In an email to the UW community, President Michael Young estimates an upcoming loss of $75-100 million in federal research funds if Congress does nothing to avert the sequestration set to begin today. In his own words (emphasis added):
Today, the long-expected and much talked-about automatic federal budget reductions—otherwise known as “sequestration”—take effect. While many areas of federal spending in our state will be affected, resulting in reductions in services and jobs, the major impact to the University will be in our research program, with a smaller impact on student financial aid. The overall cut in the federal budget for 2013 is estimated to be around 5.1 percent for “nonmilitary discretionary” spending, the category much of our research funding falls into. But because the cuts are starting now, at the midway point of the federal fiscal year, and must be taken in the remainder of 2013, the actual amount of the cut is estimated to be much higher, more in the 9 percent range. Unless Congress does something to alter what it has set in motion today, we estimate that our research program will lose somewhere between $75 and $100 million of the $1.05 billion we receive in federally funded research.
On the student aid side, we estimate that next year we will lose about $33,000 in federal work-study funds, but we intend to patch this with other money. In this first year of sequestration, the need-based Pell Grants are protected from cuts, but we do not know what future years will bring. Because this relates so closely to our commitment to keep UW education affordable for low-income families, we will be watching this area very closely.
There is a great deal that is not known about how federal agencies intend to implement their cuts. We may see, for instance, revisions to existing research grants, fewer new grants being awarded, delays in funding and receipt of award notices and contracts, less frequent requests for funding applications and proposals, and possible reductions in approvals of carry-forward requests. As a result, for the immediate future, principal investigators are advised to be cautious and conservative in spending federal awards and in planning for future federal funding. While most of our attention is currently focused on 2013, it is important to note that sequestration is mandated through 2021. So, even if Congress protects some programs from drastic cuts, an overall reduction in federal spending will surely occur over the next decade. Planning ahead will be crucial to our success.