By Eugenie Samuel Reich of Nature magazine
The US Treasury has warned that if the US debt ceiling, the amount that the country may legally borrow, is not raised by 2 August, the country will not legally be able to pay all its obligations. Republican members of Congress have demanded cuts to the budget as a condition of agreeing to raise the debt ceiling and avoid a default. Both Republican and Democratic proposals would cut more than US$1 trillion in spending over a decade, amounting to a budget reduction of at least $100 billion per year. Nature examines how this might affect the scientific community.
Which areas would bear the brunt of the cuts?
Republicans have made it clear that they will not cut defense spending, and Democrats are keen to protect social security and health-care programs such as Medicare and Medicaid. Thus, the cuts are likely to fall on the roughly $600-billion discretionary, domestic budget, which includes funding for scientific agencies including the National Institutes of Health (NIH), the National Science Foundation (NSF) and the Department of Energy's Office of Science. A reduction of $100 billion, applied across the board, would result in a 17% cut to such agencies.
What is the worse-case scenario for science?
The least-favorable outcome is that a deal to cut $100 billion per year is reached, and that it starts in fiscal year 2012. In that case, it might be hard for legislators to re-evaluate the 2012 appropriations bills program by program, given that several have already been passed by the House of Representatives. It would be more likely that they would apply the reduction roughly equally to all programs. That would result in cuts of more than $5 billion to the NIH, $1 billion to the NSF (which is already under stress because stimulus grants awarded in 2009 are about to run out) and $800 million to the Office of Science, enough to force the closure of one national lab or cuts in personnel at many.
What is the best-case scenario?
If a deal to cut $100 billion is not reached this year, and the full force of cuts is applied only in fiscal year 2013, then science might fare better. Advocates for science would have an opportunity to make their case to both parties, which generally wish to be seen to be protecting science as an investment in future prosperity. Even if a deal is reached for this year, it is still possible that science will be protected. On 13 July, for example, the Republican-controlled House of Representatives's subcommittee for commerce, justice and science sent a bill to the House floor that maintains current funding for the NSF, even though the overall allocation was cut 6%. That reflects support for science from everyone.
What if no deal is reached?
If no deal is reached, President Barack Obama could unilaterally raise the debt ceiling, which would be likely to prompt legal challenges and a political row, but would remove the threat of default. House Republicans could still refuse to pass the budget for fiscal year 2012 unless cuts are implemented, and threaten a government shutdown (as happened with the fiscal year 2011 budget earlier this year). Alternatively, the White House and Congress could reach an interim agreement to raise the debt ceiling for a short time--a month, for example--while they continue to work on a final deal.
What if there is a default?
The short answer is that nobody knows, but there would probably be widespread economic chaos that would affect everybody, including scientists. The US Treasury would have to prioritize which bills to pay, but because scientific funding comes directly through appropriations, rather than borrowing, it seems unlikely that it would be directly affected by unpaid bills.
This article is reproduced with permission from the magazine Nature. The article was first published on July 28, 2011.