Sequestration Order for Fiscal Year 2026 Pursuant to Section 251A of the Balanced Budget and Emergency Deficit Control Act, As Amended

5/30/2025

Presidential Memoranda

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Action Summary

Sequestration Order: Implements a spending reduction for fiscal year 2026 based on Section 251A of the Balanced Budget and Emergency Deficit Control Act.
Effective Date: Directs sequestration to be applied on October 1, 2025.
Budgetary Impact: Mandates reduction of direct spending budgetary resources in every non-exempt account by an amount determined by the Office of Management and Budget.
Compliance: All sequestrations must adhere strictly to Section 251A requirements and the OMB’s specifications as outlined in its May 30, 2025 report.
Issuance Date: May 30, 2025.

Risks & Considerations

The sequestration order mandates reductions in direct spending budgetary resources for fiscal year 2026, which could significantly impact federal funding for educational institutions, including Vanderbilt University.
Vanderbilt’s reliance on federal education funds, as noted in the Information Marketplace Pillar, makes it vulnerable to budget cuts, potentially affecting research funding, scholarships, and operational budgets.
There is a risk that reduced federal funding could lead to increased competition for private grants and other funding sources, necessitating strategic adjustments in Vanderbilt’s funding acquisition strategies.
The order may also impact federally funded programs and initiatives at Vanderbilt, requiring the university to reassess its financial planning and resource allocation to mitigate potential shortfalls.

Impacted Programs

Research Programs at Vanderbilt that rely on federal grants may face funding challenges, potentially affecting ongoing and future research projects.
The Financial Aid Office might need to explore alternative funding sources to maintain scholarship and financial aid offerings for students.
Graduate Programs with a significant number of international students could be impacted if federal funding cuts affect visa and immigration support services.
The Office of Sponsored Programs may need to increase efforts in securing private and alternative funding to offset potential federal budget reductions.

Financial Impact

The sequestration order could lead to a decrease in federal funding for Vanderbilt, affecting its overall budget and financial stability.
Vanderbilt may need to adjust its financial strategies, including cost-cutting measures and seeking new revenue streams, to address potential funding gaps.
There could be increased pressure on Vanderbilt to enhance its fundraising efforts and strengthen partnerships with private sector entities to secure additional financial support.
The university might experience changes in its financial aid distribution, potentially impacting student enrollment and retention rates.

Relevance Score: 5 (The sequestration order presents critical risks involving legal or regulatory issues that could significantly impact Vanderbilt’s funding and operations.)

Key Actions

Vanderbilt’s Financial Planning Office should conduct a thorough review of the university’s budget to identify areas that may be impacted by the sequestration order. This will help in anticipating potential funding cuts and preparing contingency plans to mitigate financial risks.
The Office of Federal Relations should engage with policymakers and the Office of Management and Budget to gain insights into the specific budget accounts that will be affected. This proactive approach can help Vanderbilt advocate for its interests and potentially influence decisions that may impact its funding.
Research Departments should assess the potential impact of reduced federal funding on ongoing and future research projects. Identifying alternative funding sources, such as private grants or partnerships, will be crucial to sustaining research activities.
The Office of the Provost should coordinate with academic departments to evaluate the potential effects of budget cuts on academic programs and student services. Developing strategies to maintain program quality and student support despite financial constraints will be essential.
Vanderbilt’s Community Engagement Office should explore opportunities to strengthen partnerships with local and state governments, as well as private sector entities, to diversify funding sources and reduce reliance on federal funds.

Opportunities

The sequestration order presents an opportunity for Vanderbilt’s Development Office to enhance fundraising efforts and build stronger relationships with alumni and donors. By highlighting the potential impact of federal budget cuts, the university can encourage increased philanthropic support.
Vanderbilt’s Innovation Center can leverage the situation to promote entrepreneurial initiatives and collaborations with industry partners. By fostering innovation and commercialization of research, the university can generate additional revenue streams.
The focus on budgetary constraints may encourage Vanderbilt’s Sustainability Office to implement cost-saving measures and efficiency improvements across campus operations. This can lead to long-term financial savings and environmental benefits.
By engaging in public discourse on the implications of federal budget cuts, Vanderbilt’s Public Policy Institute can position itself as a thought leader in fiscal policy analysis and advocacy. Hosting forums and publishing research on the topic can enhance the university’s reputation and influence.

Relevance Score: 4 (The sequestration order necessitates major process changes due to potential impacts on Vanderbilt’s federal funding and budget planning.)

Average Relevance Score: 4

Timeline for Implementation

October 1, 2025 – The mandate specifies that on this date, direct spending budgetary resources for fiscal year 2026 be reduced as calculated by the Office of Management and Budget.

Relevance Score: 2

Impacted Government Organizations

Office of Management and Budget (OMB): Tasked with calculating the sequestration amounts and preparing the essential report to Congress, making it central to the execution of the order.
All Federal Agencies with Non-Exempt Budget Accounts: These agencies will be directly affected by enforced spending cuts, as the directive mandates reductions across every non-exempt account for fiscal year 2026.
Congress: Although not directly executing the order, Congress is involved through receipt and oversight of the OMB’s report and in evaluating compliance with fiscal goals established by the mandate.

Relevance Score: 5 (The directive applies broadly across the executive branch and involves oversight by Congress, impacting a wide range of government organizations.)

Responsible Officials

Office of Management and Budget (OMB) – Tasked with calculating and reporting the precise budget reduction amounts as required by the sequestration order.
Heads of Non-Exempt Agencies – Required to implement the spending reductions in their respective budget accounts as directed on October 1, 2025.

Relevance Score: 4 (The directives directly affect agency heads responsible for executing budget adjustments across non-exempt accounts.)