Unless Congress acts, the mandatory budget cuts ($120 billion per year for 10 years, or $1.2 trillion dollars) enacted by the Budget Control Act of 2011, commonly called the sequester, will take effect March 1, with far-ranging effects across many government agencies and to our great state of Ohio.
Among the federal-government agencies affected would be the National Institutes of Health (NIH), whose $31 billion budget would be cut by $2.5 billion. Roughly 95 percent of the NIH budget is either distributed to universities, research institutes and/or small businesses ($26 billion) or used by NIH research centers ($3.4 billion) to seed new biomedical research around the country.
These investments have led directly to better outcomes for cancer patients and increased the effectiveness of the treatments we have for HIV, influenza, diabetes, obesity and Alzheimer’s disease, in addition to hundreds of other diseases and disorders that affect millions of Americans. NIH funds also pay for clinical trials which help test and optimize new drugs and treatment regimens.
In 2012, Ohio was home to five of the nation’s top 75 research institutions and received over $661 million from 1,643 individual grants funding research at both academic institutions and small businesses. While each grant is different, the average award supports three to four employees. This large investment in salaries gives NIH funding an outsized economic effect, with each dollar of funding generating about $2.21 in economic activity.
If the sequester is enacted, the NIH’s overall budget will be cut by 8.2 percent, which would cost Ohio institutions and small businesses an estimated $54 million. That’s an economic impact of $119 million and about 475 jobs in 2013.
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