Sequestration Update Report: August August 13, August 15, February 25, The sequester would weaken the ability of our hospitals to care for the communities of color that have suffered disproportionately from the pandemic.
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Supply Chain. Untangling the complex web of US drug pricing. Nonprofit health plans focus on reducing premiums. Quality and Safety. Billing and Collections. COVID hospitalizations could cost patients thousands. On the non-defense side, roughly one-third of the non-defense savings originally came from mandatory spending and the rest from a reduction in discretionary spending. Within each category, the BCA allocated the savings proportionally across discretionary and non-exempt mandatory programs.
On the mandatory side, each year the Office of Management and Budget OMB calculates the percentage and dollar amount to be taken from affected programs to achieve the total mandatory cut required by the BCA.
When Congress raised the discretionary caps, it directed that the mandatory sequester calculations be made as if the caps had not been raised. Unlike discretionary spending caps, which expire after , sequestration of mandatory spending has been extended on several occasions. The BBA of extended the mandatory sequester through , and then a law modifying military retiree benefits extended the sequester through These extensions did not specify the amount of savings that the sequester would need to achieve in fiscal years after FY , but instead directed OMB to apply the percentage reductions calculated for FY to subsequent fiscal years.
Under the BCA, across-the-board reductions are made to all mandatory programs that are not specifically exempt. In addition, the cut is limited for certain programs, such as Medicare, which receives cuts to providers that are capped at 2 percent regardless of the size of the sequester.
Even though the Medicare cut is limited, it still comprises about three-quarters of the non-defense mandatory sequester in dollar terms.
The remaining reductions come mostly from farm programs, but student loans, the Social Service Block Grant, vocational rehabilitation, and dozens of other programs are also affected.
Interactions with the federal government that are labor intensive and time consuming—like obtaining approval for a drug through the Food and Drug Administration FDA or receiving a grant from the National Institutes of Health NIH —will become even more challenging as delays become more inevitable.
The effects of the March 1 sequester would phase in slowly over the next two months. The law generally requires 30 days notice before absences, which will be required of employees across the government—from FDA inspectors and NIH clinicians to CDC disease outbreak investigators.
Other actions, such as hiring freezes and a slowdown in contracting, could happen much more quickly. Agencies have some discretion on when to make the cuts.
However, delaying cuts upfront means deeper cuts later in the year if Congress is unable to develop a deal to address sequestration. Additionally, other budget and fiscal issues must soon be addressed by Congress and the White House. On March 27, the current continuing resolution, which keeps the government funded, expires. Congress will have to hash out a plan to fund the government by then or else the government slowdown would turn into a full-blown shutdown. As part of the American Taxpayer Relief Act of , the total amount of funding for fiscal year must be equivalent to fiscal year funding or an additional sequestration goes into effect.
Without a grand bargain, it is unlikely that the appropriations process would be able to fully offset the cuts from the sequestration beginning on March 1.
Congress agreed to support the concept by incorporating it into the Budget Control Act, with neither party believing it would ever be necessary. Both sides saw it as a way to force further negotiations later, according to Woodward.
The Obama team thought there was "no chance" Republicans would allow defense cuts to happen, while Boehner said Democrats would cave to save domestic programs. Woodward quotes Boehner predicting the sequester "is never going to happen. Republicans have repeatedly said the sequester was President Obama's idea, but they supported it early on and provided the votes needed to put it into law. Press Room. User Agreement. Privacy Policy.
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