Sequestration will result, among many other things, in severe budget cuts for the National Institutes of Health, the National Science Foundation, the Center for Disease Control, and other important research-funding institutions. Those cuts will, in turn, result in a greatly diminished ability for the federal government to fund scientific research. Since the federal government is the primary provider of research funds in the U.S., this will be a major blow to American scientific progress and growth.
A severe sequestration-induced budget cut will have several immediate impacts on scientific research. First and foremost, the number of grants available to researchers in any given field will decrease. This wouldn't be so bad if competition for federal grants wasn't very, very fierce already. The odds of getting an NIH grant have always hovered between 20% and 40% at best. Of course, not all grants are worth funding, but a lot of good ones already have a hard time making it in.
The increase in competition will make it hard for professors who are trying to pay members of their lab who are already somewhat underpaid (ask a post-doc who spent half a decade getting a PhD only to make less than 45 grand a year if the pay scale complies with his or her perception of the value of an advanced scientific degree, and watch for cringing). Smart young college students who plan want to become scientists are going to start thinking twice once they hear that the job pool for professorships (and the opportunity to run basic research labs) is small and getting smaller, but that the competition for funding amongst those fortunate enough to have those jobs is getting harsher. When young people stop pursuing scientific career tracts, that's when the progress of the country in science and technology begins to collapse.
The irony is, the sequestration measure came about as a result of the federal government's balooning debt and deficit, which are driven overwhelmingly by mandated entitlement programs. In other words, federal funding for health science research has been placed at great risk by federal funding for health administration! That policy is useful for administering the cures and treatments we have to those we need them, but bad for finding the cures and treatment that others desperately need us to find.
Of course, not all is lost. There are a lot of private companies that do scientific research. But these companies are profit driven, and will not necessarily fund projects that don't yield any clear downstream practical benefits. That's good business sense for them, but if American science is going to depend on that mentality for growth, then the long term benefits of basic research that are unforseeable by CEOs are going to disappear, and that will be a tragedy.
The federal budget problem is not an easy one. The United States has the problem of having too many good intentions. It is probably a good thing for a caring society to mandate that half of all government spending go to aiding the poor, sick and elderly. Furthermore, our ongoing investment in military power, educational programs, infrastructure, agricultural assistance, etc. etc. etc. are all, at least superficially, admirable goals. But in four months-- four months!-- this problem is going to come to a head, and unless Congress can overcome the political fear that is impeding their practical will to act, a lot of important programs are going to suffer a lot of unnecessary damage.
And American scientific research is high on the list of potential victims.