billion. Both are sources of research funding for the University as well.

Sequestration is a result of the Budget Control Act of 2011, under which a supercommittee was formed to come up with a plan to cut the nation’s debt by $1.2 trillion over 10 years. The legislation included the provision that if the supercommittee could not agree on a plan, across-the-board cuts automatically would take effect.

Half of the sequestration cuts are to come from the defense budget and half from non-defense.

Sequestration of $110 billion was to have taken effect in January, but a year-end tax deal designed to avoid the so-called fiscal cliff delayed sequestration until March 1 and reduced the amount to $85 billion that must be cut by the Sept. 30 end of the federal fiscal year.

According to an Office of Management and Budget report, the sequester would reduce non-exempt non-defense discretionary funding by 5 percent and non-exempt defense discretionary funding by 7.8 percent. Medicare would be reduced by 2 percent while other non-exempt non-defense mandatory spending would be cut by 5.1 percent and non-exempt defense spending by 7.9 percent, Kenneth M. Lynch, Pitt associate director of federal relations said.

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While the University is making an estimate of the potential loss, the impact remains unclear until federal agencies adjust their own reduced budgets, cautioned Lynch. “It is extremely difficult to say what the exact impact on Pitt will be for this fiscal year,” because it remains to be seen how cuts to federal agencies will be implemented, he said.

“We do not yet know what the cuts will be on the individual program/project level.  It also remains unclear how much discretion each agency will have in making the cuts at the individual program and project level.  Some programs may suffer much higher reductions, and some may not be cut as much as the listed reduction.”

In a state Senate appropriations committee hearing in Harrisburg last week (see related story this issue), Nordenberg noted that the cuts in research funding will be felt statewide. At Pitt, “We have seen a decline in the last couple of years as the stimulus dollars that were used to supplement the research budgets of agencies like the National Institutes of Health and National Science Foundation have gone away,” the chancellor said. “Our big concern is what’s going to happen with sequester and whatever happens in Washington in the months ahead.

“We do expect those agencies to be heavily hit,” he said.

“Pennsylvania is, compared to other states, a very big importer of those research grants all the way across the state. So that will have an impact on our institutions, but also on our communities,” he told the Senate committee.

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NSF is anticipating it will cut approximately 1,000 new research grants, NSF director Subra Suresh told awardees in a Feb. 27 message. Suresh also stated that the agency is basing its sequestration planning around the principles of protecting commitments to its core mission and maintaining existing awards, protecting the NSF workforce and protecting STEM human capital development programs.

“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,” Suresh stated.

And, in a March 4 message to NIH-funded institutions, Sally Rockey, NIH’s deputy director for extramural research, cautioned that its budget reduction could halt continuation awards or reduce the scope of awards. “Additionally, plans for new grants or cooperative agreements may be re-scoped, delayed or canceled depending on the nature of the work and the availability of resources,” she stated.

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Students also may feel the pain to the tune of $43.2 million in the coming academic year due to increased costs in loan originating fees on Stafford and PLUS loans, Lynch said, noting that Pell grants would not be affected. Federal work-study and supplemental Educational Opportunity Grants are set to be reduced by about $86 million in the coming year.

Lynch said, “The next several weeks will be critical for determining whether the sequester remains in effect and/or whether Congress and the president will allow for increased flexibility in carrying out the cuts. Current funding for the federal government expires on March 27 and Congress may use that deadline to address sequestration.  While it is unlikely Congress will eliminate the overall level of cuts, it is possible they will shift the burden. The House Republicans are poised to pass a continuing resolution this week that keeps most sequestration, but restores funding for defense operations, defense R&D and many Veterans Affairs programs that are currently subject to cuts.”

The continuing resolution, introduced Monday by House appropriations chairman Hal Rogers, was expected to be voted on today, March 7.

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The full OMB report can be found at www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/fy13ombjcsequestrationreport.pdf.

Details on how the sequester might affect research nationwide are posted at www.scienceworksforus.org, a project of the Association of American Universities, the Association of Public and Land-grant Universities and The Science Coalition.

—Kimberly K. Barlow