When the federal government reopened on Oct. 17, it concluded the second-longest government shutdown in the nation’s history. Emory's federal research partners are slowly resuming operations, rescheduling application due dates and peer review meetings. While the current congressional crisis has ended, a series of upcoming fiscal deadlines, coupled with deeply held differences in political ideology, has great potential to upend the nation’s fragile economy.

"Emory values its relationship with the federal government, which is a critical partner in our mission of teaching, research and patient care," says President James Wagner.

For that reason, Emory is greatly concerned about the long-term consequences of continued federal funding reductions, particularly from sequestration, the automatic, across-the-board cuts in federal funding that took effect in March of this year.  Perhaps as great a concern:  the political clashes that cut off funding mid-stream, potentially impacting life-saving research, young scientific careers, and any Emory student who relies on federal financial aid.  

What happens next?  

In the next few months, new fiscal flashpoints will threaten funding to programs upon which Emory depends:

• By Dec. 13, a budget conference is tasked with resolving differences in the House and Senate budget resolutions passed earlier this year.  

• Congress must then agree on how to fund the government for the remainder of fiscal year 2014, which is currently funded through Jan. 15. 

• Finally, the nation’s debt ceiling will need to be lifted by Feb. 7, although the Treasury Department will be able to use extraordinary accounting measures to extend this date. 

There are 83 days until federal funding runs out under the current plan, with the potential for another congressional standoff.  

What does this mean for Emory?  

Declining federal support of research over the last six years and now sequestration means this blunt across-the board cut could lower government spending by approximately $1.1 trillion from 2013 to 2021.  In 2013, the sequester cuts translated into a funding loss of $17.7 million for Emory’s researchers, nearly $7 million in Medicare provider cuts to Emory physicians, and lost financial aid to Emory’s students equating to approximately 100 fewer work-study awards and approximately 30 fewer Supplemental Educational Opportunity Grants.  In 2014, the sequester’s impact on Emory will grow to an estimated $40.6 million.

"Sequestration, along with other federal budget uncertainty, is a serious concern for Emory," notes Wagner. 

What is Emory doing about it?

"Emory has been a leader in advocating for the need for a balanced and long-term approach that puts all of the fiscal issues on the table, including defense and non-defense discretionary, entitlement spending, and revenue reform," says Wagner.

Since September 2011, Wagner has joined his presidential colleagues four times on letters to Capitol Hill and the Administration advocating for a serious and thoughtful discussion about a comprehensive deficit reduction plan that includes entitlement and tax reform.  

"Over the last few years, our meetings on Capitol Hill have focused on this topic. As Congress and the Administration address these issues, we strongly support the continued funding of long-term investments in our nation’s research and higher education infrastructure. Such commitments must be part of the equation for sustainable economic and job growth," Wagner says.  

The group has pointed to the bipartisan Bowles-Simpson National Commission on Fiscal Responsibility and Reform, which recognizes that a deficit plan should: “… cut red tape and unproductive government spending that hinders job creation and growth. At the same time, we must invest in education, infrastructure, and high-value research and development to help our economy grow, keep us globally competitive, and make it easier for businesses to create jobs.”    

"We have drawn attention to a new kind of deficit facing our nation: an innovation deficit," Wagner says, resulting from the combination of eroding federal investments in research and higher education, additional cuts due to sequestration, and the enormous resources other nations are pouring into these areas. He adds, "We have called on policy makers to recommit to strong and sustained investments in research and education through, for example, reauthorization of the America COMPETES Act."  

Emory has worked to support its members of Congress who have fought for a comprehensive budget framework.  In December 2012, Ben Johnson, chair of Emory’s Board of Trustees, wrote a letter to the editor calling attention to the dangers of the nation’s “kick the can” approach and commending Sen. Saxby Chambliss (R-Ga.) for his willingness to be a leader in the conversation about how to reduce the federal deficit and avoid the so-called fiscal cliff.  This theme continued when Emory's Public Policy Advisory Group Trustees made the rounds on Capitol Hill in April.  

Throughout this year, Sen. Johnny Isakson (R-Ga.) has led a similar effort in the Senate to reduce the deficit, avoid the continued visits to the fiscal cliff, and develop long-term solutions to the fiscal challenges facing the nation.  "Emory will support his efforts in any way we can," Wagner says.  

Emory has worked closely with the Georgia Research Alliance (GRA), a public/private partnership that has leveraged $565 million of state funding into $2.6 billion of federal and private investment, accelerating the formation and launch of university-based startups and advancing to market over 250 university discoveries with commercialization grants.  The GRA hosted a Georgia congressional delegation dinner in July, attended by 12 of the 16 delegation members, which highlighted the state's outstanding research enterprise and the critical university-economic development link.  

Wagner notes, "These important advocacy efforts aside, we still have much to do.  Emory will continue to share real-time, real-life impacts that federal budget decisions are having on our institution, like WHSC CEO Wright Caughman did in a letter to our delegation last week." 

Emory finance and research administrators will be making the rounds on Capitol Hill in another education/advocacy push; and the University will embark on the next stage of its GRA advocacy effort to bring the challenges home for legislators.

Wagner says Emory will work with GRA colleagues to look for ways to push decision-makers to pay attention to the perils of eroding federal funding support for research and higher education.  "On our staff and member campus tours, we will continue to advocate that the hard choices be made to address our nation’s deficit," he says, looking for new opportunities with new partners, like industry, to drive the message home for legislators.  

"There is no doubt that it will be challenging, but compromise must occur for the sake of this nation. Everything needs to be on the table:  sequestration, entitlements, defense and non-defense discretionary spending, and revenue policies," says Wagner. "Our goal should be enabling long-term economic growth. Research and higher education investment will propel the nation toward that goal."