The Business-Higher Education Forum Urges Congress to Avoid Sequestration

Washington (February 21, 2013) —The members of the Business-Higher Education Forum (BHEF) have appealed to President Obama and the leadership of the U.S. Congress to avert sequestration, the across-the-board federal spending cuts set to take effect March 1. Making the case that sequestration would harm the economy, the workforce, and higher education, in a letter signed by members of BHEF's Executive Committee, BHEF called for a reasoned approach to balanced, long-term deficit reduction that preserves investments in research and education, particularly student aid, and spurs long-term innovation and economic growth.

In its current incarnation, sequestration would cause harm to the still-fragile American economy, cutting economic growth in half and pushing the economy back into recession, costing still more jobs, and increasing the deficit. Additionally, across-the-board cuts would significantly reduce federal research budgets, hindering the innovation that is so critical to American economic development. The U.S. share of global research funding has declined 18 percent over the past decade and sequestration would reduce federal research finding by another 5.1 percent. To maintain competitiveness in technology and innovation, the government must make more selective cuts and protect research funding.

Furthermore, sequestration would inhibit growth in STEM education and workforce outcomes that rely on federal research funding and student aid and that lead, ultimately, to innovation and a more competitive economy. Finally, indiscriminate cuts would lead to a reduction in federal Title VI student aid programs, costing students an average of $700 each for the 2013-14 academic year and eventually impacting the Pell Grant program.

"Higher Education is the pipeline feeding America's businesses with the manpower and advanced research that drives our economy. Sequestration, as it is currently structured, will hinder both," said Wes Bush, Northrop Grumman chairman, CEO and president, and BHEF board chair. "Sequestration will result in students deferring college as financial aid is severed, and businesses delaying hiring as the economy contracts. In its past, America has met challenges just as dire and has emerged the stronger for it. We urge the president and Congress to come to an agreement on a path that resolves sequestration through a reasoned, balanced approach."

Barbara R. Snyder, the president of Case Western Reserve University and BHEF vice chair, agreed. "Sequestration will weaken our competitiveness as a nation and limit our ability to stay on the cutting edge of technology and innovation advancements which, in turn, will inhibit our growth. Higher education strives to prepare students who will be successful members of our nation's global workforce. It is counter-intuitive to lower the funding which provides the tools that help our graduates become professionals poised to thrive in today's global economic market."

"BHEF's members provide the single collective voice from a wide range of communities that recognize and understand the impact sequestration will bring," Brian Fitzgerald, CEO of BHEF concluded. "As leaders from across industry sectors and our nation's preeminent colleges and universities, together, they agree: Sequestration has the potential to cut off the lifeblood of American innovation to the workforce and cripple our ability to compete."