FY 2013’s never ending budget “quagmire”: The passage of the “fiscal cliff” bill January 1, which avoids large tax increases and postpones sequestration for two months, was important legislation which avoided potentially disastrous impacts to the US economy. However, it merely delayed resolution of critical funding levels for 2013 and the outcome is very much unknown as this report is finalized. Three fiscal threats are still on the horizon, any of which could force a crisis including the possibility of a government shutdown, federal furloughs, and massive cuts in programs which our schools depend upon. These disaster triggers include the need to raise the debt ceiling by mid-February, the looming sequestration now due to take effect March 1, and the expiration of the Continuing Resolution (CR) on March 27. At this point in time, we can share the following observations:
o The fiscal situation in DC for the next several months, and potentially for the entire fiscal year, is likely to be chaotic and unpredictable with every week bringing new challenges. Federal domestic agencies should begin releasing more detailed contingency plans for a possible sequester as early as next week.
o Despite attempts by senior Appropriations Committee leaders in the House and Senate, the chances for an Omnibus Appropriations bill being enacted to replace the “current rate” CR seem slim. A full year CR freezing agency base funding levels at the 2012 rate seems almost certain. There will be a few exceptions, but very few. NIH funding is the only program on our priority list which might get some relief, but even for NIH the chances are poor.
o In a turnaround from the prognosis a few weeks ago, sequestration, the process of across-the-board cuts mandated in 2011 by the Budget Control Act, now seems likely to occur in March. OMB issued initial sequester guidelines to agencies on January 14. Final estimates have not been issued by OMB but senior officials have indicated privately that a 5.7 to 6.4 percent cut to discretionary programs is their best current estimate. These savings must be achieved over a six month period. NIH would lose about $1.8 billion. Success rates likely would drop into the low teens, and all grants could be subjected to 10-20 percent across-the-board cuts. Draft guidelines for some departments call for furloughing all non-essential employees 4 days per month. Neither Republican nor Democratic leaders seem to view delaying sequester as a high priority, believing the cuts will create pressure for a deficit reduction deal. There is growing concern that the sequester cuts will be permanent.
o At some point during the spring, a serious attempt will be made to enact some relief from sequester cuts for critical programs. Defense programs in particular will be the focus of such an effort. However, relief for one program would likely result in larger cuts for other programs. Of particular concern is the proposal now circulating to soften the cuts for defense by increasing the level of the cuts to domestic programs.
o No information has been released indicating how much discretion agency officials will have in allocating sequester cuts among programs within their agencies. This is of critical importance. The ASPH advocacy priorities table at the end of this report indicates that an all year CR, even with sequestration, would leave most ASPH priorities intact even if at reduced amounts. These individual program levels are not specified in statute, however, and legally the executive branch could salvage their priorities by making deeper cuts in what they view as lower priority activities. The $70 million of program cuts in the President’s 2013 Budget request last February provides a starter list of where the risk is potentially the greatest.
FY 2014 outlook: Submission of President Obama’s 2014 budget has been delayed because of a late decision on 2013 funding, included in the “Fiscal Cliff” legislation discussed above. We have been told not to expect a formal request until mid-March. In addition, our contacts within OMB have indicated that the March request may only be an outline of a budget with details coming in April. The reason for this seems to be reluctance on the part of the Obama Administration to put a detailed 2014 request on the table during the macro deficit reduction talks. There is no reason to believe that the 2014 budget will be kinder and gentler for SPH priorities than previous Obama budgets, but we will not know the details for several months.
ASPH outreach to new Congress: As a follow-up to Dean Wyatt’s remarks on the last call, we are trying to increase the level of interaction between our deans and key legislators. The ASPH team created a draft template of a letter which we encourage all members of the ASPH Legislative Committee to send to their Senators and local Congressmen, as well as key Committee members in their states. We will be emailing the template separately after the January 24 call, along with a partial list of addresses of key legislators and an ASPH background document. The language each Dean uses is completely optional, and we expect either in the letter or in an enclosure that individual school data will be included.
ASPH Legislative Committee Congressional contacts matrix: The ASPH team also created a draft matrix matching ASPH Legislative Committee Deans with key House and Senate members, as well as a list of the grants for each school in areas on the ASPH priority list (PRCs, PHTCs etc.).
CDC Director Outreach efforts: On January 10, ASPH Chair John Finnegan and President Harrison Spencer spent a social hour with CDC Director Frieden, at his request. It was animated, very friendly and his staff later referred to the meeting jokingly as a mini-summit. Discussions continued with CDC staff after Dr. Frieden’s departure about opportunities for the agency to work more with Schools of Public Health.
Hill Day fly-in schedule: The delay in submission of the President’s Budget raises significant questions about scheduling the annual Committee fly-in. More details to come on this.
ASPH policy fellow update: ASPH 2012 Policy Fellow, Whitney Brown, who completed a year in the Office of Senator Al Franken in August, completed her mini-rotation in December with Congressman John Sarbanes, an emerging leader on public health and health financing issues. Whitney has moved to a permanent position doing advocacy work for the Academy of Nutrition and Dietetics. Mr. Sarbanes wrote a very thoughtful thank you letter to ASPH which has previously been shared with the Committee. This week the 2013 ASPH Fellow, Michelle Moses Eisenstein, began the second phase of her fellowship joining Congresswoman Barbara Lee’s office. Ms. Lee is a member of the important L-HHS-Ed Subcommittee.
For a link to the ASPH Priorities, as of January 2013, click here.