Sequestration went into effect on March 1, 2013, reducing federal spending for fiscal year 2013 by $85 billion. Congress included sequestration in the Budget Control Act of 2011 as a mechanism to force the U.S. House of Representatives and the Senate to come to an agreement on reducing the long-term federal deficit. Because Congress failed to adopt legislation that would prevent sequestration, several across-the-board spending cuts, many of them harmful to older adults, took effect on March 1st.
Sequestration makes automatic cuts to non-defense discretionary programs. While sequestration does not reduce Medicare, Medicaid or Social Security benefits, it does cut payments to Medicare providers by two percent and cuts many of the vital programs on which people with Medicare rely.
These reductions include:
- A $75 million cut to the Administration for Community Living (ACL), which administers nutrition programs, transportation services, family caregiver services and other programs under the Older Americans Act
- A $23 million cut to the Senior Community Service Employment Program (SCSEP), which enhances employment opportunities for unemployed older Americans
- A $175 million cut to the Low-Income Home Energy Assistance Program (LIHEAP)
- A $19 million cut to funding for Section 202 Housing for the Elderly
These devastating cuts will no doubt have a major impact on the economic security of middle- and low-income Medicare beneficiaries, who will have to spend more out–of-pocket on basic necessities, thus making it more difficult to afford health care. Half of all people with Medicare live on annual incomes of $22,000 or less and spend one-third of their household incomes on health care costs. Due to sequestration, already overburdened seniors will need to make difficult choices, such as whether to pay their heating bills or fill their prescriptions.
Read the National Council on Aging sequestration summary.
Read the Office of Management and Budget’s report to Congress on sequestration.
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