Jobless, cities could be first to feel budget pain

Published on NewsOK Modified: February 25, 2013 at 5:38 pm •  Published: February 25, 2013
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Bill Hoagland, a former top Republican Senate budget aide and now senior vice president at the Bipartisan Policy Center, a Washington think tank, said the administration must be "betwixt and between" when it comes to addressing reductions in programs like jobless aid.

"They want to make sure the American public knows this sequester is a bad thing, but they also don't want to disrupt the economy too much," he said. "It's not that the reductions won't take place. But they could delay the impact of that until later in the year."

Administration officials also say the Treasury Department is prepared to begin reducing subsidies that cover interest payments by state and local governments on public works, school and renewable energy projects. That means those governments will have to find money in their budgets to make up the difference in bond interest payments, and while that might not affect projects already under way, it could delay new construction efforts.

The sequester, says Douglas Rice of the Center on Budget and Policy priorities, also would mean that families that leave subsidized housing would be less likely to be replaced with people from waiting lists, and that eventually some families could lose their apartments.

Many federal programs, like heating aid for the poor, already have many more people seeking assistance than the program budgets can cover. Funding for the Low Income Home Energy Assistance Program, for instance, has fluctuated greatly in recent years, with the administration proposing to cut it by 13 percent this year. In such cases, it may be impossible for people denied aid to know whether it's because of the sequester since they might have been denied help anyway.

In some instances the cuts will be felt not by beneficiaries being thrown out of programs but by longer delays to get help. In the case of subsidized housing, for example, there are already long waits for assistance in most of the country.

In the case of the Women, Infants and Children program for low-income pregnant women and their children, the government has generally tried to make sure that every eligible woman can get food aid. States aren't permitted to cut the food benefit, which means fewer people will be served. The Agriculture Department says it will prioritize things so that pregnant women and nursing mothers keep their aid but post-partum women who do not breastfeed could lose their aid.

Who gets hit first also depends on how the government's budget flows. Education aid to school districts, for instance, is delivered in the fall, so impacts won't be felt until the new school year. But some teachers are already being informed that they could lose their jobs in August or September. Most Head Start programs won't feel cuts until the upcoming school year, too.

Some programs, like subsidized child care for the poor, are run by states, which will have flexibility in how to allocate the cuts. Just one in six eligible low-income families benefits from a federally funded child care slot. Cuts to the program leave states with difficult options: reduce the number of children cared for, require poor families to contribute more or cut payments to providers.

"I don't think people are going to feel it as dramatically as the administration has been suggesting," said Hoagland. "I'm not questioning the administration's numbers, I'm questioning their timing."