CSU Office of Federal Relations

Sequester Cuts Cemented in Final Spending Bill for FY13

March 25th, 2013

On March 21 the Congress passed and sent to the president HR 933, belatedly finalizing government spending allocations for fiscal year 2013 (FY13), which began last October 1. The measure averts a government shutdown and incorporates the once “unthinkable” sequester, an across-the-board cut of over 5% to most non-defense discretionary programs for FY13, and over 8% for defense discretionary programs. HR 933 is a hybrid that includes a “continuing resolution” for seven of the usual twelve annual appropriations bills, meaning it for the most part replicates funding levels from last year (FY12) before applying the across-the-board cut. The legislation contains updated appropriations levels for the other five bills (Agriculture; Commerce, Justice, Science; Defense; Homeland Security; and Military Construction, Veterans Affairs), but all of them are also subject to the sequester.

Because most higher education-related programs are forward funded, the full impact of these cuts will not be felt by students and institutions until the new academic year that begins this fall. While details of how the cuts will be allocated remain to be worked out, there will certainly be harm across the CSU, which anticipates losses exceeding $20 million in just this fiscal year. Although the Pell Grant program is exempt from sequestration, other essential student financial aid programs are not. At the CSU, Supplemental Educational Opportunity Grants (SEOG) and Work-Study will lose roughly $1.5 million, which equates to awards for more than 1400 students. TRIO and GEAR UP, vital K-12 pipeline programs, will be cut a combined $2.1 million, curtailing services to approximately 3300 students. Cuts to critical Department of Education Title III and Title V (e.g., Hispanic-serving and Strengthening Institutions) programs that assist first generation and under-represented minority students could see a reduction of half a million dollars across the CSU. Most research programs – in agencies like USDA, Department of Energy, the Defense department, to name a few – also face the sequester. HR 933 did slightly diminish the blow to the National Science Foundation (NSF) and National Institutes of Health (NIH) but the net result will still be fewer or smaller grants for their programs too. 

The Senate added a couple of last minute higher education-related amendments to HR 933. One precludes the Department of Defense from halting the Tuition Assistance Programs that support servicemember education, while the other limited the ability of the NSF to make grants for political science research.

These cuts come on top of severe cuts to many education programs adopted in 2011-12, which included the elimination of numerous programs, such as the “year round” Pell Grant program, plus cuts to many others (e.g., reductions to benefits in student loan programs which increased the cost of borrowing for many). Future prospects for CSU priority programs look grim absent a much broader political bargain that includes entitlement and tax reform. Otherwise, stringent caps on discretionary spending mandated by the Budget Control Act of 2011, a complicated package to temporarily raise the nation’s debt limit and reduce the federal deficit, will force student aid programs like the Pell Grant to compete for reduced funding with cancer research, job training and other labor, health and education programs in the next fiscal year and beyond.


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Last Updated: April 03, 2014