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OMB Releases Report on Impact of Sequestration: $2.5 Billion NIH Cut

Legislative Update
September 14, 2012

Today, the Office of Management and Budget (OMB) issued the report mandated by the Sequestration Transparency Act [STA, P.L. 112-155) on the impact of the sequester—the mandatory cuts to defense and nondefense discretionary spending scheduled to take effect on January 2, 2013. OMB notes that the estimates are preliminary and “if sequestration were to occur, the actual results would differ based on changes in law and ongoing legal, budgetary, and technical analysis.”

Under the assumptions required by the STA, the sequestration would result in a 9.4 percent reduction in non-exempt defense discretionary funding and an 8.2 percent reduction in non-exempt nondefense discretionary funding. The sequestration would also impose cuts of 2.0 percent to Medicare, 7.6 percent to other non-exempt nondefense mandatory programs, and 10.0 percent to non-exempt defense mandatory programs.

For NIH, the report indicates that $30.711 billion would be subject to the 8.2 percent sequester, equal to $2.518 billion, and an additional $150 million in mandatory budget authority (for diabetes research) would be subject to a 7.6 percent cut, equal to $11 million. The total cut to NIH would equal $2.529 billion. In discussing the impact of the sequester, OMB notes, “The National Institutes of Health would have to halt or curtail scientific research, including needed research into cancer and childhood diseases.” Previously, the Congressional Budget Office (CBO) and a report from the Senate Labor, Health and Human Services, and Education (LHHS) Appropriations Subcommittee had estimated the impact on NIH as $2.4 billion in cuts, which NIH Director Francis Collins, M.D., Ph.D. has called devastating, especially for new and competing grants. This report also estimated that sequestration would reduce National Eye Institute (NEI) funding by $57.6 million from its FY2012 level of $702.7 million level.

NAEVR and ARVO joined nearly 3,000 other organizations from the nondefense discretionary community as signatories on a July 12 NDD Coalition letter to Congress and the Administration urging leaders to avert sequestration by adopting a “balanced approach to deficit reduction that does not include further cuts to NDD programs.” NAEVR has also organized the vision research community to email letters to their Members of Congress urging them to avoid sequestration.