May 10 (Bloomberg) -- Margaret George, a retired widow raising her three young grandchildren in a trailer in Whispering Ranch, Arizona, says her family wouldn’t survive without federal help to pay for electricity.
In March, she paid her $200 power bill thanks to a grant from the U.S. Department of Health and Human Services. Those costs rise with the temperature, which can top 100 degrees Fahrenheit in the desert town 50 miles northwest of Phoenix.
“I don’t have the money to pay it,” said George, 62, whose $640 energy assistance grant won’t last through the summer. “I would have already gotten it shut off it weren’t for that program -- it was either pay the electric bill or it would be my grandchildren going without.”
Hundreds of miles away from the nation’s capital, Americans like Margaret George are experiencing the reality of automatic federal budget cuts on programs little noticed by Washington’s power brokers. At least $80 billion in reductions under a process known as sequestration are curtailing funding for AIDS drugs, help for returning military troops and projects for low-income families who don’t have clout in Congress.
Although lawmakers last month approved an emergency measure to bring an end to air-traffic controller furloughs that sparked flight delays, there is little reason to expect that other cuts will be reversed, said Bill Hoagland, senior vice president of the Bipartisan Policy Center in Washington.
“The reductions are going to remain in effect through the end of 2013,” said Hoagland, a former staff director of the Senate Budget Committee. “I just don’t think there are going to be real opportunities to either drop the reductions or to modify them significantly.”
The grant George received was provided by the Wise Owl Senior Center in Wickenburg, a nonprofit contracted by Maricopa County to run the program, part of HHS’s Low Income Energy Assistance Program. An 8.2 percent mandated funding cut will remove about $285 million from the program in the fiscal year that ends Sept. 30, according to an Office of Management and Budget report.
Charlie Peterson, the program director for the center, said he expects cutbacks to result in more seniors being unable to pay for air-conditioning as summer temperatures soar.
“There’s just not enough money to go around,” Peterson said. “There are really going to be a lot of people out there who will be living without power.”
The Congressional Budget Office estimated in February that sequestration will slow U.S. economic growth this year by 0.6 percentage point. Gross domestic product rose at a 2.5 percent annual rate in the first quarter, Commerce Department figures released April 26 showed.
Investors are showing little concern about the budgetary uncertainty in Washington. The Standard & Poor’s 500 Index closed at 1,626.67 on May 9, a gain of 14 percent this year, while the Dow Jones Industrial Average climbed above 15,000 for the first time on May 7.
“When the sequester first hit, the consequences weren’t immediately apparent because it was trickling out over time,” said Melissa Boteach, director of the Center for American Progress’s Half in Ten Project, which is designed to help cut poverty over the next decade. “You’ll see over the next weeks and months the ways that this is hitting struggling families even more.”
In the weeks before sequestration took effect on March 1, President Barack Obama had warned the cuts would hurt the military and shut campgrounds at popular national parks, delay travelers at airports and cut safety inspections at food plants.
A stopgap measure Obama signed on March 26 restored funding for meat inspections and eased reductions for some social programs, including nutrition aid for low-income families. A month later, Congress acted to boost funding for the Federal Aviation Administration to put an end to air-traffic controller furloughs blamed for delays at U.S. airports.
Representative Gerald Connolly, a Virginia Democrat, said the cuts are likely to remain at least through the end of this fiscal year.
“We’re going to have to live with it because Republicans have cynically seen this as their opportunity to shrink government,” Connolly said. “Many in their caucus know the cost of everything, but see the value in nothing.”
With lawmakers showing no inclination to roll back the remaining cuts, some of the most visible belt-tightening measures are unfolding in Washington itself.
On May 13, the U.S. National Arboretum, a part of the Department of Agriculture, will begin closing the grounds to the public on Tuesday through Thursday to implement the almost 8 percent budget cut. At the Smithsonian Institution, officials say some exhibits at many of its 19 museums and galleries will be closed at times due to security staffing cuts. The White House has already canceled public tours.
Some federal agencies, in detailed reports sent to Congress, provided the clearest picture yet of the impact of cuts on individual program.
The Energy Department says it will cut $190 million this fiscal year from defense nuclear nonproliferation programs, and $91 million from energy efficiency and renewable energy programs. While the Department of Veterans Affairs is exempt from automatic cuts, programs that help veterans aren’t fully protected, as the Labor Department will ax programs providing employment and training to former soldiers by $13.3 million.
The Education Department says it will cut $3.4 million from funds used to help teach homeless children and youth, and also reduce state grants for adult basic and literacy education by $31 million.
At the Foundation for AIDS Research in New York, analysts estimate as many as 8,610 Americans will lose access to an AIDS Drug Assistance Program funded by HHS, and the National Institutes of Health will lose $153.7 million in AIDS research funding, meaning that 280 research grants would go unfunded, including 31 efforts to develop a vaccine.
About 1.2 million Americans are living with HIV/AIDS, the group said.
Although HHS has sent details of its budget cuts to Congress, the department is “not yet in a position to publicly provide figures on specific elements,” Bill Hall, an agency spokesman, said in an e-mail.
Health and Human Services Secretary Kathleen Sebelius told Congress in February that budget reductions at the Centers for Disease Control would translate into 424,000 fewer HIV tests conducted nationwide, which receive grants for prevention measures. Cuts to the Ryan White program, named after the teenager who contracted AIDS from a blood transfusion in the 1980s and died, could trigger wait lists for HIV medications, Sebelius said.
“If we divest from AIDS research at this crucial time, we’re really shooting ourselves in the foot, in terms of squandering the epidemic with a cure and a vaccine,” said Chris Collins, vice president and director of public policy at AmFAR, a New York-based nonprofit group that supports AIDS research. “There’s no question that the impact will be felt, and it will damage scientific research and damage this country’s edge on scientific research.”
Even groups that have secured funding for current operations said the era of federal austerity will eventually have a negative impact on their programs.
At America Works, a New York-based group that is one of the nation’s largest providers of employment services to homeless veterans, officials said they depend on Labor Department grants to help them provide job-hunting help to 450 clients a year. Their high rate of job placement in New York, Washington and Chicago may protect current programs, said Lee Bowes, chief executive officer.
At the same time, hopes for an added grant to help another 75 people in Washington is “probably off the table,” Bowes said. Returning troops need the help: The unemployment rate for male veterans aged 25 to 34 was 10.4 percent in 2012, compared with an 8.1 percent rate for their nonveteran counterparts, the Bureau of Labor Statistics said last month.
“Every employer we’re working with wants to give back by hiring veterans,” Bowes said. “If they don’t have a point of access and you can’t find them, they disappear and become a hidden secret.”
Brian Jackson, a retired U.S. Navy veteran, was evicted from his Arlington, Virginia, apartment in February after he lost his job with a contractor of office supplies for the State Department.
Unable to find a job, Jackson, 29, who served from 2004 to 2011, turned to America Works for help. He said the group has arranged four interviews.
“There are so many unemployed veterans,” Jackson said. “For somebody who has fought for their country and served in active duty overseas, to come back to America and not be able to find an stable job, that’s just sad.”
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