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Fiscal cliff could hurt University research funding

By Ben Atlas, Daily Staff Reporter
Published December 15, 2012

The effects of inaction in the halls of Congress could eventually be felt in classrooms, labs and libraries at the University.

With budget negotiations stalling in the nation's capital and the approaching threat of automatic spending cuts, often called the fiscal cliff, becoming more of a reality, some state legislators and University officials are considering how the school might be affected.

University President Mary Sue Coleman said in an Oct. 8 interview that the University is bracing itself for diminishing government funding.

"We are certainly preparing ourselves, and we have been working with all of our faculty (in case) there are significant decreases in research funding," Coleman said.

Coleman said it's difficult for the University to forecast how they would replace crucial government funding. While there are other avenues for additional revenue, she stressed that the federal government plays the most important role.

"It would be very difficult for private philanthropy to make up for the kind of investment that the U.S. government puts into basic research,” she said. “Industry can help a little bit, and we've seen some upticks ... but that tends to be very targeted to applied outcomes. The value of the federal government is that the federal government funds the basic research that is the beginning of all the others."

Research efforts have long been a cornerstone of the University, much of which has been funded with the federal government’s support. Last month, the National Science Foundation ranked the University first in research and development among the nation’s public universities for the third consecutive year, as well as ranking it second among all higher learning institutons.

Federal funds were responsible for 64.1 percent of the University’s research and development spending in the 2011 fiscal year, which totaled $1.28 billion.

Representative Jeff Irwin (D-Ann Arbor) said the fiscal cliff would result in large federal budget reductions across the board. Major sources of the University’s research funding such as the National Institute of Health, the Department of Defense and the Department of Energy could all see their budgets shrink, setting back the University’s research efforts.

Irwin suggested the cuts could eventually reach students' pockets with tuition increases.

$2 billion of the $49-billion state budget would be cut as a result of federal spending reductions. Pell Grant and Community Development Block Grant funding could be cut, making it more difficult to bear the cost of financial aid and scholarships for students with financial aid.

Irwin said the impact of the cutbacks would be felt gradually, as Congress still has time to “come to their senses” and revise the law after the Jan. 1 deadline passes.

“I’m not sure if it’s a ‘fiscal cliff’ as much as it is a fiscal slalom course,” he said. “It’s a pretty steep hill but it doesn’t drop off immediately.”

If lead policymakers reach a deal, Coleman said she hopes that research and education remain budget priorities.

"We have to get a budget together that can start to attack the deficit, but the deficit can't be the number one priority and let everything else go by the wayside,” Coleman said.