Governing magazine: State and local government news for America's leaders

With Sequestration Looming, Governors Make Their Case in D.C.

Programs for the poor are of particular concern.
by | February 22, 2013

With big, automatic federal spending cuts set to take effect in just a week, the country's governors are urging federal lawmakers to change course.

About 49 governors of U.S. states and territories are in Washington Friday through Monday as part of an annual meeting of the National Governors Association. The timing coincides with growing anxiety about the automatic spending, known as sequestration, set to take effect March 1.

The approximate 5.8 percent cuts to some federal programs is the result of an agreement made among federal lawmakers in 2011 as part of a debt ceiling compromise. The idea was that the automatic cuts would be seen as so onerous that Congress and the White House would be forced to come to some sort of solution to avoid them. So far, that hasn't happened

Several governors met with President Barack Obama Friday, and more are scheduled to meet with him on Monday. Many governors are also spending the coming days meeting with congressional leaders. Delaware Gov. Jack Markell, chairman of the National Governors Association, said their message to Washington is clear: lawmakers should keep in mind how their decisions impact states.

For states, sequestration's impact isn't necessarily obvious. About 82 percent of federal funding that's most important to states is actually exempt from the automatic cuts, according to Federal Funds Information for States, which tracks how federal budget decisions impact states.

That's because Washington lawmakers had the foresight to exempt things like Medicaid and the Children’s Health Insurance Program from sequestration. Notably, big parts of the federal transportation program are exempt from the cuts too.

But governors say they're still fearful of the impact to other key programs that often don't get big headlines.

Markell, speaking with reporters Friday, outlined the state programs likely to face the biggest impact of the cuts. Those include special education programs and Head Start; the Women, Infants and Children program that provides nutritional assistance to poor families; the Low Income Home Energy Assistance Program, which helps the poor pay for heating and cooling; programs that address substance abuse prevention; and various workforce and vocational training efforts.

"This is not some theoretical number you toss up in the air," Markell told Governing. "This is impacting real people, vulnerable people."

"For many of us, our state budgets are significantly challenged," Markell continued. "We're not really in a position to say 'we're going to supplant with state funds.'"

Oklahoma Gov. Mary Fallin, the association's vice chair, said she's already instructed her department heads and cabinet secretaries to figure out where the state can cut money, in case the sequester does occur, in order to minimize its impact. She also reiterated the challenge that uncertainty about the federal fiscal situation puts on states as they try to manage their budgets.

(Detailed projections on the cuts of interest to states are available here).

She added that the culture of crisis and uncertainty in Washington is causing businesses to be more cautious with their investments. The initial debate about the debt ceiling -- which helped prompt the current boondoggle -- began almost two years ago.

Fallin expressed frustration shared by many governors: while state lawmakers across the country emphasize the importance of economic development, many fear that their work will be for naught if the larger economy takes a hit due to sequestration.

"On March 2, if this issue is not resolved -- or the can is kicked down the road and we just have more uncertainty -- it's going to hurt my economy, even though I've been working to create jobs," Fallin said.

Earlier in the day, several Democratic governors blasted Congressional Republicans, blaming them for the looming cuts and characterizing them as unwilling to compromise. But Republicans in Congress have characterized the Obama administration of being more interested in making public warnings about the sequestration than working with lawmakers to avoid it.

Fallin, a Republican, took a more measured approach and said all parties involved -- Republicans and Democrats in Congress, as well as the administration -- deserve blame for fostering a toxic political climate that had led to this point.

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