The bipartisan panel is charged with cutting at least $1.2 trillion over 10 years. If it can’t overcome the enormous political obstacles to a deal, automatic cuts would kick in as of 2013, half coming from defense, the other half from domestic spending. Congress laid out this scenario — dubbed “sequestration” in legislative lingo — when it created the committee in August as part of a deal to raise the debt ceiling and avoid the first U.S. default in history.
While the committee can chop Medicaid and Medicare as part of a negotiated agreement, automatic cuts would not affect Medicaid funding; there would be a 2 percent reduction in Medicare payments to hospitals and other providers. That would make the hit to many other programs all the more severe.
“I don’t know if a lot of people have appreciated how big a hit the discretionary health programs” could take if there are automatic cuts, said Richard Deem, senior vice president of advocacy for the American Medical Association. “I think a lot of people are going to wake up to that too late.”
At stake is federal money that, among other things, helps HIV patients pay for lifesaving medication, finances biomedical research and helps prevent and respond to food-borne illnesses and disease outbreaks.
Automatic reductions, for example, could translate into less staff to handle food contamination, said Georges Benjamin, executive director of the American Public Health Association. Recently, Colorado cantaloupes sickened 116 people in 25 states with listeria, killing 23, according to the Centers for Disease Control and Prevention. “Someone has to go into stores and make sure the stuff has been taken off the shelves. I am very worried about what [automatic cutting] does to the public’s capacity to be safe.”
If the full $1.2 trillion in automatic cuts go into effect, funding for non-defense discretionary programs in 2013 would face reductions of 7.8 percent, dropping each year to 5.5 percent in 2021, according to Congressional Budget Office estimates. Richard Kogan, a senior fellow at the Center on Budget and Policy Priorities, however, places the first year’s hit at more than 9 percent.
Health advocates say that deep cuts could harm the public by reducing services and investment in several areas, including:
●Public health. The CDC is particularly vulnerable because it was hit hard in the last round of budget cuts, Benjamin said. In fiscal year 2011, federal funding for the CDC declined by $740 million.
The agency plays an important role in detecting and responding to emergencies such as tornadoes, hurricanes, food-borne illnesses and infectious-disease outbreaks. It also helps fund state and local public health departments and labs, which Benjamin said is important as states struggle with massive budget deficits.