Life After Sequestration Not Really So Different

2/28/2013
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With the automatic, across-the-board spending cuts known as sequestration, Congress and the White House stuck to the doomsday template of federal budgeting, but the world after today’s deadline will not look so different, political observers say.

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“Sequestration is not public policy, it’s a threat we made to ourselves,” says Charles Wheelan ’88, a policy fellow with Dartmouth’s Nelson A. Rockefeller Center for Public Policy and the Social Sciences. “But it’s not a disaster. It’s not really a cliff. It takes effect slowly.”

The lead-up to the sequestration deadline has been marked by cries of alarm over calamities such as impending furloughs for tens of thousands of government workers, sidelined U.S. aircraft carriers, and reductions in supplemental food programs for the elderly. These predictions assume the across-the-board cuts would remain in place for many months. At the very least, government workers have a right to a 30-day notice, so no one is staying home Monday.

Federal budgeting is far more complicated than that, says Martha Austin, associate vice provost for government relations, who is monitoring the process for Dartmouth.

In fact, Congress never passed a budget for 2013, she says. The federal government has been funded by a series of continuing resolutions, the most recent of which expires on March 27. Most Congress watchers expect lawmakers to address the cuts in the March debate over keeping the government running, she says.

In the meantime, the agencies and institutions, states and cities that would be affected by the cuts have to plan for the worst case.

Sequestration and Higher Ed

For higher education, the main concerns are cuts to student financial aid and research funding, Austin says. Interim Provost Martin Wybourne and Austin have been working with the academic leadership on the potential impact on Dartmouth. Wybourne says he is preparing to address a possible downturn in research funding.

Although Pell Grants are exempt in the first year, the U.S. Department of Education says it will make fewer work study awards and will reduce supplemental grants next year if the cuts remain in place.

On the research side, granting agencies will have broad discretion, Austin says. If the cuts stand, fewer competitive awards could be offered, current grants might not be fully funded, and non-competitive continuation grants, which roll over every year, could be cut.

Or, says Austin, Congress could act in the next month to reverse some or all of the sequestration cuts. “The hope remains that something will happen to solve the problem prior to March 27,” she says.

The real danger in crisis budgeting is uncertainty, Wheelan says.

“My greater fear is it sends, yet one more time, a signal to the world, and in particular to the investors of the world, that the political process is dysfunctional,” Wheelan says. “That is more dangerous because that can be more precipitous in terms of the response it sets in motion.”

And forging compromise today appears more challenging than ever, he says.

“We’re caught in bad cycle where two parties are ideologically more extreme than they’ve been, and that feeds on itself. We’re missing the center.”