By GREG RUSSELL, Register Staff Writer
Education and healthcare may be the local realms that withstand maximum impact following Friday’s decision by President Barack Obama and Congress to sequester the federal budget.
Projected spending cuts are $85 billion “across the board” during fiscal year 2013, with a plan to reduce the federal deficit by up to $4 trillion during the coming decade as part of the Budget Control Act of 2011.
This includes a 2 percent reduction of Medicare payments made to rural hospitals.
“That equates to about $100,000 a year,” said Randy Bacus, North Texas Medical Center (NTMC) chief executive officer. “Over the short term, we can manage the cuts. But over the long term, it will be a significant reduction in payments and we’ll have to find a way to offset it.”
Bacus said no financial compensation strategy is currently on tap among NTMC officials.
“Not today,” he said. “We’ll have to figure out something.”
Bacus cited a recent study by the National Rural Health Association that said roughly 200 rural hospitals are designated as “Medicare dependent” and will lose $1.3 billion of revenue through 2023.
The 2 percent reduction, the report said, will shift nearly 60 of those hospitals into a mode of loss rather than marginal profit.
“This number will continue to increase each year as margins continually get smaller,” the report said. “With each (rural) hospital averaging 280 employees, the resulting impact will put another 15,979 hospital jobs at risk.”
Less immediately tangible is the effect on local education. Gainesville Independent School District Superintendent Jeff Brasher said the sequestration appears forecast to produce an average $250,000 per year in cuts to his district, though he admitted Monday a more precise figure may not be known for months.
“It will have an impact,” he said. “It’s everything across the board, and so we prepare for the worst and hope for the best.”
Brasher said the reduction in federal funding for Gainesville ISD would certainly prompt a cut in operating budgets — though layoffs aren’t expected — and that whatever has to be done will be done.
“Through attrition, is how you handle that,” he said, also adding that no matter how much money is reduced, the district’s vibrancy will take a hit. “It’s counterproductive to the quality of education when they cut money, since you’re really cutting the level of programs that are funded. It affects teaching positions and support systems. And in looking at the budget, considering the hit we took from the state during the last biennium, and now this, it does create significant obstacles.”
Brasher also said the national problem at hand may have been avoided to some degree by aiming the budgetary scissors elsewhere.
“It’s the problem of wasteful programs at the federal level versus cutting things across the board, like here,” he said. “You still have wasteful spending in certain areas, and then the really important programs that need to be there are still crippled.”
Effects among other local areas
County Judge John Roane and Emergency Management Coordinator Ray Fletcher said they don’t yet know exactly how the cuts will affect federal funding opportunities in their jurisdictions.
“It wasn’t terribly well thought-out when they put it in place,” Roane said Monday. “For that reason, I’m not sure that anyone has a really in-depth prognosis.”
Fletcher, whose department receives Federal Emergency Management Agency reimbursements for equipment and storm shelters for eligible county residents, said all expected funding still remains unaffected.
“I don’t know of any impact that I expect,” he said. “As far as I know, any federal funding we are getting is still in the pipeline and has been, so we won’t be affected by this.”
National facts and estimates (content provided by political writer Tom Murse and Dallas Morning News)
Sequestration was used in the Budget Control Act of 2011 to encourage Congress to reduce the annual deficit by $1.2 trillion by the end of 2012. If lawmakers failed to do so, the law would have triggered automatic budget cuts to the 2013 national security budget.
A super Congress made up of a select group of 12 members of both the U.S. House of Representatives and U.S. Senate was chosen in 2011 to identify ways to reduce the national debt by $1.2 trillion over 10 years. The super Congress failed to reach an agreement, however.
Opposition to Sequestration
Some lawmakers who initially championed sequestration as a method of reducing the deficit later expressed concern at the programs that faced spending cuts.
House Speaker John Boehner, for example, supported the terms of the Budget Control Act of 2011 but backtracked in 2012, saying the cuts represented a "serious threat to our national security and must