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Federal deficit impacts Emory's research mission

By Cameron Taylor, Washington representative | Emory Report | May 16, 2012

The budget challenges facing the federal government are enormous. Current projections are that the federal deficit will spike to $1.65 trillion in the current fiscal year, the largest dollar amount ever, putting significant pressure on both political parties to tackle the growing level of unsustainable debt. 

However, efforts to reduce spending, including mandated across the board cuts, known as "sequestration," which are scheduled to go into effect in January 2013, pose a very serious threat to the National Institutes of Health (NIH). NIH is the leading funding source for biomedical research at Emory, one of Emory's key missions.

The health benefits of the NIH research support are clear: Investment in NIH directly leads to better medicines, procedures, treatments, equipment and delivery systems to prevent and cure disease. The resulting advances in areas like heart disease and cancer translate into a $500 billion in health care savings annually. 

Additionally, NIH plays a notable role in helping to maintain American competitiveness, which is especially critical as other countries like Japan invest heavily in research. 

Finally, NIH supports nearly half a million jobs across the country and remains the largest funder of life sciences research in the United States. More than 80 percent of its budget directly funds "extramural" research performed by 325,000 scientists at more than 3,000 institutions across the nation.

The federal budget is now $3.8 trillion.  Nearly 83 percent of that budget goes either to mandatory spending (Medicare, Medicaid and Social Security), defense spending, or interest on the national debt.  The remaining 17 percent, called "non-defense discretionary funding," includes many programs critical to Emory's missions, including all research and student aid funding.

It is this relatively small pot of money that is likely to be squeezed hardest by sequestration, estimated to be a cut as much as 9.1 percent from FY2012 funding levels.

The across-the-board spending cut was triggered when the Joint Select Committee on Deficit Reduction failed to reach a long-term spending agreement last November. 

While there is still time for Congress to halt the sequester and pass targeted spending cuts, the question is whether partisan politics will allow such an agreement to advance.

Of the $463 million awarded to Georgia by the NIH in 2011 for medical research, Emory received $318 million. In March, NIH Director Francis Collins told a Senate Appropriations Subcommittee that sequestration would be "devastating" for NIH.  A cut of 7.8 percent, which is conservative, would slash about $2.4 billion from NIH's budget, translating into 2,300 fewer grant awards to all applicants (not just Emory) in 2013. 

A 9.1 percent spending cut would mean Georgia would lose almost $51 million.  The direct impact on Emory of this cut would be even more severe. Simply put, Emory's cancer research, influenza vaccine research, and many other critical research initiatives would be impacted.  

In addition to changing lives, NIH is a powerhouse when it comes to economic activity in Georgia and at Emory, both in the number of jobs it supports as well as overall economic activity. In Georgia, NIH funding directly or indirectly supports 10,963 jobs statewide. Every $1 of NIH funding translates into $2.21 to the economy.

If you think about the average research lab at Emory, there are people working at the lab; there are spin-off companies that are created by that lab; there are biotech and pharmaceutical companies that are taking those discoveries and translating them into diagnostics, medicines or medical devices; and there are vendors that are supplying that lab.

All of these long-term economic effects that result from the dynamic interplay between NIH spending and the private sector as discoveries advance toward the commercialization of new medicines, tests, devices and procedures are threatened by the federal funding deficit we now face.

While Emory has its own interests regarding NIH, the issue is much larger than our institution. It is about international competition, the pipeline for our future scientific working base—our young researchers, and reducing the societal burdens of illness and disability.  It is an issue of investing in our nation's future.