Social Services, Food Stamps, Health Reform on the Chopping Block as Congress Looks to Stop Sequester

by Rebecca Farley on April 27, 2012

Rep. Dave Camp (R-MI) and Speaker John Boehner (R-OH)

In an effort to stop automatic spending cuts slated to take effect in January, six House committees are crafting plans to sharply reduce spending in the programs under their jurisdiction. The upcoming automatic cuts (also known as “sequestration”) were triggered by the Supercommittee’s failure to agree on a deficit reduction plan last November. Now, Congress must find a new way to make up the $1.2 trillion in cuts over 10 years, or face sequestration’s across-the-board cuts on January 1. The Republican House leadership has instructed the six committees to identify billions of dollars in savings both in fiscal year 2013 and over the course of the next 10 years. The cuts these committees are proposing fall heavily on healthcare and social services for low-income families.

Social Services Block Grant: In its reconciliation bills, the Ways and Means Committee voted to eliminate the Social Services Block Grant (SSBG). Representative Dave Camp (R-MI) made the case for SSBG repeal by arguing that there is a lack of accountability in the program and a lack of data on the people who receive services through it. The SSBG funds a wide range of programs to support low-income families, including mental health and addictions treatment in some states. Most notably, the fund was used to support mental health services in several Gulf states in the wake of Hurricane Katrina. 

Food Stamps: The Agriculture Committee has also completed work on its budget reconciliation bill, which proposes to  cut more than $33 billion over 10 years from the Supplemental Nutrition Assistance Program (also known as food stamps). These cuts would be achieved largely through changes to eligibility rules and constitute approximately a 4% cut to the program. A recent report from the Congressional Budget Office found that SNAP spending and participation reached record highs in 2011 and would remain high for many years to come as a result of the weak economy.

Health Reform: The Energy and Commerce Committee also reported its reconciliation bill this week, which included a total of $115 billion in cuts for 2013, largely achieved by repealing substantial portions of the Affordable Care Act. The Committee’s proposals include eliminating the Prevention and Public Health Fund, limiting future federal funding for state-based health insurance exchanges, and defunding the Consumer Operated and Oriented Plan program (CO-OP), which will provide government-subsidized loans to qualified non-profit health insurance plans. The Committee also approved a repeal of the reform law’s Medicaid Maintenance of Effort provision, which prevents states from cutting their Medicaid rolls between the passage of the law and the rollout of the Medicaid expansion in 2014.

The National Council signed on to a letter by the Partnership for Medicaid urging the Energy and Commerce Committee to reject these proposed spending reductions. Our letter notes that the Committee’s proposals would cut Medicaid spending by more than $25 billion over the next ten years. It would also reduce health care coverage by repealing health insurance Exchange funding. These cuts would shift costs onto both states and safety net providers and would hurt vulnerable Medicaid patients’ access to care.

The six committees’ plans will be combined into a single budget reconciliation bill, a special tool that Congress can use to adjust federal spending that is beyond the reach of the regular appropriations process. Reconciliation may be the last legislative route this year by which health reform opponents can repeal major portions of the Affordable Care Act. During the last two years, opponents have repeatedly introduced legislation in the House to nullify or defund the health law – yet their efforts have consistently been blocked in the Senate, where 60 votes are required to overcome a filibuster. Budget reconciliation bills are considered under relaxed procedural rules that allow for quicker-than-usual consideration by each chamber and need only a majority of votes in the Senate for passage.

This is the fourth article in this week’s series on the 2013 budget. Click to read our Editor’s Note from blog manager Rebecca Farley, along with our coverage of  the 2013 appropriations process and threats to the Prevention and Public Health Fund.


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