Congress averted the “fiscal cliff,” however the potential automatic spending cuts, or sequestration, has only been delayed until March 1st. These cuts will be devastating for the future U.S. leadership of research and development and would delay access to new medical treatments. Sequestration would slash federal investments in critical health, scientific, medical and biological research aimed at discovering treatments, moving safe and effective new medicines to market, and creating the innovations to grow our economy.
If Congress cannot agree on a replacement for sequestration, then these devastating cuts would go into effect on March 1st. The delay gives us additional time to lobby Congress to protect essential FDA and NIH funding. We want Congress to abandon across-the-board cuts and allow the Appropriations Committees to do their job: determine national priorities and make sure they are funded.
What is the sequester?
It’s a package of automatic spending cuts that’s part of the Budget Control Act (BCA), which was passed in August 2011. The cuts, which are projected to total $1.2 trillion, are scheduled to begin in 2013 and end in 2021, evenly divided over the nine-year period. The cuts are also evenly split between defense spending — with spending on wars exempt — and discretionary domestic spending, which exempts most spending on entitlements like Social Security and Medicaid, as the Bipartisan Policy Center explains. The total cuts for 2013 will be $109 billion, according to the new White House report.
Under the BCA, the cuts were triggered to take effect beginning Jan. 1 if the supercommittee didn’t to agree to a $1.2 trillion deficit-reduction package by Nov. 23, 2011. The group failed to reach a deal, so the sequester was triggered.
Why does everyone hate the sequester so much?
Legislators don’t have any discretion with the across-the-board cuts: They are intended to hit all affected programs equally, though the cuts to individual areas will range from 7.6 percent to 9.6 percent (and 2 percent to Medicare providers). The indiscriminate pain is meant to pressure legislators into making a budget deal to avoid the cuts.
Why did Congress and the White House agree to the sequester in the first place?
The government was approaching its debt limit, which needed to be raised through a congressional vote or else the country would default in early August 2011. While Democrats were in favor of a “clean” vote without strings attached, Republicans were demanding substantial cuts in exchange for raising the debt limit.
President Obama and congressional leaders ultimately agreed to the Budget Control Act, which would allow the debt ceiling to be raised by $2.1 trillion in exchange for the establishment of the supercommittee tied to the fall-back sequester, as the Center for Budget and Policy Priorities explains. The deal also includes mandatory spending reductions on top of the sequester by putting caps on non-entitlement discretionary spending that will reduce funding by $1 trillion by 2021.
Who supported the debt-ceiling deal?
Party leaders, the White House and most members of Congress supported the debt-ceiling deal: The BCA passed on a 268-161 vote in the House, with about one-third of House Republicans and half of House Democrats opposing it. It passed in the Senate, 74-26, with six Democratic senators and 19 Republican senators opposing it.
Can the sequester be avoided?
Yes, but only if Congress passes another budget deal that would achieve at least $1.2 trillion in deficit reduction. Both Democrats and Republicans have offered proposals to do so, but there still isn’t much progress on a deal. The political obstacles are the same as during the supercommittee negotiations: Republicans don’t want to raise taxes to generate revenue, while Democrats are reluctant to make dramatic changes to entitlement programs to achieve savings.
Reports on the Impact of Sequester: