In the final scene of the movie “Thelma and Louise,” the two main characters intentionally drive their convertible at high speed off a cliff in the desert.

car flying off cliff- copyright from movie Thelma and Louise

The scene is proving iconic for the pending action associated with the Budget Control Act that Congress passed, and the President signed, over a year ago.  We know that action as “sequestration.”

In short, because of real and growing concerns over the increasing debt of our federal government, our representatives in Congress laid out a series of control measures which, if not adopted by choice, would result in an automatic budget reduction of between 8.2% and 9.4% (for non-defense and defense discretionary budgets, respectively) on 2 January 2013. The action of sequestration was intentionally designed to be so aggressive and unpalatable that Congress would take more measured and reasonable approaches (presumably in the form of increasing revenue and decreasing spending, in some combination) well before that deadline.

Well, for a variety of reasons, including a contentious and highly charged series of election campaigns, that more measured solution didn’t transpire.

Speeding toward the cliff

Smart people are working to find a meaningful and implementable solution. This cannot simply be “voted down.” The fiscal problems are real (to paraphrase former Senator Everett Dirksen, “a debt of $1.2T is real money”).  But the realists also recognize that trying to solve this problem with a draconian cut would be like losing 8.2% of your body weight through decapitation: not a sustainable solution.

My own belief is that Congress and the President, through a mixture of deferrals and compromises on spending/revenue generation, will soften the blow of the immediate FY13 crisis (but I kid you not, there will still be a blow), while buying time to develop a more sustainable solution that won’t cripple the current economic recovery

. . . kinda like throwing a detour in front of Thelma and Louise.

For folks like us, working in a predominantly federally funded research environment (roughly 70% of our university research revenue comes from agencies in Washington) this means we WILL have to make significant adjustments We have estimated that, unmitigated, these prescribed cuts will translate to an initial single-year hit of $15M to OSU’s research portfolio (plus an additional $2M to other programs).

Rest assured, at President Ray’s request, the Research Office and the Office of Government Relations are trying hard to determine what the impacts of such adjustments might mean.  The problem is that nobody in DC is sharing much information about how each agency may choose to make their cuts.

knife spreading peanut butter on bread on plate

 

The Office of Management and Budget (OMB) released their ‘guidance’ for these cuts, at the request of Congress, last month (OMB Report Pursuant to the Sequestration Transparency Act of 2012 (P. L. 112–155)): 394 pages of Excel spreadsheet wizardry, revealing nothing more than what appeared to be a “peanut-buttered” distribution of cuts at the previously indicated 8.2% and 9.4% level.

What will happen?

There are, however, many  rumors about how such cuts might be doled out.  Having worked in four different federal agencies myself (and having had five separate trips to DC in just a couple of months, recently), I am willing to guess about how this might play out.  I suspect those agencies that employ scientists in their own labs (DOE, Navy, NIH, EPA, USGS, etc.) will protect these “in-house” assets, at the expense of some of the extramural activities  – meaning even larger cuts to competitive research programs.  I also believe that agencies will try to soften the immediate blows to academic programs by simply deferring or delaying upcoming competitions, rather than rescinding actively funded programs. And I think we will see agencies trying to make surgical cuts to pare down to the bone those research projects that they still must continue to support, through efforts such as increasing matching requests, or perhaps even imposing salary caps (as some agencies already do). Let’s hope they don’t prescribe really dumb solutions, like reducing support for graduate students.

The real question:  What can we do ?  

The short answer is to develop as many options as possible. Start looking at your existing grants and prioritizing your expenses. Start thinking about alternative funding sources. The University’s success in growing our industry support for research (up by 42% in two years) is not an accident. If you haven’t thought about this route, let’s start talking, since there might be private sector funding out there to help accommodate reductions in federal support. Let us know if there are foundations that you want to try working with. The OSU Foundation has had some success in getting these kinds of resources to faculty on campus. Discuss this issue with your peers, your students and your academic unit, and with us in the Research Office.

We have a lot of very clever researchers at OSU. We’re going to have to apply some of the same creativity we use in our research to resolve this issue.

And, as a final thought, remember that this doesn’t go away.

Even if we soften the blow of the FY13 consequences, we still have another 10 years of budget reduction work at hand. The challenge is to find a smooth downhill off-ramp for Thelma and Louise.

Thank You

Rick Spinrad, Vice President for Research

Your comments to this posting are welcome.

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