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View from the Hill

View from the Hill

Monday, September 16, 2013 Author: Andrew Kessler Categories: View from the Hill
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In the spring of 2011, the eyes of the entire nation were on Washington as Congress debated whether to raise the debt ceiling. In the end, a compromise was reached in the form of the Budget Control Act, or BCA. This gave birth to the Supercommittee, comprised of three Democrats and three Republicans from each chamber, charged with finding $1.2 trillion in cuts over the next 10 years. If the committee failed to meet the deadline laid out in the BCA, something called sequestration would automatically kick in, resulting in 7-8% cuts in all discretionary government spending, to begin on January 2, 2013.

To no one’s surprise, the Supercommittee was unproductive and failed to recommend a plan of action. This means that as of January 2, sequestration is slated to become a reality. Yet the general public is blissfully unaware of the catastrophic impact on government services the sequester will have. Substance abuse treatment and prevention, which is heavily reliant on government funding, faces cuts that can be highly detrimental to both consumers and to those who provide these services.

To be clear, substance abuse is not alone on the chopping block. In fact, quite the opposite: it will have plenty of company. Government funding for transportation, agriculture, education, health, justice and just about anything else you can think of also faces tremendous hardship if sequestration comes to pass. However, for the purposes of our readership, substance abuse is what we care about.

The federal budget for domestic spending is usually looked at in two large chunks: defense spending and non-defense discretionary spending (NDD.) NDD includes every domestic program you can think of that lies outside national security interests. From roads to schools to national parks, all are funded from the NDD pool. The sequester, in its original form, was scheduled to hit both the military and NDD programs.

However, as we creep closer to the sequester deadline, several politicians are insisting that our nation cannot afford to cut the military budget. If they are successful, and shift the burden of the sequester entirely to NDD programs, the results for the treatment field would shift from perilous to catastrophic. NDD spending already has absorbed significant reductions through the 10-year spending caps in the Budget Control Act and other measures. By 2021, this category of spending will account for just 2.8 percent of the U.S. gross domestic product, its lowest level in more than 50 years. Today, NDD programs comprise about 1/6th of the Federal budget.

Now that the election is over, many in Washington (and the rest of the United States) are wondering what its impact will be on budget negotiations. Of course, the sequester is only part of a larger budgetary issue, the so-called “fiscal cliff.” While the fiscal cliff has been a media boon, it is of course an incredibly complex and delicate issue. The sequester has become a bargaining chip in negotiations to avert the fiscal cliff, or as some in Washington are saying, the situation is more akin to a fiscal slope. Regardless of the terminology, Congress and the White House are juggling with economic hand grenades, and the sequester is a very large grenade with the pin already pulled.

There are several possible scenarios unfolding. One possibility, regarded as highly unlikely, is that the lame duck session of the 112th Congress will address the sequester and propose a solution, with a combination of increasing revenues and spending reductions. Another possibility, slightly more realistic, is that during the lame duck session, Congress will “kick the can,” postponing the sequester for three, six, or even 12 months. Another aspect of the budget, though not necessarily part of the “fiscal cliff,” is the FY 2013 budget, which has yet to be enacted (three months past due) and is being funded by a continuing resolution through March 31, 2013. This means that funding for all budgetary items, including SAMHSA, NIDA, the Department of Justice and other federal programs responsible for substance-abuse treatment and prevention are being funded at 2012 levels for the time being. Yet, since not many domestic substance-abuse treatment and prevention programs have been scheduled for increases in 2013, there is not much funding being lost.

Carnevale Associates, a public affairs and research firm based in Bethesda, Maryland, issued a report earlier this year that illustrated what the impact of the sequester would be on all drug programs. Because of the way the budget is structured, different areas of drug control and treatment will be impacted by the sequester differently. For example, 56 percent of a dollar reduction in direct appropriations would be cut from demand-reduction programs, compared to 44 percent from supply-reduction programs. Prevention is most affected: About 78 percent of the total $1.7 billion requested for prevention is identified in an appropriation bill and would therefore absorb the full effect of a sequester.

In order to illustrate the impact of the sequester as clearly as possible, Senator Tom Harkin (D-IA) recently issued a 181-page report, pointing out what cuts would mean for various programs in terms of the amount of services that would be lost. Substance-abuse treatment and prevention funding was given its own section in the report. The Substance Abuse Prevention and Treatment Block Grant, administered by SAMHSA, provides formula-based grants to States for the provision of treatment and recovery support services for individuals and families affected by alcohol and drug addiction. In fiscal year 2011, this program funded approximately 2.1 million admissions to substance-abuse treatment programs. Research has found that every $1 spent on quality treatment can deliver a return of $12 or more in reduced substance-related crime and criminal justice and health care costs. If the sequester stays in place, it is calculated that there will be 169,375 fewer admissions to treatment.

Take California as an example: that state alone would lose close to $20 million in federal substance-abuse treatment dollars, costing the state almost 15,000 treatment admissions. It also stands to lose more than $1.3 million in HIV prevention funding, and just short of $10 million for the AIDS Drug Assistance Program.

As the calendar inches closer to the sequester, other lawmakers in addition to Harkin are starting to become more aware of its potential impact. In late July, the Senate cleared a bill that would pressure the Obama administration to detail how federal agencies would implement sequestration at the beginning of next year. The bill (HR 5872/S. 3228), cleared by unanimous consent, would require the White House to produce a report within 30 days explaining how the $109 billion in cuts scheduled to hit on January 2 would affect both domestic and defense programs. The House passed the bill July 18, and was written by Jeb Hensarling (R-TX). There were 56 co-sponsors of the bill on the House side. In the Senate, close to a third of all senators cosponsored the bill, which was introduced by Senator John Thune (R-SD). The White House complied, but its report revealed little new information.

The Coalition for Health Funding represents the entire spectrum of public health advocacy, from research to prevention to treatment. Its executive director, Emily Holubowich, has been focused on the sequester for more than a year. “Really, all public health ‘programs, projects, and activities’ are subject to the cuts,” she explained. “From immunizations to chronic disease prevention, laboratory capacity to training grants, health research to food safety, and of course substance-abuse prevention and recovery programs. Public health is already feeling the strain of cuts in federal and state funding. Another 8-10 percent would be the knockout punch.”

CHF has joined with other groups to form an even larger coalition, in an attempt to spare NDD spending from bearing the full brunt of the sequester. It would be its preference to avoid a sequester altogether, but short of that, the mission is to illustrate how public health and other government services are every bit as critical to the safety and prosperity of our nation as defense spending is. As Senator Harkin has pointed out, the job of a defense contractor is no more important to our nation than the job of a teacher.

Or than that of someone who works in the treatment and recovery arena, for that matter!

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