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Sequestration Cuts to Affect Military, Veterans, and the Disabled

By February 12, 2013

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The sequestration that is looming largely over many people's heads, threatening to drop like a guillotine, includes numerous cuts to a variety of organizations. One of the largest cuts will affect the military, which includes a growing segment of the population returning from the war, veterans. Other groups include the disabled and the numerous entitlement programs that they depend on.

According to the Center on Budget and Policy Priorities, sequestration consists of the following:

"Under the formula that the Budget Control Act specifies, defense programs would be cut by a total of $54.7 billion each year from 2013 through 2021, with non-defense programs cut by the same amount. Together, these program cuts total $109.3 billion per year, or $984 billion through 2021. Although this is less than the $1.2 target specified for the Joint Committee, the savings in interest payments that the sequestration would produce, which is estimated at $216 billion using a ratio specified in the legislation, would count toward the $1.2 trillion target.

The $54.7 billion in annual non-defense cuts would come from both mandatory (entitlement) and discretionary programs. The mandatory cuts would include:

  • Cuts in Medicare payments to providers and insurance plans (those cuts are limited to 2 percent of such payments in any year, or about $10.8 billion in 2013).
  • About $5.2 billion in cuts in the other mandatory programs that are subject to sequestration, the biggest of which is farm price supports. A number of key mandatory programs are exempt from sequestration, including Social Security, Medicaid, CHIP, SNAP (formerly known as the Food Stamp Program), child nutrition, Supplemental Security Income (SSI), refundable tax credits such as the Earned Income Tax Credit, veterans' benefits, and federal retirement.

Thus, in 2013 about $16.1 billion of the $54.7 billion in annual non-defense cuts would come from mandatory programs. This share would grow from year to year, reaching $22 billion by 2021. The remaining non-defense cuts -- about $38.6 billion in 2013 -- would come from discretionary programs."

Unfortunately, all we can do is wait and see if the President can work with both parties to create a budget that everyone can agree upon. Leading from behind on this important issue should not be an option, as it is akin to being a spectator who has no skin in the game.

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