The clock runs out on averting sequestration

Mar 3 2013

Time ticked down to March 1 -- also known as sequestration D-day -- without the White House and lawmakers finding a way to avert the scheduled cuts.

The Wall Street Journal: Cuts Roll In As Time Runs Out
The federal government enters a controversial new phase of deficit cutting Friday, as an automatic trigger begins slicing budgets in some areas while leaving programs such as Medicare and Medicaid-;among the largest drivers of future debt-;largely untouched (Paletta and Hook, 2/28).

The Associated Press/Washington Post: Obama Still Betting On A Big Fiscal Deal As Automatic Cuts Kick In, But Odds Weigh Against Him
A fiscal deadline all but blown, President Barack Obama says he once again wants to seek a big fiscal deal that would raise taxes and trim billions from expensive and ever growing entitlement programs. But with automatic federal spending cuts ready to start taking their toll, the path toward that grand bargain Obama campaigned on last year has significantly narrowed. The president has summoned the top bipartisan congressional leadership to the White House, a meeting designed to give all sides a chance to stake out their fiscal positions with a new threat of a government shutdown less than four weeks away. There were no expectations of a breakthrough (3/1).

The New York Times: Boehner Halts Talks On Cuts, And House GOP Cheers
Speaker John A. Boehner, the man who spent significant portions of the last Congress shuttling to and from the White House for fiscal talks with President Obama that ultimately failed twice to produce a grand bargain, has come around to the idea that the best negotiations are no negotiations (Parker, 2/28).

USA Today: Senate Rejects Sequester Alternatives
The Democratic alternative would have replaced the cuts, known as the sequester, with a combination of a minimum 30% tax on millionaires and cuts to defense and farm programs. It failed 51-49. The Republican alternative would have transferred sweeping authority to President Obama to force him to determine how to implement $85 billion in cuts instead of the across-the-board spending cut affecting most reaches of the federal government. The sequester exempts military personnel accounts and the social safety net including Social Security and Medicare. The GOP measure also failed, 38-62 (Davis, 2/28).

Boston Globe: Sequester's Long-Term Effects Still Unclear
For some, the sky is falling. But for many others, the budget cuts will hardly register. That may explain why legislative efforts to forestall the cuts this week were barely evident, despite dire warnings from President Obama and administration officials. … Medicaid and Social Security benefits won't be touched by the cuts, while Medicare payments to health providers will drop 2 percent. Head Start, the federally funded early childhood education initiative, will also see budget cuts, leaving 1,100 Massachusetts children out of the program this year, according to the White House (Uberti, 3/1).

CBS News: 4 Possible Silver Linings In The Sequester
The dreaded sequester takes effect today as $85 billion in automatic cuts to 2013 federal spending begin rolling in, slashing services and sowing all manner of chaos, according to government officials who have warned for months about the harmful economic impact of allowing the cuts to proceed. Nobody is particularly happy about it. President Obama and congressional Democrats have sounded the alarm most urgently. ... During the negotiations that produced the sequester, Democrats successfully pushed to exempt most forms of politically sensitive entitlement spending from the automatic cuts. As a result, Social Security, Medicaid, veterans' benefits, unemployment insurance, and food stamps will not see any reduction in funding. Medicare beneficiaries were also spared the axe, while Medicare providers will see only a 2 percent reduction in payments. Mr. Obama's healthcare bill, some recall, also opted to slash payments to Medicare providers in lieu of targeting beneficiaries (Miller, 3/1).

Medscape: Medicare Pay Cut From Sequester To Go Into Effect March 1
The US Senate rejected two competing proposals today that would have replaced the "sequester" -; $85 billion worth of automatic, across-the-board budget cuts set to take effect March 1. Barring some last-minute rescue, that means Medicare reimbursement for physicians and other healthcare providers will decrease by 2%. The scheduled 2% reduction in Medicare reimbursement to physicians and other providers presumably would apply to all services rendered, beginning March 1. The Centers for Medicare & Medicaid Services had no comment as yet on how the pay cut would be implemented (Crane, 2/28).

Kaiser Health News: Hospital Executive Bracing For Budget Cuts Says 'We Need To Deal With Medicare'
David P. Blom is one of thousands of hospital executives across the country who are bracing for a reduction in Medicare payments as part of a series of federal spending cuts that begin Friday. Blom, 58, is president and chief executive officer of OhioHealth, a Columbus, Ohio, based not-for-profit health care system that includes 18 hospitals, 23 health and surgery centers, home-health providers and other facilities (Carey, 3/1).

USA Today: Interest Groups Barrage Congress With Sequester Pleas
Hematologists are sending tweets to members of Congress, warning that looming cuts to federal research funding threaten to slow medical advances for diseases such as sickle-cell anemia and lymphoma. … Hundreds of elected officials from cash-strapped counties will swarm Capitol Hill in the coming days to decry reductions to federal grant programs that help fund everything from libraries to sewage systems. Public-sector unions began running television ads in in seven cities Thursday that target Republicans and warn of financial pain for millions. Lobbyists and interest groups representing almost every corner of the country have spent months and millions trying to forestall what now seems inevitable: automatic across-the-board cuts totaling an estimated $85 billion that will kick in starting Friday without action by Congress and the White House (Schouten, 2/28).

Kaiser Health News: Medical Research, FDA And Mental Health Programs Face Budget Bite 
Doctors serving Medicare patients. Scientists looking for a better way to treat diabetes. HIV patients who can't afford to buy their medications. These are but some of the many people who will be affected by the automatic federal spending cuts that officially take effect today (Carey, 3/1).

Oregonian: Oregon Health & Science University Freezes Hiring, Citing Federal Cuts
Oregon Health & Science University officials will largely freeze hiring in response to looming federal cuts that could mean a $32 million budget hit to one of the state's largest employers. Triggered by a Congressional failure to reach agreement on debt reduction, the cuts are scheduled to kick in on Friday, Mar 1, trickling down to OHSU. The cuts will carve at least 10 percent from the university's federal research funds, and hurt Medicare revenue as well. "I think that like everyone else we hoped it would not come to this," said OHSU President Joe Robertson. The university employs more than 14,000 people with a payroll of more than $900 million. The OHSU hiring freeze and other cuts, including to travel and consultants, will be focused on education programs and research to preserve its hospitals and clinics, Robertson said: "The quantity and quality of our health care will remain unchanged" (Budnick, 2/28).

Baltimore Sun: Sequestration Will Hit Health Care In Maryland
The chief financial officer at Anne Arundel Medical Center is watching the fight over federal spending closely. If the federal government goes through with sequestration cuts beginning today, Maryland stands to lose millions of dollars in health-related funding that could leave hospitals such as Anne Arundel Medical Center looking for ways to make up lost revenue without weakening medical care. "We're here for the community and, like all hospitals, we are here 24/7 and will not jeopardize the care of patients," said Bob Reilly, the Annapolis hospital's finance director. "We'll have to look elsewhere -; back office or other support functions -; and not impact patient care" (Walker, 2/28).