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Fiscal Cliff Deal Delays Major Budget Cuts, but Includes Reductions That Could Affect Science

Although few people are talking about it, the legislation passed yesterday by Congress to avert the fiscal cliff by revising tax policies also contains $4 billion in cuts this year to discretionary spending, including research. But it delays for 2 months the automatic, across-the-board reductions that science lobbyists have said would be a disaster for U.S. researchers.

Last night, the House of Representatives approved a bill adopted earlier in the day by the Senate. It was based on a deal struck during negotiations between Vice President Joe Biden and Senate Minority Leader Mitch McConnell (R-KY). Although the country as a whole is rightly focused on the changes in various tax provisions, the new budget agreement also requires slicing $12 billion from discretionary spending over the next 2 years. The cuts would be divided equally between defense and civilian programs, with $4 billion made in the current fiscal year that expires on 30 September and $8 billion made in fiscal year 2014.

Specifically, the 2011 Budget Control Act imposed a cap of $361 billion this year on "nonsecurity" expenditures, including all civilian research spending. The new law lowers that to $359 billion. Civilian research takes up roughly one-seventh of that amount.

The Obama administration has repeatedly said that it wants to protect research, but the decision on which programs to cut is left up to Congress. There is likely to be fierce fighting over how to allocate the reductions, and Republicans in the House of Representatives are also likely to push for additional spending cuts.

At the same time, President Barack Obama will also have the opportunity to shape the debate by exercising his veto threat. Last night, for example, he marked House passage of the legislation with a warning to Republicans that "we can't keep cutting things like basic research and new technology and still expect to succeed in a 21st century economy."

However, science lobbyists note that many other discretionary programs have already gone under the knife. And they predict that it will be an uphill battle to stave off cuts to research agencies like the National Institutes of Health (NIH) and the National Science Foundation (NSF).

Even so, the research community is relieved to have dodged the larger, automatic, and across-the-board cuts called for under the 2011 law. That mechanism, known as sequestration, would have required cutting $109 billion this year from both civilian and defense budgets as part of a 10-year, $1.2 trillion drop in federal spending. Agency officials had calculated that sequestration would have resulted in the loss of 2500 NIH grants and 1500 NSF grants in 2013 alone.

The new legislation pushes back the start of sequestration until 1 March. As before, it also allows Congress to avoid sequestration entirely if it can find another way to shrink spending by that amount. (The new sequestration figure is actually $1.176 trillion, with yesterday's legislation hacking $24 billion from the total after Congress found $12 billion in additional revenues to go with the $12 billion in promised savings.)