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Is Anything Safe From the Automatic Budget Cuts? Actually, a Few Things Are. Is Anything Safe From the Automatic Budget Cuts? Actually, a Few Thing...

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Congress

Is Anything Safe From the Automatic Budget Cuts? Actually, a Few Things Are.

Social Security payments will be spared from the sequestration cuts. (AP Photo/Bradley C. Bower, File)()

photo of Niraj Chokshi
February 27, 2013

Yes, the across-the-board cuts in federal spending that will begin this week are blunt. And it’s true they will affect many corners of the government. But big swaths of the government are safe. In fact, it’s a lot easier to identify what’s been spared the ax than what hasn’t, according to the nonpartisan Congressional Research Service.

The Budget Control Act of 2011, which created the automatic cuts, singles out the exempt programs but “provides no definitive list of programs or types of spending that would absolutely be subject to sequestration,” CRS reported in January (emphasis theirs). The White House Office of Management and Budget may have some leeway in implementing the cuts, depending on how it interprets the law, but it won’t be able to touch the programs specified as off-limits.

Programs that will be shielded include Social Security benefits, Veteran Affairs services, refundable tax-credit payments, some economic recovery programs, and some child-nutrition programs.

Here’s a selection, courtesy of CRS, of the government functions that will be spared when the cuts take effect on Friday:

  • “Social Security benefits (old-age, survivors, and disability) and Tier 1 Railroad Retirement benefits.
  • "All programs administered by the VA, and special benefits for certain World War II veterans.
  • "Net interest (budget function 900). [That is, interest payments on the federal debt.]
  • "Payments to individuals in the form of refundable tax credits.
  • "Unobligated balances, carried over from prior years, for nondefense programs.
  • "At the president’s discretion (subject to notification to Congress), military personnel accounts may be exempt entirely, or a lower sequestration percentage may apply.
  • "A list of 'other' budget accounts and activities; readers should consult the statute for a complete list. A few selected examples include:
    • activities resulting from private donations, bequests or voluntary contributions, or financed by voluntary payments for good or services;
    • advances to the Unemployment Trust Fund;
    • payments to various retirement, health care, and disability trust funds;
    • certain Tribal and Indian trust accounts; and
    • Medical Facilities Guaranty and Loan Fund.
  • "Specified federal retirement and disability accounts and activities.
  • "Prior legal obligations of the federal government in specified budget accounts.
  • "Low-income programs, including:
    • Academic Competitiveness/Smart Grant Program;
    • mandatory funding under the Child Care and Development Fund;
    • Child Nutrition Programs (including School Lunch, School Breakfast, Child and Adult Care Food, and others, but excluding Special Milk);
    • Children’s Health Insurance Program (CHIP);
    • Commodity Supplemental Food Program;
    • Temporary Assistance for Needy Families (TANF) and the TANF Contingency Fund;
    • Family Support Programs;
    • Federal Pell Grants;
    • Medicaid;
    • Foster Care and Permanency Programs;
    • Supplemental Nutrition Assistance Program (SNAP, formerly food stamps); and
    • Supplemental Security Income (SSI).
  • "Medicare Part D low-income premium and cost-sharing subsidies; Medicare Part D catastrophic subsidy payments; and Qualified Individual (QI) premiums.
  • "Specified economic recovery programs, including GSE Preferred Stock Purchase Agreements, the Office of Financial Stability, and the Special Inspector General for the Troubled Asset Relief Program.
  • "The following 'split-treatment' programs, to the extent that the programs’ budgetary resources are subject to obligations limitations in appropriations bills:
    • Federal Aid-Highways;
    • Highway Traffic Safety Grants;
    • Operations and Research NHTSA and National Driver Register;
    • Motor Carrier Safety Operations and Programs;
    • Motor Carrier Safety Grants;
    • Formula and Bus Grants; and
    • Grants-in-Aid for Airports.”

A handful of programs are to be treated under so-called special rules under sequestration. Those, according to CRS, are:

  • Student loans under Title IV-B and IV-D of the Higher Education Act;
  • Medicare;
  • Community and migrant health centers, Indian health services and facilities, and
  • Veterans’ medical care;
  • Child Support Enforcement;
  • Federal pay;
  • Federal administrative expenses;
  • Unemployment Compensation; and
  • Commodity Credit Corp.
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