Health Center Federal Policy

Fiscal Cliff Averted and Sequestration Delayed For Now

by Abby Pinkele

Late last night and at the very last minute, the House passed HR 8, the American Taxpayer Relief Act of 2012, to avert the fiscal cliff and delay the sequester for two months. A more detailed explanation of HR 8 can be seen here in the Washington Post.

In the long term, HR 8 largely focuses on tax and revenue provisions. In the short term, this legislation pushes the pause button for two months on the sequester. The delay in the sequester required a reduction in spending, which in this case involves a reduction in the Budget Control Act spending caps for the FY13 and FY14 budgets. The legislation reduced the cap on discretionary funding for non- defense discretionary programs for FY13 from $361 billion to $359 billion. As outlined in a previous blog, Congress is currently operating under a temporary Continuing Resolution (CR) for FY13 that will expire on March 27, 2013.  Appropriations provided thus far in FY13 for non- defense discretionary programs under the CR totals $356.163 billion; thus, reducing the cap to $359 billion would not have any impact on the current level of funding, and it actually leaves $3 billion in additional cap room for increased non-defense spending in a full-year CR.

Though we can breathe a small sigh of relief for now, the road ahead will not be any easier as Congress will be tackling what will very likely prove to be contentious issues. The debt ceiling will need to be increased sometime in February, the sequester will go into effect on March 1 unless it is averted again, and the CR will expire March 27th throwing a potential government shutdown into the mix. This legislative super storm will need to be resolved in relatively early in March and we should anticipate that these negotiations will be just as difficult as the showdown we just witnessed.

For health centers, the playing field has not changed with the delay of the sequester. We will still be working to ensure our 2% funding cap is in place for all health center funding should the sequester eventually go through.  We also want to ensure the Administration would use the $300 million increase provided within the Health Center Trust Fund for FY13 to offset any sequester funding cut to health centers in lieu of cutting existing health center operations. Additionally, we will want to ensure that Medicaid is not undermined in any deal to avert the sequester.

We will also be closely monitoring action on the CR and raising the debt limit to ensure that funding for health centers is protected. Many members on Capitol Hill are already stating their displeasure at the lack of funding reductions and entitlement reform included in HR 8.  We can expect a lot more discussion around ways to reduce spending in the coming months, along with increased calls for funding reductions as well as entitlement reform as necessary components for passing any new spending bills.

It is important for our grassroots advocates to continue their outreach to House and Senate members. Advocates should also be on the lookout for action alerts to contact Members of the House and Senate on this issue in the months to come. We wish you a Happy New Year and we will provide any new information and updates as soon as we receive them.