In 2011, Congress passed the Budget Control Act to reduce the growing federal deficit. The law required the legislative body to develop and implement a ten year plan for cutting federal spending by $1.2 trillion that would take effect on January 1, 2013. If they failed to reach an agreement automatic spending cuts, known as sequestration, would take effect. Once it looked like Congress would miss the initial deadline, legislators extended their drop dead date until March 1st. The two Chambers failed to reach an agreement by that date as well and the spending cuts were enacted. For fiscal year 2013, federal spending was cut by $85 billion dollars with half of the reductions coming from non-defense programs.
Funding for most health care agencies was cut five percent cut. This meant a $1.55 billion cut in National Institutes of Health research funding and a $285 million reduction in program and activities spending at the Centers for Disease Control and Prevention were reduced by $285 million. Funding for the Food and Drug Administration was cut by $210 million. This was also controversial, since it included $85 million in private sector user fees to expedite FDA reviews. Medicare was unique in that its spending reductions were primarily directed towards health care providers, such as clinical laboratories, which received a two percent cut in payments. These provider cuts exceeded $10 billion for the year.
Sequestration may not be over, however. Congress is required to cut federal spending by $109 billion (divided equally between defense and non-defense programs) in 2014. If legislators are once more unable to enact a budget agreement that targets the cuts, health agencies such as NIH, CDC, and the FDA would be subject to even larger cuts in funding – 7.3 percent – than this past year. Medicare providers would still be capped at a two percent cut in provider payments.
Over the past few months, we have heard of the impact of sequestration on government agencies, such as furloughs of personnel, restrictions on hiring, cuts in the research grants, limits on government travel and participation in scientific meetings, and cutbacks in program activities. Now we would like to hear from you and how these cutbacks have affected your laboratory operations and what impact future reductions may have on your facility. Will these cuts result in staffing cuts, the scaling back or elimination of research projects, or your purchasing of new equipment? Let us hear from you how these government cuts are affecting you and your laboratory.