Illinois' leading research universities and hospitals stand to lose nearly $40 million in funding from the National Institute of Health (NIH) as a result of the sequestration budget cuts that take hold today, U.S. Senator Dick Durbin (D-IL) said at a news conference at Northwestern University Feinberg School of Medicine. Illinois received a total of $746 million in NIH funding last year.
"Sequestration was meant as a budget threat, not a budget strategy, and the cuts to NIH show why that's the case," Durbin said. "As a member of the Senate's Gang of Eight and the Simpson-Bowles Commission, I've spent much of the last two years working across party lines to find thoughtful solutions to our country's fiscal problems. I voted for the Simpson-Bowles plan, despite the objections of many in my party, because I thought it was the right thing to do. I believe everything should be on the table -- revenue, spending cuts and even entitlement reforms. The point we've reached today is a budgetary perfect storm of our own creation -- and the collateral damage is painfully obvious."
In a matter of months, sequestration will cut NIH funding by $1.6 billion across the nation, resulting in the loss of over 20,000 jobs and causing a ripple effect that weakens local economies. As the 10th largest recipient of NIH dollars, Illinois stands to lose roughly $38 million in NIH funding. Those cuts will result in the elimination of an estimated 727 jobs.
At Northwestern University alone, 3,200 faculty, staff and trainee jobs rely on NIH grants. Sequestration will mean the loss of $11 million of the roughly $217 million supporting those jobs. Many of the projects that count on steady funding streams may be suspended or slowed significantly.
If its budget is cut, NIH will not offer hundreds of awards and could reduce some of those that have already been announced, dramatically slowing the development of new forms of care. Research and clinical trials that have already started are less likely to be given funding to continue, which could result in layoffs and the termination or suspension of related projects.
University presidents have expressed concern that cuts could push elite faculty members to seek employment in countries currently investing in medical research and dissuade young scientists from pursuing careers in research, threatening the United States' status as a leader in bio-medical research and its comparative advantage in the sciences.
The NIH cutbacks will take an economic toll beyond their effects on the medical community. In Illinois, every $1 invested in medical research stimulates $2.43 in business activity, including support staff, supplies, food services, and building development, according to a Families USA study. In 2007, the most recent year for which data is available, NIH funding generated $1.8 billion dollars of business activity in Illinois.
"Sequestration will pull the rug out from under the doctors and scientists whose hard work and innovation have made America a leader in bio-medical research," Durbin said. "The research funded by NIH fuels the new ideas and technologies that grow our economy, strengthen our national security and secure America's place as a leader in biomedical innovation in the 21st century. Those cuts don't make sense -- for Illinois or for our nation."
Earlier this week, Senate Democrats introduced a bill that would replace sequestration through 2013, but it failed to win Senate approval. The American Family Economic Protection Act calls for targeted cuts to wasteful spending including direct payments in agricultural programs -- cuts that won bipartisan support in last year's farm bill -- and smart cuts to defense. Those reductions would be matched by additional revenue raised through the institution of the "Buffet Rule," which would ensure that millionaires and billionaires no longer pay a lower tax rate than the people who work for them, and the closing of tax loopholes for companies that ship jobs overseas and oil corporations making windfall profits.
House Republicans have downplayed the impact of the sequester and chosen not to engage in any negotiations to prevent it from taking effect.
In the coming weeks, Senate Democrats will unveil a fiscal year 2013 budget that lays out their priorities and, in late March, the Continuing Resolution funding the federal government will expire, likely forcing another showdown over the nation's finances and providing the next opportunity for a bipartisan compromise that could move the country forward.
"This is no way to run a government and no way to run a country," Durbin said. "I implore leaders from both sides of the aisle: don't wash your hands of this fight. We were sent to Washington to come together and solve our country's problems. It's time we did so."