Kids Will Lose $6.5 Billion from Sequestration in Fiscal Year 2013

Monday, August 27, 2012 at 4:25 PM by

Proposed House Changes Would Cut Even More

The broad federal budget cuts known as the sequester are expected to cut federal funding for kids by $6.5 billion in federal fiscal year 2013. A new two-page fact sheet by First Focus summarizes the anticipated cuts, which begin in January, as well as the House budget priorities that would protect defense spending by making even deeper cuts to programs affecting children.

Assuming that the House plan with larger cuts for kids is not approved by the Senate and signed by the next president, sequestration will cut spending for children in the following ways during the first nine months of 2013 (i.e., the second through fourth quarters of the federal fiscal year that starts this October).  The following sequestration cuts are on top of other explicit cuts in last fall’s Budget Control Act: 

  • Education funding is expected to be cut by more than $3.3 billion;
  • Early childhood funding will drop by about $937 million;
  • Children’s housing will be cut by $926 million; and
  • Child nutrition, particularly the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), will be reduced by $557 million.

The sequestration is part of the budget cutting approved last year when a number of conservative lawmakers refused to support an increase in the federal debt ceiling unless Congress and the President enacted legislation making substantial cuts that would begin in FY 2013. To avoid the consequences of reneging on U.S. debts, Democrats agreed to very substantial cuts – provided that either: a) a Super-committee would develop and Congress would approve a balanced deficit reduction package that would include revenue increases as well as spending cuts, or b) the fall-back plan of automatic spending cuts (the sequester) would protect entitlement programs like Medicaid and would cut equally in defense and non-defense spending.

Since the super-committee process failed, the law defaults to the sequester approach. Although last year’s compromise was not perceived as being a very good deal for Democrats, at least it protected Medicaid and CHIP and kept the cuts to services for kids from being as bad as they might have been. Nevertheless, children will be adversely affected in the following ways:

  • Education – Title I – 1.8 million fewer students will be served nationwide.
  • Special education grants to states – Nearly 500,000 fewer special education students will be served.
  • Head Start – 96,000 fewer children served.
  • Child Care and Development Block Grant – 80,000 fewer children served nationwide.
  • Nutrition – WIC – Over 752,000 participants would be cut from nutrition assistance nationwide.
  • Childhood immunization grants – Nearly 212,000 fewer children would be vaccinated nationwide.
  • Maternal and Child Health Block Grant – 5.67 million fewer children, women, and families would be served nationwide.

There is still a distinct possibility that even deeper cuts for kids will take effect early next year, and far larger cuts could begin next October under the House-approved budget authored by Rep. Ryan, which largely protects defense spending, while making far greater total cuts than the sequester. The fact sheet summarizes the magnitude of some of the cuts for kids that would result over the next 10 years from the Ryan budget, and you can read more about Wisconsin effects of that bill in our August 8th blog post.
The defense industry is vigorously fighting the cuts from sequestration that will take effect in January and is protesting the impact on jobs and the economy. Shortly before the November elections, defense contractors plan to send official notices to many of their workers that their jobs may be terminated next year. Those contractors back the House-approved bill that would change the sequester by making all of the cuts in non-defense spending.  (Read more about the plans to increase defense spending in an interesting NY Times column published yesterday.)

It’s true that defense jobs are at risk, but the same is true for jobs in education, child welfare, health care and numerous other fields. The employment losses in those areas could grow much larger if Congress merely shifts the cuts elsewhere, rather than adopting a balanced approach to deficit reduction that includes revenue increases as well as spending cuts.

The question of whether to shift defense cuts onto other areas, such as Medicaid and spending for kids, is likely to get more attention because of a statement made by Rep. Ryan last week. According to today’s Washington Post, “Paul Ryan said Thursday that if Congress fails to pass legislation averting $500 billion in automatic defense cuts set to take effect in January, a Romney-Ryan administration would work to undo those cuts ‘retroactively’.”

We’ll continue to monitor this issue closely in the coming months.

Jon Peacock

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