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Getting Ready for Sequestration

BU already tightening the belt

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How will sequestration affect research at Boston University? The School of Medicine already is taking a 10 percent haircut on some federal grants that were promised, but are being withheld, forcing some lab staff layoffs. David Coleman, a MED professor and chair of the department of medicine, fears a slowdown in its studies of how a variety of diseases work, with delayed hires and cuts in equipment purchases.

On the Charles River Campus, Howard Eichenbaum, a College of Arts & Sciences professor of psychology, is planning for no undergraduate hires, and possibly no new graduate student or postdoctoral fellows, for his studies of how memories are retrieved and processed, with its implications for future dementia treatments.

Those are just two snapshots of academic life on the eve of sequestration, the agreement between President Obama and Congress to make automatic, across-the-board spending reductions if the two fail to agree to a deficit-erasing plan.

In the 2012 fiscal year, federal dollars paid for 90 percent of the $362.5 million in sponsored research spending at BU, according to Andrew Horner, associate vice president for financial affairs. (“Sponsored” research is any funded by a non-University source.) Horner says the rest of the funding came from foundations, industry, the state and city, and the University, which covers researchers’ overhead out of its own revenue.

As for whether BU could tap other sources, from tuition to private gifts, to cover at least some of the lost federal money, Provost Jean Morrison is blunt: “Absolutely not. The loss of federal revenue cannot be made up elsewhere.”

While we know that sequestration will cut domestic spending 5.1 percent, University officials say the bottom-line hit to BU research is hard to predict, because different federal agencies have varying abilities to adjust the rate at which they impose their cuts. For example, the National Institutes of Health accounted for the most ($209 million) federal research money received by BU last year. But the NIH has 27 institutes, and each one will make cuts at its own discretion, says Jennifer Grodsky, the University’s vice president for federal relations. Depending on the federal funding source, Grodsky says, cuts to BU research grants could range between 5 percent and 10 percent.

Horner says damage from cuts will be lessened if Washington rescinds the sequester quickly. “If they come to the deal relatively quickly,” he says, “the impact would be much lower than if it lasted into April, May, and beyond.”

Grodsky says that because other revenue sources, like tuition, are needed for vital operations, “such as educating students,” the University will be unable to cover the federal cuts.

“All of our revenues are spoken for,” says Horner. “We’re a nonprofit institution, and we’re trying to balance the budget on an annual basis.”

Nor can money from BU’s $1 billion comprehensive fundraising campaign cover any shortfall, as donors, not the University, have discretion on how to spend that money, says Scott Nichols, senior vice president for development and alumni relations. “There is very little wiggle room in terms of directing money. Virtually every big donor we have knows exactly what they want to support. Certainly, the campaign strengthens the University’s finances; there is support coming in for research, but it’s for particular projects” specified by donors.

In fiscal year 2012, MED had $140 million in sponsored research expenses, more than any other University school. Karen Antman, dean of MED and provost of the Medical Campus, says the inability of Congress and the White House to agree on a current year budget—the nation is running on a “continuing resolution” that holds spending to last year’s levels—gummed up the research works even before sequestration.

“Federal agencies, such as the NIH, are already being very conservative with spending, because of their uncertain budgets,” says Antman, and funding agencies have withheld grants already awarded the University and delayed decisions on new grants. “We are already slowing important research,” she says. “We are letting laboratory staff go and accepting fewer graduate students, who are the future of innovation.…Research is not like a light switch that can be easily turned on and off. Cuts like these have a devastating impact to the future of health care. We will lose the next generation of leaders in science and medicine.”

Medical schools and teaching hospitals like MED-affiliated Boston Medical Center will be disproportionately affected, according to Antman, because they conduct more than half the research paid for by the NIH. Those studies have “the potential to change our lives,” she says. “We have people looking at the impact of pollution on human development, researchers trying to grow lung cells in order to combat cystic fibrosis, and people figuring out how the body can combat antibacterial-resistant infections.”

Eichenbaum, whose memory research receives almost $25 million in federal funding, mostly from the NIH, says he’s been told to anticipate that one-tenth of that will disappear. He says the types of lab layoffs that MED is imposing “would be a last resort,” one that he would avoid if possible by attrition of student assistants and not hiring new ones.

Coleman oversees about 250 researchers across 3 centers and 16 department sections, and their research attracts more than $100 million a year, 80 percent to 90 percent of it coming from the federal government. “We do not anticipate furloughing investigators unless the sequester lasts more than a few months,” he says. “We are, however, quite concerned about the ability of new investigators to launch their respective careers,” especially when their proposals would qualify for grant money that’s being withheld.

BU and other schools lobbied hard to avert the autopilot cuts regimen that Grodsky says few Washington politicians want. Sequestration was always a doomsday machine, she says, something that was “supposed to be so unpalatable it would force a deal.” BU President Robert A. Brown cosigned a letter last fall from Massachusetts university presidents to the state’s congressional delegation, urging a budget compromise. And after recently joining the Association of American Universities, an organization of leading research universities, BU contributed video commentaries by researchers to a website of the AAU, the Science Coalition, and the Association of Public and Land-grant Universities opposing the sequester.

Grodsky says she is optimistic that the University will weather the sequester. “Our faculty are extraordinarily entrepreneurial” in devising and managing their projects, she says. “Even in difficult circumstances, they tend to do really, really well.”

That resilience notwithstanding, Morrison sees a rougher road ahead. Sequester or no sequester, she says, “the long-term outlook for federal funding for the research enterprise, given our national debt and deficit, is not rosy.” And Brown, citing an inevitable drop in funding in his State of the University letter this week, announced plans to eliminate administrative redundancies, review academic programs for quality and impact, and make “difficult but necessary decisions” to scale back some of them.

20 Comments
Rich Barlow

Rich Barlow can be reached at barlowr@bu.edu.

20 Comments on Getting Ready for Sequestration

  • Kyle on 02.28.2013 at 8:21 am

    Lets clear something up here: the sequester is NOT cutting spending, it is reducing the amount that spending will increase. It is as if a Father graciously offers his son a $10 allowance, and his son demands $20, so his Father gives him $15, and the son complains that his Father “cut his allowance by $5.” Lets not get caught up and think that they are actually cutting spending.

    And as for BU being unable to cover the expenses absent more federal aid, perhaps a look at our current expenses could find some savings. How many Vice Presidents does BU need? There are three mentioned in this article alone, including a “Vice President for Federal Relations.” On this page: http://www.bu.edu/info/about/admin/ I see nearly 50 Vice Presidents, Provosts, Deans, etc. BU is an administrative machine with a $2 billion budget and plenty of auxiliary businesses and income streams – for good and bad (see: University exposure to real estate market in 2008 crash – D’oh!). Perhaps a renewed focus on education would help.

    • Mark on 02.28.2013 at 9:15 am

      The sequestration cuts are mindless across-the-board cuts rather than thoughtful ones. Their effect on the economy will actually make the deficit increase since revenue to the federal government will slacken. Fox News can insist there will be no major impact all they want — but that is simply untrue.

      To cut research is shortsighted as each dollar invested produces many dollars in future economic growth.

      And let’s not fall for the parity argument where both sides are equally wrong. Pres. Obama offered a “grand bargain” several times to the GOP. They refused it.

      Isn’t is clear by now that the GOP strategy is simply to say “no?”

      • Kyle on 02.28.2013 at 10:02 am

        Mark – I do not see the need to politicize this situation. I chose to stick to facts, whereas you chose hyperbolic partisan rhetoric (“Fox News can insist…”, blaming GOP, etc).

        The only “fact” that I can find in your comment is that you claim that government investments in research produce many dollars in future growth for every dollar spent…if this is so, it seems to me that we should quickly move to spend one, two, three, or more trillion dollars on research, thus guaranteeing us many trillions more in future growth. Unfortunately, the track record of government “research” investments is full of both successes and failures, such as Solyndra. Perhaps the private sector is the best place for research money allocation.

        • Sigh on 02.28.2013 at 10:51 am

          I enjoyed that you opened with a request to stick to the facts and not politicize the situation and then immediately jumped to Solyndra, one failure in a sea of both successes and failures, that was highly politicized.

        • Steve on 02.28.2013 at 12:30 pm

          Kyle – the sequester will result in researchers being laid off and potential new positions will not be filled. There will unequivocally be a negative impact on the amount of research being performed.

          The private sector is simply not capable of producing basic science research. Their r&d dollars are overwhelmingly dedicated to the development of existing ideas to take them to market.

          Here’s a good report that details the importance of federal support for university research: http://www.fas.org/sgp/crs/misc/R41895.pdf
          * 80% of all research traces back to academic institutions
          * 56% of basic research is done by universities (only 17% is private)
          * 60% of all science and engineering research is paid for by grants from the federal government

        • Tombo on 03.02.2013 at 8:20 pm

          Trusting the private sector is a huge mistake. The private sector has time and time again failed to put research into new vaccines or antibiotics, simply because it isn’t profitable enough for them. Not only that, they refuse to push life-saving cancer drugs through to clinical trials, because they’re making more money on drugs that keep the disease at bay, rather than actually treating it.

          Some research needs to be done for the sake of knowledge, not for the sake of profit. Furthermore private research is all geared towards application, not basic research. Failing to do the basic research hurts the private sector in the long run. Research needs to be done for the sake of knowledge for progress to occur in the long run, and the only place where that really happens is in Universities, not corporations.

      • DB on 02.28.2013 at 12:13 pm

        It is the presidents strategy know your facts. Cuts in the increase of spending are NOT cuts. I’m concerned about the 5% figure as it is actually less than 3%.

    • Sigh on 02.28.2013 at 10:53 am

      Without a greater understanding of the roles and responsibilities of these various administrative employees, how can you state a renewed focus on education would help? Do you know what the responsibilities of the Vice President for Federal Relations are? It’s a rather ironic choice for you to call out… http://www.bu.edu/provost/about/administration/jennifer-grodsky/

    • Jason on 02.28.2013 at 2:35 pm

      Your analogy is not only not factual, it is completely inaccurate. Congress is not cutting funding that is being asked for, it’s cutting funding that has been promised.

      Furthermore, the sequester cuts are entirely idiotic: this is perhaps an opinion, but is an opinion that virtually no one, including congressional Republicans, disputes. Budget issues at the federal level are a long-term issue. Sequester, according to some estimates, actually increases long-term deficits through its capricious short-term damage to the economy. The big drivers of long-term debt, like Medicare and Medicaid, are not even touched by sequester.

      I’m disheartened to see that Kyle, apparently in possession of none of the significant facts on this issue, chooses to resort to a claim that he is being vilified for his politics. That’s cheap, and its typical of our current political discourse. If you really want to understand how federal budgets work, turn off the cable news and take a macroeconomics course, Kyle.

    • SMG Student on 02.28.2013 at 4:33 pm

      You all have cute arguments. The sequester is a mindless cut and not the best way to choose to allocate scarce resources.

      On the other hand the sequester doesn’t even come close to bringing our budget into no deficit territory. Logically we either require much greater further spending cuts or some form of debt default.

      It’s really a shame all the things that we are going to have to give up. Unfortunately this is what happens when finances are managed poorly.

  • MJG on 02.28.2013 at 8:54 am

    Given that inflation is real and reductions in NIH funding are happening, there is a substantial loss of dollars to research budgets. As stated in the article the NIH has been doing this for the last few years and sequestration will promote this shrinkage.

    This is absolutely stupid. Groundbreaking research in fields of energy, medicine, computers, and telecommunications will continue elsewhere. The fileds of science and technology do not stop moving forward and we as Americans will be left in the dust. The approach of the sequestration is moronic and as irresponsible as it gets when running a government properly.

    As a young scientist myself I think its time I take that underwater welding career track.

  • Peter on 02.28.2013 at 9:29 am

    I love your analysis, Kyle, and couldn’t agree more. Thank you for posting!

  • Melissa on 02.28.2013 at 11:56 am

    Can’t agree more, MJG. Take a look at the big picture. The Europeans are catching up with their supercomputers on weather-predicting model systems, and they already beat us on finding the Higgs Bosson – the so-called “God particle” of the universe – last year. China and India are the world’s manufacturing and engineering centers with increasing innovation power. Now take a look at us, what do we do last year in DC? Fiscal cliff? Sequestration? Endless political combat between the red and the blue? Do any of these do anything good to us or the country?

    Although I am not a politician, but I do understand that this country will be left in the dust if we keep it this way. I believed that democracy is not just about the freedom of expressing different opinion, it’s also about compromising, something that few Washing politicians remembered.

    • SMG Student on 02.28.2013 at 4:36 pm

      Higgs Bosson was a collaborative effort, in fact BU was involved. Europe will certainly not be spending money on future scientific endeavors.

      China is also not an engineering center. Their engineering is very poor.

      Can be a little more complex then us v. them

  • Sharon on 02.28.2013 at 12:02 pm

    The private sector is highly unlikely to fund research that won’t ultimately result in profit. That means that studies with potentially very large public health impact (e.g., research on how to reduce rates of infection in hospitals, the impact of things like food additives and air quality on health, and psychosocial treatments for psychological disorders like PTSD and depression) wouldn’t get funded.

  • Old School on 02.28.2013 at 2:14 pm

    “Nor can money from BU’s $1 billion comprehensive fundraising campaign cover any shortfall, as donors, not the University, have discretion on how to spend that money, says Scott Nichols, senior vice president for development and alumni relations. There is very little wiggle room in terms of directing money. Virtually every big donor we have knows exactly what they want to support. Certainly, the campaign strengthens the University’s finances; there is support coming in for research, but it’s for particular projects” specified by donors.”

    There is some money that comes in that is for certain annual funds, which are not directed to specific projects, but give the schools and colleges some discretion on how that money is spent. This money has probably been allocated already, but it could be shifted or changed 7/1 for the new fiscal year if necessary.

    This is a cop out.

    • Peter on 02.28.2013 at 11:07 pm

      Seriously, that is not a cop out. That’s exactly how it works. The quantity of uninformed commenters here is astounding.

      People don’t donate hundreds of thousands of dollars or millions of dollars and say “spread it around” – they get a name on a building or a wing or a scholarship (and the money goes to that building/wing/scholarship) or they fund a specific program that interests them.

  • BottomLine on 02.28.2013 at 2:54 pm

    Some agencies, like NIH, are in fact cutting spending. I was promised $10. I hired people who rely on that money. NIH has told me that because of sequestration I will now get $9. Your initial analogy is dead wrong.

  • student on 03.01.2013 at 7:36 am

    President Obama prefers a “balanced approach” of cutting but also raising taxes. If they want to fix the economy, continuously raising taxes on those they deem wealthy is not the way to do it.

    It is sad we couldn’t reach an agreement but Obama and Congress established this. It has to happen. We cannot afford this spending anymore, promised or not. If a person can’t afford something, they don’t go and buy it anyway, they wait till they have the money.

  • Except on 03.01.2013 at 12:10 pm

    Said things were already bought. And now the government refuses to pay for them.

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