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10:16 pm
Thu April 4, 2013

Sequester Scorecard: A Month Later, Effects Still Up In Air

Originally published on Fri April 5, 2013 5:09 am

Automatic federal budget cuts that kicked in March 1 have had little initial impact in many parts of the government. For a few programs, however, the effect has been real and painful, as the government begins cutting $85 billion from its spending through the end of September.

Many of the earliest signs of the cuts are being seen on the local level, in state programs like education that rely in part on federal dollars.

By law, furloughs for most federal employees could not begin before April, so it's still early in the process. President Obama is taking a 5 percent pay cut, voluntarily returning $20,000 of his $400,000 annual salary to the U.S. Treasury in solidarity with furloughed federal workers. New Defense Secretary Chuck Hagel and a top deputy are taking cuts as well.

Congress stepped in to ease the pain a bit for the Defense Department, but its looming cuts remain deep.

A half-dozen NPR reporters spoke to Morning Edition about what they're seeing so far in the areas they cover. Here's a look at some things we do know, a month into sequestration:


Education

Head Start programs have already had to slash 5 percent from their budgets, totaling about $406 million. Some programs are shutting down earlier in the day. A few may have to shut down for the summer, posing a big problem for poor working parents. Others have found ways to cut without hurting families.

One Head Start program in Tampa, Fla., stopped contributing to its employees' retirement funds so that the program could continue running normally.

School systems that receive federal Impact Aid are getting hit hard, too. These districts can't rely on local property taxes to fund schools because they're on federal government land or near big military bases. Federal funding is especially crucial for them.

Universities will soon see cuts in government-funded research. Education Opportunity Grants for low-income students and federal work-study programs on college campuses are losing a combined total of $86 million. Pell Grants are exempt.

Most federal aid to schools is forward-funded, so the cuts triggered haven't really hit K-12 yet. But the American Association of School Administrators is projecting that by fall, 78 percent of school districts will have to lay off teachers and staff and slash teacher training and after-school programs.

Special education, a huge expense for schools, will lose physical therapists and speech therapists.

-- Claudio Sanchez


Military

Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, says it will be another week before the military has a better handle on its $41 billion in cuts, but already the Pentagon says it will harm what the military calls "operational readiness," meaning that a particular unit is trained and equipped at the highest level to accomplish its mission.

That means some Army units won't be heading to the sprawling desert-training center in the Mojave Desert, that Navy pilots in the U.S. will cut back on their flying hours and sailors will not go on training cruises. The Army says that it will very likely delay maintenance of vehicles and aircraft at its depots in Anniston, Ala., and Corpus Christi, Texas.

It is also expected to affect shipyards, but not as much as first thought. The Navy says some of the extra money from Congress means it will refurbish the aircraft carrier USS Abraham Lincoln, in Newport News, Va.

The cuts will not affect the war effort in Afghanistan.

-- Tom Bowman


Aviation

About 149 towers at small- and medium-size airports have received notice they'll be losing their funding to hire private air traffic controllers. The Transportation Security Administration says there will be furloughs of its officers at airport security checkpoints, but those furloughs haven't begun yet, so it's unclear what kind of delays travelers will face this summer. The same can be said of the air traffic controllers employed by the Federal Aviation Administration.

-- Brian Naylor


Justice Department

Attorney General Eric Holder said he has shifted around about $150 million to avert furloughs for corrections officers in the nation's overcrowded federal prisons. Holder also has signaled he is trying to stave off other furloughs at the Justice Department itself.

But huge federal grant programs that help fund law enforcement initiatives, training and things such as anti-drug task forces in state and local areas will take a hit, approximately $100 million in cuts, according to DOJ officials.

Another area that's suffering is the nation's federal public defender system, considered a crown jewel program to defend poor people accused of crimes. Those offices represented more than 200,000 people last year, but there are signs the defenders will be forced to take on fewer clients because some lawyers will face furloughs of up to a month.

-- Carrie Johnson


Health And Science

Science and health agencies are taking a hit under the sequester — but those feeling the pain most directly will be recipients of the research grants the agencies distribute.

The National Institutes of Health, for example, is cutting an estimated $1.6 billion from its budget through the end of the fiscal year. A letter to all NIH grant recipients warned that current funding could be reduced or grants not renewed for next year.

Meanwhile, the National Science Foundation is estimating that cuts will force it to reduce the number of new grants by 1,000.

Even Medicare providers, which were supposed to be spared most of the pain of the sequester by having cuts limited to 2 percent, are complaining. Cancer doctors say that because of the way Medicare pays for cancer drugs, they may have to send patients currently getting cancer treatment as outpatients back to the hospital, thus raising costs for everyone. That, however, is almost exactly what those doctors said the last time Medicare changed what it paid for cancer drugs.

-- Julie Rovner


Internal Revenue Service

The agency is affected, but it says that refunds won't be for those who are getting them. The IRS is delaying the furlough of employees until the summer.

But the IRS already has about 5,000 fewer workers than two years ago. Both the IRS and the union that represents its workers say they're already seeing long wait times on the tax customer hotline, and very long wait times at the Tax Assistance Centers that tend to help a lot of lower-income families.

The Treasury Department also points out that because of the sequester it won't be able to audit as many tax returns or investigate as many fraud cases.

-- Yuki Noguchi


National Parks

Some parks are announcing delayed openings this spring, and many say they will not be hiring summer staff or will keep some campgrounds closed. But in an interesting example of the private sector stepping in, businesses and local governments around Yellowstone National Park came up with the money to pay for the plowing of some of the park's mountain roads so it could open on schedule.

-- Brian Naylor


Meat Inspection

Agriculture Secretary Tom Vilsack warned earlier in the year that he'd have to furlough meat inspectors and that would mean some meat-processing plants would be forced to close. That would have all kinds of repercussions affecting plant employees and farmers because a processing plant can't open if an agriculture inspector isn't on site. So last month, when Congress was finalizing spending for the rest of this fiscal year, it put money back into the Department of Agriculture budget, so those furloughs won't occur after all.

-- Brian Naylor

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

DAVID GREENE, HOST:

This is MORNING EDITION, from NPR News. Good morning. I'm David Greene. Well, we are now into April. It's time for baseball, taxes and some belt tightening. Automatic spending cuts - known as the sequester - have kicked in. These are the across-the-board budget cuts imposed when Congress and the president couldn't agree on any other way to reduce spending.

We heard some ominous warnings that the sequester would close national parks, shut down medical research, interrupt meat inspections, and even put some air traffic controllers out of work. This is affecting practically every part of the federal government, which explains why I'm joined by quite a team of NPR correspondents - Brian Naylor, Tom Bowman, Julie Rovner, Carrie Johnson, Yuki Noguchi and Claudio Sanchez. Good morning to all of you. I have not interviewed a group this big since the cast of "Downton Abbey," I don't think.

TOM BOWMAN, BYLINE: Good morning, David.

BRIAN NAYLOR, BYLINE: Good morning, David.

JULIE ROVNER, BYLINE: Hey, David.

GREENE: Brian Naylor, let me begin with you. You've sort of been taking the broad view of this. What are you seeing so far?

NAYLOR: Well, there have been some small impacts, but it's still early days. One reason we haven't seen very much is because the federal government wasn't allowed to send out furlough notices until the start of April. And so a lot of the employees who will be affected are still on the job. There have been notices that have gone out to some 149 small- and medium-sized airport control towers. The private contractors that provide the air-traffic control services are going to be let go. Those towers are going to have to close. Some of the national parks have announced that they're going to delay their openings, or they won't be hiring. But in other ways, we haven't seen much of an impact.

GREENE: Let's talk about an agency in the government which is going to be very busy in this month of April. Yuki Noguchi, NPR's business correspondent, it's tax time. Is the IRS going to be slowed down?

YUKI NOGUCHI, BYLINE: The agency is affected, but it says that refunds won't be - for those who are getting them. The IRS is delaying the furlough of its employees until the summer months. But the IRS is already working with 5,000 fewer workers than two years ago. So this means that the union that represents its workers, and the IRS, say that there is going to be longer wait times on the customer hotlines, and very long waits at the tax assistance centers that tend to help a lot of lower-income families.

Now, one of the arguments that the IRS made against the sequester is that it won't be able to investigate as many tax returns, or investigate as many fraud cases so it's effectively, counterproductive. It will lose the government money, in the form of lost tax revenue. That's what they argue.

GREENE: Tom Bowman, you cover the Pentagon. Normally, when we talk about defense cuts, there are lawmakers who say, "over my dead body." But some defense cuts are involved here. What are we seeing?

BOWMAN: The Pentagon did get some relief from its friends on Capitol Hill - a bit more money to cushion the blow. So now, the military has to cut about $41 billion this year rather than the expected 46 billion. And that means fewer furlough days for civilian workers. The bad news for the Pentagon is, it looks like the cuts will hit what's called readiness. Now, that means U.S.-based fighter pilots will get fewer flying hours; delays in fixing everything from helicopters to tanks. So the Pentagon could be forced to rewrite contracts or postpone contracts, and that could affect defense workers in places like Alabama and Texas.

GREENE: So could that affect the war effort in a place like Afghanistan?

BOWMAN: No, it won't affect the war effort in Afghanistan because troops heading over to Afghanistan will get the training needed. The troops in-country will get the equipment they need, the training they need, everything they need.

GREENE: Let me turn to you, Claudio Sanchez; you cover education for us. We heard a lot about potential cuts. One of them that alarmed a lot of people was that Head Start was going to lose 70,000 slots. Is that happening? Are families facing that?

CLAUDIO SANCHEZ, BYLINE: That's true, David. Head Start is a good example of how hard sequestration has hit some education programs across the country. Head Start programs have already had to slash 5 percent from their budget, totaling about $406 million. Some programs are shutting down early in the day; a few may have to shut down for the summer, posing a big problem for poor, working parents. Others have found ways to cut without hurting families. One Head Start program in Tampa, Fla., for example, is not contributing anymore to their employees' retirement fund so that the program can continue running normally.

GREENE: Brian Naylor, let me bring you back into the conversation, briefly. I know some of the predictions have simply not been rolled out yet. But some were undone at the end of March, when Congress passed a new spending plan for this current fiscal year.

NAYLOR: Yeah. The biggest exception is with the meat inspectors. At the beginning of this process, Agriculture Secretary Tom Vilsack was saying, we're going to have to furlough meat inspectors. And that meant because federal law requires an inspector be on site, that a lot of the meatpacking and processing plants would have to close for the time when there were no inspections. So what Congress did last month, when they actually passed the budget for the rest of the fiscal year, is they gave the ag department more money - they redirected some funds so that they wouldn't have to lay off those meat inspectors. And I guess it's a tribute to the power of the meat lobby that they were able to do that because virtually every other agency has been unable to get any exemptions.

GREENE: But we should be clear about this - once cuts are imposed, the agencies don't have much discretion.

NAYLOR: That's right. They have no discretion, and it's been a big problem. I spoke to a budget expert, Stan Collender. He worked for both the House and the Senate budget committees, and he's very blunt about the way this was brought about. Let's hear what he had to say.

STAN COLLENDER: This is the silliest, stupidest, most inane possible way to cut the budget. You know, it doesn't allow for priorities. It maintains programs at some level that you might want to wipe out completely, and doesn't allow you to meet needs in other areas. So from every possible, imaginable angle, this is just not the way to do this - although it's the only way that we could probably get it done, politically.

GREENE: That's blunt.

NAYLOR: Yeah, that's blunt. And politically - you know, ironically or maybe cynically - both sides, Democrats and Republicans, see this as kind of a good issue for them. The Republicans can say, hey, we trimmed $85 billion from spending this year. And that's good news for their base. Democrats can say, hey, look at those Republicans; they cut $85 billion from programs like Head Start and national parks...

GREENE: Which might be why we're here, if both sides are seeing some political benefit in doing this.

NAYLOR: Yeah.

GREENE: Julie Rovner, our health policy correspondent, are the health and science agencies in the government seeing this as silly and stupid - or how are they responding to these cuts?

ROVNER: Well, I think the big research agencies, of course, are not really full of bureaucrats who do things for people. They're full of people who give money to other people, particularly the National Science Foundation, National Institutes of Health. So they get to write letters and say, all the money we've been giving you? We're not going to be giving you all that money anymore. The National Science Foundation says that they're going to have to be reducing a thousand research grants, impacting 12,000 people. That's just because of this sequester.

On the health care side, Medicare was supposed to be a special case with the sequester. They were limited to a cut of 2 percent; that wasn't supposed to hurt very much. But in some ways, they're having effects that were unintended. We're hearing, for instance, from the cancer doctors. They say that because of the odd way that Medicare pays for cancer drugs, they may end up having to tell patients who are getting cancer care in outpatient settings that they will end up having to go back to the hospital to get their cancer care; which ironically, could end up costing the Medicare program more.

GREENE: Not the intent.

ROVNER: Not the intent.

GREENE: Carrie Johnson, you cover the Justice Department. You know, there was a 50th anniversary just last month for the big Supreme Court ruling in the famous Gideon case, that said criminal defendants are entitled to a lawyer even if they can't afford one. Is that promise in jeopardy, and is the sequester part of the reason why?

CARRIE JOHNSON, BYLINE: David, everyone seems to agree the public defender system is in crisis. And the biggest irony here is that on the 50th anniversary of the Gideon ruling, the federal public-defender system is taking a huge hit. Their biggest expense is salaries and personnel, and so there's just not very much for them to cut with sequestration. I'm hearing from public defenders that some of their staff are going to be taking up to a month of furlough days. Some judges, and some courthouses, are canceling court on Fridays - or at least, every other Friday - because if you don't have a defense lawyer for an indigent person in a criminal case, you can't have a court session.

GREENE: All right. We've gotten a broad picture here of a lot of what is happening with the sequestration. Brian Naylor, is the sequester going to end, at some point?

NAYLOR: No, not unless there's a remarkable sea change in attitudes about this. And in fact, what Congress did when they enacted this plan that put the sequester in place, they also put in spending caps for the next several years. So as far as the eye can see, these cuts - or this level of spending - will be the new norm.

GREENE: We'll be listening to all of your reporting as the sequestration goes on. NPR's Carrie Johnson, along with Julie Rovner, Claudio Sanchez, Tom Bowman, Yuki Noguchi and Brian Naylor, thank you all for coming in.

(SOUNDBITE OF MUSIC)

GREENE: On a Friday, you're listening to MORNING EDITION from NPR News. Transcript provided by NPR, Copyright NPR.