Last year, Congress was in a deadlock over trying to resolve budget issues, specifically related to extending America’s debt-ceiling while it was on the verge of defaulting. Subsequent to President Obama and Congress passing the Budget Control Act (BCA), a plan had been proposed that would inherently increase the debt-ceiling in exchange for budget caps by reducing government spending by $917 billion over the course of the next ten years.
The BCA also arranged for a “Super-Committee” to be appointed to develop a plan to slash the deficit by $1.5 trillion on top of the $917 billion Congress had already planned on cutting. If the committee failed to reach a decision, $1.2 trillion-worth of across-the-board cuts would be inevitably prompted on January 2, 2013 – split evenly between discretionary security and non-security programs over the next consecutive nine fiscal years – therein lies the “sequestration”.
Since there had been no formal resolution of the Super-Committee, sequestration is set to go into effect on January 2, 2013. The fate of lesser funded human services programs are very much in danger of being affected by these proposed federal cuts, given that these mandatory funding cuts will affect them more than other programs because human services programs notoriously have less funding. While the goal of sequestration is to pressure legislators to make necessary federal cuts, it is forcing smaller programs to take a harder hit, while some remain not as affected. Below illustrates the proposed funding cuts via sequestration:
- 9.4% percent on defense discretionary funding;
- 8.2% on non-defense discretionary funding;
- 2% on Medicare;
- 7.6% on mandatory defense funding, and;
- 10% on mandatory non-defense.
Sequestration will also have a significant negative impact on critical funding streams; between 8.2 percent or 10 percent on services ranging from tenant assistance, children and family services programs, social services block grants, services for elderly and aging, as well as various homelessness assistance programs. These are just several of the grants and government support that would be removed as a result of the impacts of sequestration. Unlike a formidable, strongly funded program like the military, slashing program budgets by these percentages for smaller programs will result in a significant reduction in available services.
Members of Congress are concerned with the level of cuts that the military will be receiving through this proposed plan. However, the projected economic effects for non-defense program cuts are seemingly worse than cuts to the military, based on a 2011 study. The Political Economy Research Institute (PERI) at the University of Massachusetts-Amherst found that investing $1 billion in health care or education industry creates considerably more jobs within the U.S. economy than spending $1 billion on the military. In health care, the difference is 54 percent more jobs; in education, 138 percent. Subsequently, a July 2012 study commissioned by the Aerospace Industries Association found that sequestration’s cuts to non-defense spending would reduce the US GDP during FY2012-21 by $77.3 billion than cuts to defense spending, $72.1 billion respectively.
For New York State alone, through sequestration, we would sustain losses totaling $326.7 million in these three agencies: $185 million from education, $121 million from health and human services, and $20 million from labor. Several government funding streams would be lost, worker and block grants would be cut, and special education programs would also be reduced tremendously.
So what’s next? Sequestration is unfortunately out of our hands, however, there are some things we are able to do. First, make sure you go out and vote on November 6! Be sure to familiarize yourself with these growing budgetary issues. It’s important to stay knowledgeable on key matters that affect human services and local community programs. Additionally, advocacy nonprofits such as the Coalition on Human Needs (CHN) provide insight to these matters and often campaign alongside many of these social impact issues. Nonprofits and other stakeholders can come together and make the case for current programs, and show that the use of human services is essential to Americans and should therefore not be cut.
Contributed by Marisa Semensohn of the Human Services Council.