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Second Opinion

Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

Washington Highlights

House Budget Committee Holds Hearing on Sequestration

April 27, 2012—The House Budget Committee held an April 25 hearing to discuss replacing the sequester, the set of $1.2 trillion cuts over 10 years, mandated in the Budget Control Act (BCA, P.L. 112-25) because the “Super Committee” was unable to identify the required savings [see Washington Highlights, Aug. 5, 2011]. The committee heard testimony from Daniel Werfel, controller, Office of Federal Financial Management, Office of Management and Budget (OMB), and Susan Poling, deputy general counsel, Government Accountability Office (GAO).

In his opening remarks, Chair Paul Ryan (R-Wis.) said the “sequester will take effect, and we will see abrupt indiscriminate cuts in government spending, unless we act.” Ranking Member Chris Van Hollen (D-Md.) echoed the chairman’s sentiments by saying, “There is no question that we need to reduce our deficit—and I think we all agree that the BCA’s slash-and-burn approach does not make sense for our country. These cuts would be too deep and too arbitrary.”

The budget resolution (H.Con.Res. 112) adopted by the House March 29 with only GOP support [see Washington Highlights, March 30] replaces the sequester with reconciliation instructions to six House committees, including the House Ways and Means Committee and the House Energy and Commerce Committee. The Ways and Means Committee approved its $53 billion plan April 18 [see Washington Highlights, April 20], while the Energy and Commerce Committee approved its plan April 24 and 25 (see related story). However, moving forward with reconciliation requires similar actions in the corresponding Senate committees, and the Senate has not adopted an independent budget resolution.

Daniel Werfel told the committee that OMB will be prepared to implement the sequester if Congress does not find alternative savings, but emphasized that the administration hopes Congress comes together in a bipartisan fashion to avoid it. Mr. Werfel added that the president is ready to “roll up his sleeves” and work with Congress on the issue.

However, many Republicans on the committee expressed concerns about not having the final list of programs that will be exempt from the sequester and argued that Congress cannot plan accordingly without having the full list. Again, Mr. Werfel emphasized the administration hopes to avoid sequestration and noted that he will submit the list when it is available.

Regarding the indiscriminate nature of the sequester, Rep. Marcy Kaptur (D-Ohio) said, “We don’t need meat-axes in this country. We need to grow this economy and not give any more bad starts to harm growth.” Rep. Kaptur then asked Mr. Werfel to describe how individual non-defense discretionary programs would be affected by sequestration.

In his response, Mr. Werfel told the committee that “at the NIH the number of grants awarded would be cut by 700, slowing research that would lead to new treatments to cure diseases such as cancer and Alzheimer’s. The National Science Foundation would have 1,650 fewer competitive basic research and education grants supporting almost 20,000 researchers, students, and teachers.”

Contact:

Alexandra Khalife
Legislative Analyst
Telephone: 202-828-0418
Email: akhalife@aamc.org

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org