With ‘fiscal cliff’ looming, ORNL says it’s as well-prepared as it can be

As President Barack Obama and House Speaker John Boehner continue their high-stakes negotiations over tax revenues and spending cuts, officials at Oak Ridge National Laboratory say they have prepared as best they can for automatic spending cuts that could go into effect in January.

“We have been preparing for increased budget pressures for several years now and have taken a number of steps to reduce our costs, including workforce restructuring, benefits changes, reduction in energy consumption, and other operational costs,” ORNL Director Thom Mason said in a statement Monday. “Since we don’t know exactly how any cuts would be allocated by the various governments agencies that fund ORNL, we can’t really say with certainty what the impacts would be, other than to say we are as well-prepared for uncertainty as we can be.”

The across-the-board spending cuts—as well as tax increases—could go into effect after Jan. 1 if the White House, Senate Democrats, and House Republicans fail to reach a deal. It’s the so-called “fiscal cliff,” and it could lead to spending cuts of $110 billion in 2013 and more than $1 trillion over 10 years. Financing for most federal programs, including military and domestic programs, would be cut.

The National Nuclear Security Administration referred questions about funding for the Y-12 National Security Complex in Oak Ridge to the White House Office of Management and Budget. Y-12 is an NNSA site.

The OMB has prepared a report that says the automatic spending cuts, which are also known as sequestration, would result in a 9.4 percent reduction in spending for non-exempt discretionary defense activities and an 8.2 percent reduction in non-exempt non-defense discretionary funding.

NNSA defense programs could see cuts of $678 million in weapons activities, $216 million in nuclear nonproliferation, and $102 million in naval reactors, the report said.

Spending on defense environmental cleanup could be slashed by $472 million.

Meanwhile, funding for the U.S. Department of Energy’s science activities could be cut by $400 million, and energy efficiency and renewable energy programs could be reduced by $148 million. Funding for DOE’s nuclear energy activities could drop $63 million.

DOE and the NNSA, a separate DOE agency, have a number of operations and sites in Oak Ridge, including ORNL, Y-12, Oak Ridge Operations, East Tennessee Technology Park, and the Office of Scientific and Technical Information.

The OMB said bipartisan majorities in the U.S. House and Senate approved the sequestration in August 2011 as a mechanism to force Congress to act on further deficit reduction.

“The specter of harmful across-the-board cuts to defense and non-defense programs was intended to drive both sides to compromise,” the report said. “The sequestration itself was never intended to be implemented.”

Still, Obama and Boehner have disagreed on such issues as whether tax rates should rise on those with income of more than $400,000 or, alternatively, those with income of more than $1 million. It’s still not clear if a deal can be reached, but some analysts expect Congress and the White House to reach a last-minute deal.

The OMB said the estimates and classifications in its report are preliminary, and the actual results could vary based on changes in law and ongoing legal, budgetary, and technical analysis.

“However, the report leaves no question that the sequestration would be deeply destructive to national security, domestic investments, and core government functions,” the OMB said.

It said the sequestration would also impose cuts of 2 percent to Medicare, 7.6 percent to other non-exempt non-defense mandatory programs, and 10 percent to non-exempt defense mandatory programs.

U.S. Sen. Bob Corker, a Tennessee Republican, has said the fiscal cliff is the country’s best opportunity to finally enact meaningful fiscal reform.

“Kicking the can down the road—setting up a process for token deficit reduction today with the promise of more reforms later—is misguided and irresponsible and shows a total lack of courage,” he said.