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Here's some "sky is falling!" that appears to presume one not read past the first paragraph:

U-M research funding up, but sequestration threatens budget, Forrest tells regents

Sounds dire!

Federal sequestration spending cuts could cost the [University of Michigan] research budget up to $40 million this year, harming graduate students, research scientists and others whose jobs rely on the funding, Vice President for Research Stephen Forrest told the Board of Regents on Thursday.

$40 million! That's a lot of pesos! We're doomed! Wait, how big is the research budget?

Funding from federal agencies provides 62 percent of U-M's research budget, which totaled $1.27 billion in the fiscal year that ended June 30, 2012. Sequestration cuts would seriously impact the university's ability to pay graduate-student researchers. Research scientists and engineers, postdoctoral researchers and administrative staff could be vulnerable as well.

So last fiscal year we got 62% of $1.27 billion from the feds, which works out to (grabs calculator) $787.4 million. Now it doesn't say if that $40 million cut is from that amount or from a different (presumably larger) amount we'd ordinarily be getting from Uncle Sugar this current year, but let's go with the worst-case scenario and say it's a $40 million cut from that $787.4 million. That works out to (grabs calculator... I majored in History for a reason!) just over a 5% cut. Not tiny, but far from armegeddon-scale. But apparently I'd be wrong...

Draconian cuts to the federal research budget would also damage this country's ability to compete globally, Forrest said.

"We live in a global economy with a growing number of strong international competitors," he said. "If we pull back now from investing in our future, we will lose ground that will be difficult, if not impossible, to regain.

"It would be a mistake to try to save our way out of these difficult economic times," Forrest said in the video. "Never has it been more important for Congress to sustain our investment in research — and even to expand it. It's the engine that drives our economy. Let's not let it run out of gas."

The horrors! A 5% haircut is the end of civilization as we know it! Keep in mind that's a worst-case scenario, it could be that the budget was going to go up by $40 million or more anyway so we could be breaking even or even getting more YOY but just less than "promised". In fact, that latter scenario seems highly likely to be the case:

In the fiscal year that ended June 30, funding from the National Science Foundation was up by 7.9 percent, and the Department of Energy increased its support by 8.6 percent. The National Aeronautics and Space Administration's investment rose by 15.3 percent, and the Department of Transportation increased its funding by 38.4 percent.

Funding from the Department of Defense grew by 9.5 percent, reversing a decline in the previous year. Support from the Department of Health and Human Services decreased 8.1 percent, in part due to a drop in American Recovery and Reinvestment Act (ARRA) funds.

Research grants and contracts from industry grew by 5.6 percent to $42.8 million, building on a 4 percent growth rate from the previous year.

Once again, only in government and academia are cuts to the growth rate deemed to be "draconian cuts" to the budget.
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