Washington remains configured for political gridlock after last Tuesday’s elections, a fact which seems to portend two more years like the last two. But party leaders on both sides have indicated a willingness to work together in the new Congress, perhaps softening the hard line that built the so-called “fiscal cliff” towards which the country now hurtles. That willingness to compromise will be put to the test even before the new Congress is sworn in, as the lame duck session of the current Congress has two important deadlines looming before they can adjourn: the December 31, 2012, expiration of the Bush-era tax cuts and the January 2, 2013, deadline for automatic, across-the-board budget cuts called sequestration. Failing to address either deadline could plunge the U.S. economy off the “fiscal cliff,” say economists, and perhaps into recession.
In addition, the current Congress needs to decide how it wants to resolve the unfinished work in the FY 2013 appropriations process. Because of election-year gridlock, Congress was able to finish none of the twelve annual appropriations bills required to fund all the operations of the federal government, leaving agencies — including federal science agencies — operating under stop-gap funding at last year’s levels. The congressional leadership will have to decide whether to attempt to pass the unfinished bills before they adjourn, or let the new Congress deal with them.
On top of all of that, it appears likely that the Federal government will once again hit the Federal statutory debt limit by the end of 2012, though a series of “extraordinary measures” taken by the U.S. Treasury may push that deadline until early February 2013. If Congress cannot agree to increase the debt limit before federal spending reaches it, the government will shut down and the U.S. could default on its debts.
So, despite remaining mired on a playing field seemingly designed to ensure gridlock in the legislative process (ie, a somewhat fractured GOP majority in control of the House, a narrow Democratic majority in the Senate, and a Democratic president), Congress needs to take action on a series of issues on which it could not reach agreement at any point over the previous two years, and it needs to do so over the next six weeks or risk plunging the U.S. into recession. And with relatively little change to that playing field, the new Congress will need to solve whatever unfinished business the current Congress leaves it, and address the debt limit, likely by February.
The lame duck has essentially three big decisions to make — on appropriations, the looming budget sequestration, and the expiring tax cuts. Of the three, sequestration and the tax cuts are the most time-sensitive and potentially impact the U.S. economy the most. Congress has already passed stop-gap funding for federal agencies through March of 2013, so failing to get appropriations done before the end of the year would not force agencies to shut down.
Sequestration and the expiring tax cuts have been grouped together by congressional Democrats, who would like to extend the Bush-era cuts, but modify them so that tax rates on the top tier payers would increase. Without concessions designed to raise government revenue, congressional Democrats have been unwilling to support efforts to mitigate cuts called for in the sequester, especially on defense spending that Republicans oppose. Neither party believes the cuts in the sequester are in the best interests of the country. Indeed, the sequester was designed (in the wake of the inability of the two parties to come up with an agreement for cutting the debt during the last debt limit crisis in August 2011) with cuts that were hard to stomach to force the two parties to reach agreement on cutting the deficit on their own.
So there are a few scenarios in which the lame duck may play out. The two least likely are:
- Congress commits to a proposal for cutting the federal deficit by $1.2 trillion over the next ten years by some combination of raising revenue, cutting discretionary spending, and/or reforming entitlement programs, thereby eliminating the need for the automatic, across-the-board discretionary spending cuts called for in sequestration, and agrees to an extension of the Bush-era tax cuts, with some modification;
- Congress does nothing, allows the tax cuts to expire and the sequestration cuts to take place.
More likely, according to many Congressional observers and staffers, is that Congress will agree to delay the sequestration cuts for a period of a few months to maybe as much as a year so that Members have more chance to evaluate different solutions, and will either reach some agreement on the tax cuts, extend them for a short period for more debate, or allow the tax cuts to expire with the expectation that the new Congress will act on them immediately, hopefully causing no impact to taxpayers. Because this scenario would not reduce the uncertainty in the market, which is concerned whether sequestration or the tax cut extensions will eventually happen, Congressional leaders may elect to “send a signal” of their seriousness about controlling spending by passing a FY2013 omnibus appropriations bill with some significant across-the-board cut — but not as significant a cut as the sequester would have made.
This would be a marginally better, but still pretty poor, outcome for those concerned about federal investments in science. Research accounts at the National Science Foundation and National Institute of Standards and Technology appeared to be on a path to fare well in the FY 2013 appropriations process, and computing accounts at the Department of Energy would hold their own or grow slightly. An omnibus with across-the-board cuts would mitigate those gains in part, or perhaps completely. However, the alternate scenarios look even worse. Any cut through sequestration (on the order of 8 or 9 percent) would far outstrip the gains science agencies were likely to see, and sequestration followed by an omnibus in March might make a bad situation even worse.
The science community will also find itself without some key allies in the new Congress, as a number of “champions” for the sciences have retired or lost election battles in November. We will have more detail in the next issue of Computing Research News, but retirements like Sen. Kay Bailey Hutchison (R-TX) and Sen. Jeff Bingaman (D-NM) and losses like Rep. Judy Biggert (R-IL) mean that there are fewer Members of Congress with experience making the case for federal investment in fundamental research.
In any scenario, science agencies and programs, and all other federal agencies, will find themselves under increased budget pressure over the next two years, and probably into the foreseeable future. About the only positive change in the dynamic is a President who will no longer have to run for office, freeing him, potentially, to make politically “riskier” compromises on things like entitlement and tax reform.
The deals Congress will make over the next several weeks and months are likely to resonate in federal budgets for years to come. We’ll have all the details.
The House and Senate leadership (and the President) have agreed in principle to a stopgap spending bill that will keep the government running after the start of FY 2013 on October 1st, despite having not passed any of the 12 annual spending bills that fund government activities. The so-called “continuing resolution” will keep government running through March 2013 at FY 2012 levels, giving the new Congress (and perhaps new president) the opportunity to leave its mark on FY13 spending.
Speaker of the House John Boehner (R-OH) and Majority Leader of the Senate Harry Reid (D-NV) came to the agreement after Boehner agreed to slightly higher-spending levels in exchange for the longer-term CR. Republicans — believing they’ll do well in November and perhaps take the Senate and the presidency — preferred to have the new Congress decide the final appropriations outcome, rather than let a lame-duck Congress take it up in November and December. The agreement calls for a CR that’s “clean” with no additional riders (ie, no attacks on the President’s health care program).
Congress will take up the CR shortly after returning from the August recess and likely quickly pass it, perhaps leaving some time before heading home to campaign to figure out how to deal with the looming automatic across-the-board cuts due to the sequestration provisions in the Budget Control Act that will take effect Jan 2, 2013. Perhaps pushing off the final appropriations resolution for FY 13 until March signals that the leadership expects to come to some agreement on delaying or postponing sequestration in the coming weeks…we’ll see. Otherwise, there has been no progress in settling the sequestration question. In fact, at the moment the Administration is trying to convince the nation’s defense contractors that sequestration needn’t result in massive layoffs and therefore companies shouldn’t feel compelled to send out pink slip notices to all employees on November 2nd, as they’re threatening.
More details as they become available!
The House and Senate Appropriations Committees have just released their drafts (House – Senate) of the FY2013 Commerce, Justice, Science Appropriations Bill, and the numbers look pretty decent for NSF and NIST.
Short version: NSF would see an increase of 4.3 percent overall in FY13; NIST would see increases of $54-56 million to its core research accounts; NASA would see cuts.
On NSF, from the House —
National Science Foundation (NSF) – The legislation funds NSF at $7.3 billion, which is $299 million above fiscal year 2012 and $41 million below the President’s request. NSF’s entire increase is provided to core research and education activities, which are critical to innovation and U.S. economic competitiveness, including funding for an advanced manufacturing science initiative and for research in cyber-security and cyber-infrastructure.
That’s a 4.3 percent increase over FY12, 1 percent less than the President’s Budget Request. NSF’s Research and Related Activities Account would receive a 4.5 percent increase in the bill.
From the Senate —
National Science Foundation (NSF) — The National Science Foundation (NSF) is funded at $7.3 billion, an increase of $240 million above the fiscal year 2012 enacted level.
Same overall level.
On NIST, from the House —
National Institute of Standards and Technology (NIST) – NIST is funded at $830 million in the bill, which is $79 million above fiscal year 2012 and $27 million below the President’s request. Within this total, important core research activities to help advance U.S. competitiveness, innovation, and economic growth are increased by $54 million above fiscal year 2012. In addition, the bill includes $128 million for the Manufacturing Extension Partnership program – which provides training and technical assistance to U.S. manufacturers – and $21 million for an Advanced Manufacturing competitive research initiative.
From the Senate —
National Institute of Standards and Technology (NIST) – NIST is funded at $826 million, which is $75 million above the fiscal year 2012 enacted level. The bill provides an increase of $56 million for NIST’s laboratories and technical research while maintaining strong support with industry partners including $128.5 million for the Manufacturing Extension Partnership and $14.5 million for the Advanced Manufacturing Technology Consortia (AMTech)
So, both have healthy increases for NIST core research.
NASA doesn’t fare as well in the House. On NASA, from the House —
National Aeronautics and Space Administration (NASA) – NASA is funded at $17.6 billion in the bill, which is $226 million below fiscal year 2012 and $138 million below the President’s request. This funding includes:
- $3.7 billion for Exploration – $59 million below fiscal year 2012. This includes funding to keep NASA on schedule for upcoming Multi-Purpose Crew Vehicle and Space Launch System flight milestones and to maintain progress in a reconfigured commercial crew program.
- $4 billion for Space Operations – $249 million below fiscal year 2012. The legislation will continue the closeout of the Space Shuttle program for a savings of $503 million.
- $5.1 billion for NASA Science programs – $5 million above fiscal year 2012. This includes $1.4 billion for planetary science to ensure the continuation of critical research and development programs that were imperiled by the President’s request. This also includes $628 million, as requested, for the James Webb Space Telescope.
NASA research also sees cuts in the Senate bill —
The National Aeronautics and Space Administration (NASA) is funded at $19.4 billion, an increase of $1.6 billion over the fiscal year 2012 enacted level. The large increase results from a reorganization of operational weather satellite procurement from NOAA into NASA. Without the funds for weather satellite procurement, this level represents a $41.5 million cut from the fiscal year 2012 enacted level.
The bill provides $5 billion for Science which is $69 million less than fiscal year 2012. Within Science, the bill restores $100 million of a proposed cut to robotic Mars science programs, resulting in a total of $461 million for Mars robotic science.
So, on the whole, good news for the agencies we care most about in this bill, except for NASA. The bills have some marked differences in the way they treat other programs in the bill — NOAA satellites paid for by NASA, for example and differences in the way some Dept of Justice programs are funded — that might cause some rejiggering of funding levels as these bills go to the floor and into conference. But it’s always better to start with a big-ish number and work from there, rather than starting with a smaller number. Also important is the verbiage used by both committees in summarizing the increases. Our arguments about the importance of NSF and NIST in promoting US innovation and competitiveness still resonate loudly with both sides of the aisle.
More details as they become available!