On January 1, 2013, Congress passed the American Taxpayer Relief Act of 2012 (H.R. 8) with broad bipartisan support. Passage of this legislation prevents the country from going over the “fiscal cliff”, a term widely used to describe the effects of a set of tax increases and spending cuts that were scheduled to go into effect on January 2, 2013.
H.R. 8 addresses the revenue side of the equation by raising tax levels for individuals earning more than $400,000 per year and families earning more than $450,000 per year. However, the issue of spending cuts remains unresolved. Congress delayed the onset of sequestration until March 1, 2013, but at that point, cuts of as much as 10% are expected to take effect on all federal programs, including those that fund research.
Over the next several months, Congress must address multiple major financial issues including raising the debt ceiling, providing relief for victims of Hurricane Sandy, completing the fiscal year (FY) 2013 appropriations bills, and what to do about sequestration. In addition to the broad implications of these issues will have for the nation as a whole, the courses of action Congress chooses will have a profound impact on research.
While Congress grapples with these financial issues, the National Institutes of Health continues to operate at FY 2012 levels, and is funding non-competing awards at 90% of the previously committed level. See this announcement for more information.