WASHINGTON — Furlough notices began arriving at federal agencies on Friday as the government prepared to cope with automatic spending cuts required by the so-called sequester, which went into effect hours after President Obama and Republican leaders held another fruitless session at the White House.
The prospect of absorbing $85 billion in reductions caused waves of anxiety across the country, even though much of the sequester’s impact will not be felt for weeks — and will be felt in disproportionate ways — from classrooms to laboratories to military bases.
In Massachusetts, university researchers were warned that their grants may be cut midway through their projects, and that labs may have to let workers go. Hundreds of medical device companies are bracing for a much longer wait for their products to be approved for market. And defense contractors have begun laying off employees, freezing salaries, and sidelining new projects.
Obama said during a White House press conference that he can’t force Republicans to come to the negotiating table. Mixing elements from Star Wars and Star Trek, the president said he couldn’t “do a Jedi mind meld with these folks and convince them to do what’s right.”
“I’m not a dictator. I’m the president,” Obama said. “[Sequestration] is happening because of a choice that Republicans in Congress have made. They’ve allowed these cuts to happen because they refuse to budge on closing a single wasteful loophole to help reduce the deficit.”
House Speaker John Boehner had left the White House just moments before Obama took the lectern, and like earlier in the week, put the onus on the president and Senate Democrats to replace the spending cuts.
“The president got his tax hikes on Jan. 1,” the Ohio Republican said, referring to part of the “fiscal cliff” deal. “The discussion about revenue, in my view, is over.”
A repeal of the sequester — in the event Congress and the president compromise on something to replace it with — appears to be unlikely given the longstanding struggle between Democrats and Republicans to agree on a larger package of tax and entitlement reforms, analysts said.
“There’s going to be a lot of kabuki theater and discussion, but until that basic framework has been agreed to, I wouldn’t count on it happening this year,” said Frederick Isasi, vice president of health policy for The Advisory Board Company, a health care advisory firm in Washington.
In the meantime, the sequester’s impact will slowly be felt across Massachusetts.
Researchers in Boston's teaching hospitals and universities are awaiting word from the National Institutes of Health on if, how, and when their work will be affected.
“What they’ve said is even if a grant has been approved, it will be reduced,” said John Erwin, executive director of the Conference of Boston Teaching Hospitals. “Researchers are obviously scared. I doubt projects would come to a halt in the next six months, but I expect universities will have to consider laying people off.”
Robert Coughlin, president and chief executive of the Massachusetts Biotechnology Council, said NIH cuts would disproportionately damage Massachusetts because it receives twice the funding per capita than other states. The result could be “catastrophic” for the state’s economic future because “it’s that research that is the pipeline for startups and new companies.”
Alan Garber, Harvard provost, said that the uncertainty has faculty reluctant to hire staff for their labs. Some researchers felt pressure to spend their funds more quickly, fearing that federal agencies may take it back. And some of the university’s most successful researchers have not had their grants renewed because of tighter funding.
“We’re helping our faculty plan for this but I doubt there are any universities with sufficient resources to keep their faculty whole when federal funding gets cut,” Garber said.
Harvard is making plans to seek more foundation and industry funding as a temporary patch, but Garber said no one expects private funders to support the kinds of basic science research, such as the fundamental mechanisms of disease, that the federal government pays for.
In addition to research, Massachusetts’ medical device industry will also be hit. The Food and Drug Administration’s Center for Devices and Radiological Health is projected to lose $17 million under sequestration, including about $3 million in new user fees that industry pays to expedite product review, said Tom Sommer, president of MassMEDIC. The FDA has said it would cut jobs or furlough employees as a result.
That will translate into delays in product approval, meaning companies will be hampered from bringing new medical devices to the market and patients will be denied timely access to new products, Sommer said.
Federal agencies expect to furlough up to 1 million employees for intermittent periods as a result of the budget cuts. At least 750,000 of those will be civilian Pentagon workers, 7,000 of whom hail from Massachusetts, according to the White House. Furlough notices have begun arriving, giving federal employees 30 days’ notice to prepare for reduced pay. The Department of Justice has notified some US attorneys of up to 14 days of unpaid leave through September.
“We recognize the difficult personal financial implications of any furlough, no matter how limited its length,” one letter said. “Should additional furlough days become necessary, you will receive another employee notice.”
Jonathan Kreisberg, regional director of the National Labor Relations Board, said all 60 workers in his New England region’s Boston and Hartford offices received furlough letters. But the effect of the furloughs — as many as 22 work days through September — is still unknown, as officials at the national level have not decided how to implement them.
Jeff Frankel, a professor of capital formation and growth at the Harvard Kennedy School, said the sequester doesn’t even deal with one of the major elements of the budget. The sensible thing to do, he said, is to cut the costs of entitlement programs such as Social Security, combined with smaller measures to raise tax revenues, requiring Democrats and Republicans to compromise.
But “every politician, Republican and Democrat, is afraid to come out and make specific proposals to cut Medicare and Social Security,” Frankel said. “That is what we should do, solve the long-term problem, and then we could cancel sequestration and not have to cut discretionary spending at all.”
Obama said yesterday he would be willing to challenge members of his party who don’t want to touch entitlements.
“I’m prepared to take on the problem where it exists on entitlements and do some things that my own party really doesn’t like if it’s part of a package of sensible deficit reduction,” Obama said.
The White House and Congress are now focused on the next potential Capitol Hill crisis: March 27, when the federal government is slated to run out of cash. The turnaround will leave members of Congress with little time to catch their breath, but Boehner said House Republicans are set to move ahead next week on a plan to fund the government through the end of the fiscal year.
Pelosi, the top Democrat in the House, said she is hoping that the parties can compromise in the days ahead.
“To govern is to choose,” Pelosi said. “Certainly, we don’t want a shutdown of government.”