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News & Observer - Unless DC finds alternative to sequester, NC faces new budget cuts

November 25, 2013
In The News

By Renee Schoof

WASHINGTON — When Congress returns to Washington after Thanksgiving, budget negotiations will be getting down to the wire on a deal for next year’s federal spending.

Without an agreement in December, North Carolina and the nation could be facing a second round of the automatic spending cuts known as sequestration. Those indiscriminate cuts have had ripple effects on the state in many areas, including Head Start, highways, research, meals for low-income seniors and the defense industry.

The impacts ahead are hard to predict. Budget negotiators from the Senate and House of Representatives could reach a deal. Congress also could change the terms of the sequester cuts. Or another stop-gap spending bill could continue the same level of cuts. A second year of automatic cuts could be deeper than the first because last year’s cuts began March 1, but the second year’s cuts under the 2011 Budget

Control Act would be for a full year, said Alexandra Forter Sirota, director of the Budget and Tax Center in Raleigh.

It also would follow cuts by the state legislature.

“The combined effect of federal and state cuts is going to be devastating,” Sirota said.

Susan Reynolds of Fayetteville, whose husband is in the military at Pope Field, said she hears concerns about how the military must make do with less but still perform its mission.

“We are also seeing cuts in the military to family support, to facilities on post that need repair and may not be repaired as quickly as before, to lack of landscaping, longer waits at the clinics and hospitals, all of that too,” she said in an email.

“I find it stressful,” she added. “I really feel like I’m waiting for the other shoe to drop.”

Nationwide, sequestration reduced defense and non-defense spending by $80 billion in the fiscal year that ended Sept. 30.

Last year the White House Office of Management and Budget made predictions by state on the effects of the cuts. It’s still too early to say to what extent those things happened on a state level, OMB spokesmen said.

But some impacts reported elsewhere include:

HEAD START – Last year 1,346 fewer children were signed up in North Carolina due to the cuts, out of a total of about 28,600 the previous year, the National Head Start Association, an advocacy group, reported.
In Durham County, Head Start, the federal government’s main program for children from birth to 5 in poor families, serves 42 fewer children because of the cuts, said Laura Benson, executive director of Durham’s Partnership for Children, a nonprofit group that runs the county’s Early Head Start program.

RESEARCH – Less federal money for the National Institute of Health and other federal agencies cuts into what Triangle scientists can do.

Federal funding cuts were discussed earlier this month at a conference of the Association of Public and Land-grant Universities in Washington.

Chris Brown, vice president for research and graduate education at the University of North Carolina, said grants to the university system were reduced by about $50 million last year.

“In some instances, a university can backfill, but not for a long time,” he said.

MILITARY – Nationwide, the cuts reduced the military budget by $37 billion in 2013. If there’s no deal to replace sequestration and Congress doesn’t change the spending caps, the military budget for 2014 will be $52 billion below the president’s requested amount, which was $527 billion, according to the Pentagon.
“Sequestration was very hard on this community when it happened last year,” said Fort Bragg spokesman Ben Abel. The vast majority of civilian Defense Department workers were furloughed for six days with no pay.

There are about 109,000 active duty personnel, 27,000 defense civilian workers and 38,000 members of the military reserves in North Carolina, according to the state Commerce Department. The agency said it has not done any study of the impacts of the federal budget cuts.

Chief of Staff of the Army Gen. Ray Odierno told the Senate Armed Services Committee earlier this month that if Congress doesn’t ease them next year and beyond, the Army will be forced to downsize. Further sequester cuts, he added, “will have drastic impacts across all aspects of Army readiness in training, equipment sustainment and modernization, military and civilian manning, and installation support.”

AFFORDABLE HOUSING – If sequestration continues in 2014, 3,644 to 5,208 fewer families will receive housing vouchers in North Carolina by the end of 2014, compared to the number who got them at the end of 2012, the Center on Budget and Policy Priorities in Washington estimated. The federal vouchers help low-income households be able to afford to rent modest housing on the private market.

Rep. David Price, D-N.C., a member of the House Appropriations Committee, said that more automatic cuts would be “devastating for many things in North Carolina that we care about.”

“I’m not talking about indiscriminate spending. I’m talking about just the opposite of that,” the Chapel Hill Democrat said in an interview on Wednesday in Washington. “I’m talking about a rational process that yes, has adequate resources but also makes those choices deliberately and doesn’t just leave it to some kind of automatic mechanism.”

Congress left Washington for a break that began Friday. The House returns Dec. 3, the Senate Dec. 9. That means that both House and Senate members of the budget conference committee will have about a week to get a final deal before a Dec. 13 deadline.

Obama and Democrats want what they call a balanced budget deal with both spending cuts and additional revenues. Republicans have insisted on no new taxes.

Rep. Renee Ellmers, R-N.C., whose district includes Fort Bragg, said in a statement she had voted for bills in the House of Representatives that would “prevent the military from shouldering the load of these cuts.” Those measures, which were blocked in the Senate, would have continued non-defense cuts and allowed for them to extend to mandatory programs, such as Medicare.

The automatic cuts on defense and other types of spending were put in place under the 2011 Budget Control Act. The law set up a congressional committee to propose a deficit reduction plan. The committee failed, triggering a 10-year period of automatic cuts to reduce the deficit by $1.2 trillion. Price and others on the Appropriations Committee would like the budget negotiators to give them a budget figure so that they could craft separate appropriations bills and roll them into one spending bill. Rep. Hal Rogers, R-Ky., the chairman of the Appropriations Committee, and all 12 Republican subcommittee chairmen wrote to the budget conference committee on Nov. 18, asking them to agree to the annual spending limit so that their committee could get to work. The Republican appropriations leaders wrote that if an agreement can’t be reached in time, “the likely alternatives could have extremely damaging repercussions.” They said that these would include a possible shutdown or another stop-gap spending bill and another round of automatic cuts that “could have negative consequences on critically important federal programs, especially our national defense.”