Sequestration: It’s Happening. What Now?

written by Kate Seif
February 26, 2013

Whether you’re here in Washington, DC or not – there’s one big thing everyone’s talking about this week. And no, it’s not Jennifer Lawrence’s trip at the Oscars. It’s sequestration (cue ominous music). Sequestration, the automatic, across-the-board cuts to both security and non-security discretionary spending (which must be appropriated through the federal funding process each year, and does not include mandatory spending programs such as Medicaid, Medicare, SSI, etc.), is set to take place this Friday, March 1. As of now, it’s unlikely to be averted. While some last-minute proposals are being addressed (see today’s Hill Update for the latest), it’s unlikely that they will gain much traction in the next four days.

What gets cut? Simply put, nearly all discretionary programs within the federal government will receive about a 5 percent cut. The Department of Veterans Affairs (including all VA homeless assistance programs, such as SSVF, Grant and Per Diem, and HUD-VASH) are exempt from these cuts. But virtually all programs within HUD and many other departments will be cut. This includes HUD’s McKinney-Vento Homeless Assistance Grants, Section 8 Housing Choice Vouchers, HOME, CDBG, Public Housing; HHS’ Runaway and Homeless Youth Act (RHYA) programs; reentry and domestic violence programs within the Department of Justice… and the list goes on. These programs will receive cuts of just over 5 percent.

As noted above, programs like SSI/SSDI, Medicaid, Medicare, TANF, and SNAP (formerly food stamps) are exempt from these cuts.

When do the cuts happen? Sequestration takes place this Friday, March 1, but not all programs will see cuts this Friday. Since programs are funded differently at different times, each one will feel the impact based upon its current funding timeline. For example, grant programs (such as McKinney-Vento grants and RHYA) will see the 5 percent cut in the next Notice of Funding Availability (NOFA). For McKinney, this means the FY 2013 NOFA that’s likely to come out in late 2013. The NOFA release varies greatly program-to-program. While McKinney will be operating laregly under the FY 2012 NOFA for most of 2013, many programs will do a grant process earlier, at which time, they will have to assess the 5 percent cuts.

Programs that operate on a non-grant basis will feel the pinch much sooner. For example, Public Housing and Section 8 are likely to see reduced operating costs in the next few weeks or even days.

It’s unclear how cuts will be allocated, and it’s likely to be decided department-by-department, or even program-by-program. The Alliance will make sure to circulate guidance as it becomes available.

What’s next? Following Friday’s implementation deadline, Congress is likely to shift their focus to FY 2013 funding. This funding process is separate from anything relating to the sequester. Currently, the government is operating under a stopgap funding measure that expires on March 27. Congress has indicated that it would like to finalize FY 2013 funding prior to this deadline. It’s possible that in finalizing FY 2013 funding, Congress will replace sequestered funds for various programs, but it’s equally possible that Congress will extend the stopgap funding at FY 2012 levels for the remainder of the fiscal year (until September 30). We’ll have a much clearer picture of this in the coming weeks.

What can we do? When it comes to these government-wide funding issues, we can all feel a bit helpless sometimes. Fortunately, next week, Congress is likely to “get back to basics” and work on the details of the FY 2013 funding bills – as described above. Here’s your opportunity to make an impact and work to ensure that, sequester or not, programs like the McKinney-Vento Homeless Assistance Grants that matter most to preventing and ending homelessness in your community receive robust funding.

In the next few days, the Alliance will be sending out an Advocacy Update and emails to our various campaigns about ways to get involved. If you’ve never done advocacy before, there’s never been a better time; 5 percent cuts would be devastating to our efforts, and we must make sure our programs receive as much funding as possible to continue doing the excellent work we’ve seen nationwide.

Sign up for our lists. Call your Members of Congress. Tell them that cutting HUD and other housing and homelessness programs is simply unacceptable. If we all act, and act soon, as can make a difference.

If you have any questions about sequestration or getting involved, email me!