By Brigette S. Pfister, MHRD, CRA
Director of Sponsored Programs for Humanities & Sciences
Over the past year, the news has been filled with ongoing legislative disputes in Washington. Terms like fiscal cliff, debt ceiling, and sequestration have become part of our vocabulary. With myriad predictions being made, it can be hard to decipher what impact recent government actions could have here in the College of Humanities & Sciences.
There are several recent government actions that could substantially influence us. The first is known as sequestration, or the “fiscal cliff.” This was a result of the Budget Control Act of 2011, which imposed across-the-board cuts to defense and discretionary programs in the event that Congress could not reach a compromise on the federal budget. The Act was supposed to motivate Congress to reach a solution, as no one wanted or expected to see sequestration implemented. Unfortunately, Congress failed to reach a compromise, and sequestration went into effect on March 1, 2013.
Sequestration resulted in substantial budget cuts to our major federal funders. As a result, we have received fewer new awards, and our continuing awards have been reduced. VCU President Michael Rao estimated in February that VCU’s grant portfolio could see reductions of $12-$21 million by September 2013 as a direct result of sequestration. Luckily, we have not seen this dire outcome just yet—VCU’s grant award portfolio showed excellent performance in fiscal year 2013—but that doesn’t mean that effects won’t be felt later.
For example, at the departmental level, fewer new grant awards could result in a lack of replacement funding for projects slated to end soon. Individuals paid from those projects would likely be laid off if no source of new funding could be found. Reduced budgets for continuing projects could result in cuts to the number of people a given project could support. Sequestration will also make it harder for new faculty to get their first grant, as grant programs become increasingly competitive. This in turn makes it harder for them to support graduate students and postdoctoral associates. There could also be an impact on federally funded fellowships, scholarships, and student aid. The federal work-study program, for example, could lose up to $50 million dollars as a result of sequestration. That represents a substantial number of students who would have to find other sources of income!
As if that weren’t enough, sequestration is only one piece of the puzzle. Other government actions have the potential to compound the impacts. One such action is the Affordable Care Act, otherwise known as “Obamacare.” Aside from the political controversy, the ACA has had some unintended consequences. In Virginia, it resulted in the Manpower Control Act, or the “29-hour Rule.” This law limits part time and hourly employees to a total of 29 hours per week. This has resulted in loss of income for students and other part time employees, some of whom have historically held multiple jobs at the university. Multiple university jobs are no longer allowed under the Manpower Control Act. In addition, since the rule applies to adjunct faculty too, it has resulted in a reduction in the number of credit hours they can teach. This means an additional burden on the already overloaded full time faculty, who must make up the shortfall in credit hours taught, in addition to their existing responsibilities—like grant writing. This could further depress our new award activity over the next few years.
This week’s government shutdown adds yet another dimension of complexity. The government shutdown was brought about by circumstances similar to those of sequestration. Once again, legislators needed to compromise on the federal budget in order to avert disaster. This time the point of contention was the Affordable Care Act. Republicans wanted to defund the ACA as a condition of passing the Continuing Resolution that would keep the government operational. Democrats refused to approve any bill that attempted to defund or otherwise nullify the ACA. Once again, no compromise was reached, and the government shutdown took effect on October 1, 2013.
Immediately, many federal systems were taken offline. This means that we can’t submit new proposals, progress reports, or even establish new accounts. For proposals that were submitted immediately prior to the shutdown, review panels will not be convened, and reviews that were in progress prior to the shutdown cannot be submitted to the sponsor agencies until normal business resumes. Awards already delayed and reduced by sequestration have now stopped altogether for the duration of the shutdown. Though there is widespread conjecture on the subject, no one really knows what the long term impact will be on university research. It largely depends on the length of the shutdown and whether or not Congress is able to reach a compromise at last.
During the shutdown, work on existing projects is allowed to continue, provided that funding has already been made available. However, we are unable to draw down funds from the federal government. If we don’t already have it, then we can’t spend it! If the shutdown lasts long enough, even existing projects may have to layoff grant funded personnel, and in some cases, completely stop work. Also, the government isn’t processing passports and visas during the shutdown, so projects that depend on foreign travel may be held up considerably.
The situation could worsen if the shutdown lasts more than two weeks, because there is another debt ceiling deadline approaching. If Congress once again fails to compromise, the United States could default on our national debt. There is no clear picture of what the impacts of that would be, but we know they wouldn’t be positive.
Since our overall grant portfolio at VCU did not appear to suffer in FY13, it might be tempting to disregard some of the more dire warnings. However, it is important to recognize that incoming awards are based on proposals submitted in FY12 or earlier, so many of those funding decisions were made prior to the current crisis. We probably won’t see the true impact of all of the above until FY14 or thereafter. At minimum, the cessation of all proposal activity during the shutdown will result in delayed resumption of award activity, in addition to the delays and budget cuts already happening because of sequestration. This will likely cause our total awarded dollars to decrease over the next few years.
Overall, the impact on VCU research may not be disastrous, but at the unit level, grant projects and the individuals working on those projects could suffer significant impact from the cumulative effects.