Congress Fails to Stop Sequester
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Congress Fails to Stop Sequester

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March 4, 2013

What You Can Do

  • Tell us how cuts are affecting seniors in your community
  • Watch your email for tips to share your story when Congress is home March 23-April 7

Despite a record-setting number of emails generated during NCOA’s Virtual Advocacy Days, the drastic, automatic federal budget cuts, or sequester, took effect on March 1.

On Feb. 28, the Senate failed to adopt the American Family Economic Protection Act, which proposed to replace the sequester through 2013 with a package equally divided between spending cuts and revenue increases. The 68-member Leadership Council of Aging Organizations (LCAO), chaired by NCOA, wrote to the Senate calling for the bill’s passage.

The vote fell short of the 60 needed to advance the legislation, with 51 Democrats voting yes and 46 Republicans and 3 Democrats voting no. The 3 Democrats voting against the bill are up for re-election in 2014: Sens. Kay Hagan (NC), Mark Pryor (AR), and Mary Landrieu (LA).

What's Getting Cut

The Obama Administration released updated information about how the cuts will be applied. Of most importance to programs and services for older adults are:

  • A 5% cut in nondefense discretionary funding
  • A 5.1% cut in nondefense mandatory funding (Social Security and Medicaid are excluded and Medicare cuts are limited to 2% on provider payments)

Discretionary spending reductions include:

  • Administration for Community Living (ACL): $75 million
  • Senior Community Service Employment Program (SCSEP): $23 million
  • Low-Income Home Energy Assistance Program (LIHEAP): $175 million
  • Social Services Block Grant (SSBG): $117 million
  • Prevention and Public Health Fund: $51 million
  • Section 202 Housing for the Elderly: $19 million

Since the reduction for most programs will be taken from funds available for the remaining seven months of the fiscal year, the Administration reports that the cut is effectively 9% for nondefense programs.

Advocates are still waiting to hear how the Administration will apply several of the cuts. For example, the ACL budget must be reduced by $75 million, but it's not clear how individual Older Americans Act programs will be affected.

NCOA’s greatest concern is that local organizations, which have been extremely innovative to continue providing services despite limited resources, may be forced to incur lengthy waiting lists or eliminate programs altogether. Your observations of the effects of the sequester in your community, especially on individual seniors, are more important than ever as organizations are once again asked to do more with less.

The Debates Ahead

Looking forward, it's unclear where the next opportunity might lie to address the sequester. Congress has a full slate of budget debates already on tap for March. These include:

FY 2013 Funding

Typically, 12 individual appropriations bills are passed each year to provide funding for programs for the federal fiscal year that begins Oct. 1 and ends Sept. 30 of the following year (e.g., FY13 runs from Oct. 1, 2012 to Sept. 30, 2013). When the bills are not enacted on time, a continuing resolution (CR) is passed to extend funding.

Unlike appropriations bills, CRs usually are a stopgap measure to provide funding for a short time period at current levels (limited increases or cuts) with few if any policy changes. In recent years, full-year funding is ultimately approved as part of an omnibus package that bundles together multiple appropriations bills.

The current CR is due to expire on March 27, and the House and Senate are taking different approaches to finalizing funding for the remaining seven months of FY13. Both bills assume the sequester cuts will continue to be in place, but propose some flexibility to protect certain activities.

The House package, scheduled to be debated this week, contains appropriations bills for Defense and Veterans Affairs (VA) and a CR to extend funding for all other programs. Provisions are included to shift funding around to address areas such as military readiness, immigration enforcement, diplomatic protection, and future wildfire response.

The Senate is expected to consider an omnibus appropriations package next week that contains most, if not all, of the individual 12 bills. More changes in funding will be included, but the overall totals will equal those of the House measure. Additional flexibility to address the sequester reportedly will be provided, particularly for nondefense programs.

Despite the short time period available to negotiate a compromise between the House and Senate proposals, Republican and Democratic leaders continue to state that a government shutdown is unlikely and a deal should be reached before March 27.

Future Budgets for FY 2014

Congress also is required to enact an annual budget resolution by April 15 to set overall spending limits and allocate resources among a number of categories or “functions.” The resolutions are not signed into law, and are nonbinding budget blueprints, so Congress has not felt much pressure in recent years to adopt them.

However, the legislation enacted earlier this year to avert the “fiscal cliff” mandated that both chambers approve a budget resolution by April 15 or members of Congress would not be paid. 

Therefore, the House and Senate will move quickly this month on their respective FY14 budget resolutions, at the same time Congress is still working to finalize FY13 appropriations. The Budget Committees, led by chairs Rep. Paul Ryan (R-WI) and Sen. Patty Murray (D-WA) are expected to consider proposals next week, with floor debate scheduled for the week of March 18.

The House budget is expected to be similar to the one adopted last year along party lines, but with even larger program cuts and repeals (about $4 trillion in additional cuts over 10 years) in order to meet the new goal of a balanced budget in 10 years without raising any revenues. The Senate budget will be based on a more balanced approach to deficit reduction of about $1.5 trillion over 10 years, incorporating both savings and revenues.

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