Health Care Research Now Braces for Cuts
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The Fiscal Times
February 6, 2013

Industry and consumer advocates of health and science research today warned that an anticipated $1.6 billion cut in the budget for the National Institutes of Health (NIH) would seriously hamper cancer, heart, AIDS and other critical research, while also adding to the nation’s economic and unemployment woes.

At the current funding levels, NIH supports roughly 402,000 jobs and $57.8 billion of economic growth or output. A 5.1 percent sequester would cut the total number of jobs supported by NIH by more than 20,500 and reduce economic activity by $3 billion, according to a new analysis by United for Medical Research, a coalition of research industry advocates and grant recipients.

California would be the biggest loser, as 3,028 jobs would vanish, the study said – while Massachusetts would lose 1,736 jobs, Pennsylvania 1,209 and New York 1,645.

Sue Nelson, vice president for federal advocacy at the American Heart Association and a former Senate Budget Committee official, said that the cuts in NIH funding would have an adverse ripple effect throughout the economy and put the brakes on vital research over the coming years.

“A lot of companies manufacture equipment they sell to researchers,” Nelson told The Fiscal Times. “A research lab is like a small business. We employ everyone from the highest level researchers to persons who clean the test tubes. And then we all go out for lunch and buy from the corner lunch stand. So when a lab gets cut, it’s like closing down a small business, and that’s what’s happening all across the country.”

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Others speculate that major domestic agencies have already quietly followed the lead of the Pentagon by scaling back their operations in anticipation of sequestration. Richard Kogan, a budget expert at the liberal Center on Budget and Policy Priorities, said that “in a macro economic sense,” much of the domestic spending cuts have already taken place.

“We saw what happened to the economy in the fourth quarter [when GDP contracted slightly]    and the reason it happened largely was [because] the Defense Department started planning for the sequestration even before it occurred.”

“Certainly it’s better to spread the cut over a whole year than to run full speed ahead until the sequestration date and then suddenly drop in your tracks,” Kogan added. “What that means is that – de facto though not compelled to by law – the Defense Department and probably quite a number of domestic agencies were already partially slowing down consistent with the sequestration. So that when it hits on March 1, it’s merely a formality. They keep going at the slow pace they already are going at. In other words, they have already taken the hit.”

Top officials at several major departments told Politico they were instructed by the White House not to talk about the impending sequester cuts unless their talking points were first cleared by the Office of Management and Budget. Presidential advisers have told cabinet members that the White House was taking the lead on message operations on sequestration, according to Politico.

Tim Kauffman, a spokesman for the AFGE, said that “we haven’t seen as much” preparation for sequestration by domestic departments and agencies as they have seen at the Pentagon. “However, I think it’s just a matter of time before they start coming out with similar directives,” he said.

Washington Editor and D.C. Bureau Chief Eric Pianin is a veteran journalist who has covered the federal government, congressional budget and tax issues, and national politics. He spent over 25 years at The Washington Post.