While the government shutdown is officially behind us, a new pressing issue is causing fresh panic among many federal agencies, the impending implementation of sequestration.Sequestrations are mandatory budget cuts that will decrease funding to numerous government agencies and initiatives. Under the Budget Control Act of 2011, 1.2 trillion dollars in automatic spending cuts are set to begin in January and continue over the next 10 years. Sequestrations are expected to have a devastating effect on federal research and development programs. The sequester will mean an automatic 6.4% cut to program funding levels in 2013 for most NDD programs including the National Science Foundation (NSF). These cuts will be “across-the-board,” with no agency able to control how the sequester impacts individual programs. NSF could lose a total of $2.5 billion in funding and there is little information on how the cuts will directly affect each program.
Sequestration will likely have the most substantial impact on energy efficiency initiatives planned by the Department of Energy (DOE), as it would impose an 8.2% reduction. This would decrease the DOE’s funding for the Office of Energy Efficiency and Renewable Energy by $148 million. Budget cuts would also apply for programs such as Energy Star, Federal Energy Management, the State Energy Program, and the Weatherization Assistance Program. By decreasing funding to these programs, the US could potentially damage its economy. Benefits from investments in energy efficiency programs are proven and extensive, ranging from creating jobs to balancing budgets and saving money. Over 830,000 jobs were created in the energy and resource efficiency segment of the economy in 2010, according to a green jobs assessment by the Brookings Institute. This is an increase from the 675,000 jobs generated in 2003, suggesting that with sufficient support, job creation in energy efficiency will continue to grow. These gains, however, will be more difficult to achieve if Congress fails to avert the sequestration. In addition, Democrats on the House Appropriations Committee have raised concerns about cuts to EERE, saying that reducing the budget for research and development would result in over a hundred layoffs across the country at the national labs. Energy Secretary Steven Chu is warning that funding reductions under the budget sequestration will disrupt and delay a plethora of clean energy programs, slowing initiatives to decrease clean energy manufacturing costs and scaling back the Energy Department's Advanced Research Projects Agency for Energy (ARPA-E). Chu also argued that budget cuts at ARPA-E would slow progress "toward a transformed 21st Century energy sector."
Sequestrations are supposed to take effect by January 15th, but Democrats are determined to fight mandatory spending cuts that would substantially decrease R&D funding. They've conceded that the level of deficit reduction mandated by sequestration must remain in place, but are now proposing that the federal agencies receive more discretion to implement the sequestration. Democrats are also hoping to redirect cuts by reducing other programs such as farm subsidies and creating a minor increase in revenue by closing tax loopholes that benefit the wealthy. Although Republicans remain opposed to a tax increase, they appear to be very concerned about the possible consequences of large mandatory budget cuts. Recently, Republicans on the House Armed Services Committee explained their opposition to continued sequestration. They described the cuts in dire terms, noting that further sequestration will force 100,000 soldiers, Marines, sailors, and airmen out of a job. It appears that both parties are interested in revising the sequestration plan, and we can expect them to negotiate more as the January deadline approaches.