By Liz Ritonia
The boys (and girls) are back in town, and it’s time to get down to business. On Friday, March 1, federal spending could be cut, totaling $1.2 trillion over the next decade, and federal agencies will receive an automatic 8.2 percent cut unless Congress develops a deal to avoid the so-called sequester adopted during the 2011 debt ceiling talks. Can a deal be reached? With the deadline looming on the horizon, here’s a look at how sequestration could affect the four focus areas of WE Public Affairs: Energy & Environment, Technology & Products, Health & Wellness, and Economy & Business.
Energy & Environment: The sequester could limit state clean and drinking water programs, force the shutdown of critical air pollution monitoring sites, and obstruct the process that ensures new motor vehicles meet emissions standards. The automatic 8.2 percent cuts to the Environmental Protection Agency, Department of Energy and Department of the Interior could lead to fewer cleanups at sites contaminated by leaking underground storage tanks; one thousand fewer inspections for toxic air emissions, water discharges and other sources of pollution; $6 million in cuts to safety and oversight of offshore drilling; and limited assistance to low-income families making their homes more energy efficient. Across the board, the cuts will trim grants for clean-energy projects, delaying the creation of wind, solar and biofuel technologies that rely on federal assistance for funding.
Technology & Products: The president’s executive order on cybersecurity and Congress’ recognition of the threat have led to a widespread belief that funding for cybersecurity may be safe. Unfortunately, with the National Institute for Standards and Technology — the agency charged with bringing stakeholders together to develop voluntary standards to help prevent cyberattacks — facing $38 million in cuts from sequestration, progress on cybersecurity may be delayed. The manufacturing industry is predicted to experience the largest job losses because of the sequester. With big contractors such as Northrup Grumman relying on the federal government for as much as 90 percent of their business, the potential cuts could require these manufacturers to expand into commercial sectors.
Health & Wellness: Healthcare professionals predict that the 2 percent cut to Medicare resulting from sequestration will cost the industry more than 200,000 jobs over the next year. In the Food and Drug Administration, the automatic 8 percent cut could lead to delays in the approval of new drugs and medical devices and increased instances of food-borne illnesses due to decreased capacity for food-safety inspections. Sequestration will also affect the president’s healthcare law. Grants to help states establish insurance exchanges will be cut by $66 million, and the law’s prevention and public health trust fund will be cut by $76 million. The automatic cut to the National Institutes of Health would amount to $2.5 billion this year, which may let hundreds of research grants go unfunded and cost the country 20,000 federal and private sector jobs.
Economy & Business: The automatic spending cuts across government agencies mandated by the sequester could cost the U.S. economy more than 2 million direct, indirect and induced (dependent on the payroll spending) jobs, decrease personal earnings of the workforce by over $109 billion, and reduce the GDP by $215 billion. For workers who have kept their jobs, the government will likely implement furloughs, during which time workers will take up to 22 days of unpaid leave, and it will be the first time employees see no chance of the lost pay being recovered.
Back from recess this week, party leaders are expected to introduce proposals to avoid the drastic spending cuts mandated by the sequester, but slow movement from both sides of the aisle may indicate another 11th-hour resolution or confirmation that the public will continue to feel the effects of partisan gridlock.
Photo credit: Tax Credits