Asbury Park Press

Budget Cuts To Be Felt In NJ

Asbury Park Press — Sunday, February 24, 2013

Written by Malia Rulon Herman
Washington Bureau

WASHINGTON — New Jersey could lose about 32,000 jobs and some of its federal Sandy relief aid, should massive federal budget cuts set to hit the nation on Friday go through, an analysis has found.

The "sequestration" cuts could impact civilian military workers, first-responders, public school students, hospital patients, airline travelers, Social Security recipients and a wide variety of other groups, according to the George Mason Center for Regional Analysis.

Uniformed military personnel will be exempt, but most federal employees could face either termination or furloughs ranging from seven to 22 days, effectively reducing take-home pay by as much as 20 percent.

The cuts also will take away about $3 billion of the $60 billion Congress approved for superstorm Sandy victims, even as many New Jerseyans continue to recover from the Oct. 29 storm.

"You could argue whether government is too big or too small, but it's a pretty important part of all of our lives," said John Weingart, associate director of the Eagleton Institute of Politics at Rutgers University.

The $85 billion in "sequestration" spending cuts for fiscal 2013 — which ends on Sept. 30 — were set into motion in 2011 as part of a deal to raise the nation's debt limit. The cuts will continue through the end of fiscal 2021 and will total $1.2 trillion.

They were intended to be so severe that Congress and the White House would be forced to compromise on a less drastic long-term deficit reduction plan. They originally were supposed to take effect Jan. 1, but Congress postponed them for two months.

The cuts would fall hardest on New Jersey's military installations. Army officials estimate that 6,892 civilian, private-sector and contractor jobs will be affected, with lost wages totaling $207 million. The Air Force predicts 2,100 employees will face furloughs amounting to $16.1 million in lost pay.

In addition, $6.5 million in Air Force projects at Joint Base McGuire-Dix-Lakehurst — including installation of an emergency generator, runway repairs and some heating, ventilation and air conditioning work — would be delayed by the sequester.

The effects of the cuts on military personnel will be "devastating," said Jessica Wright, defense undersecretary for personnel and readiness.

"But on our civilians, it will be catastrophic," she said.

Reduced pay for civilian military workers will drive down consumer spending in New Jersey, which will hurt small businesses, restaurants and retailers.

"It will affect local communities; it will affect local businesses; it will affect our dedicated men and women who live in the local communities," Wright said.

At the Picatinny Arsenal in Morris County, which employs 5,841 people, staff has already been warned to plan for furloughs.

New Jersey hospitals, home health centers and nursing homes also are bracing for the cuts, which will reduce Medicare reimbursements to health care providers by 2 percent.

"While that may seem like a small percentage, there are significant dollars behind it and it's a major worry," said Kerry McKean Kelly of the New Jersey Hospital Association, which predicts the state stands to lose $133 million this year, including $94 million at acute care hospitals.

Over the nine years the budget cuts will remain in effect, the state will lose $1.3 billion, including $916 million at acute care hospitals.

"These cuts would not affect just Medicare beneficiaries, they would affect anyone who counts on health care services in New Jersey," Kelly said, explaining that 13 hospitals in New Jersey have closed in the last decade and about one-third of the state's hospitals ended last year in the red.

"If you add cuts of that magnitude on top of that, we run the real risk of additional hospital closures or seeing the elimination of services," she said.

Job losses in health care and related areas in New Jersey could total 21,820, according to a report from the National Hospital Association.

Cuts also will hit a variety of education initiatives that receive federal grants, such as preschool, special education and the Head Start program.

New Jersey schools could lose a total $57 million, according to the National Education Association. That would affect more than 70,000 students and could lead to 769 job losses.

"Congress has a clear choice: Continue protecting big tax loopholes for millionaires and multinational corporations or protect New Jersey's seniors, kids and working families from these cuts," said Ann Vardeman of New Jersey Citizen Action, a watchdog group that held a news conference last week over the cuts.

The cuts also would mean:

In addition, federal grants to local fire departments could be reduced, according to New Jersey Democratic Rep. Bill Pascrell, who called the cuts "intolerable."

"As a former mayor, I know how critical federal funding is to our local fire houses and the severe impact elimination would have on their response to disasters like Hurricane Sandy," he said, urging colleagues to "put aside partisan politics and reach a compromise."

Congress is set to return to Washington on Monday, but it's unclear if it will take up a deal to avert the cuts. Both the House and Senate were in a week-long recess beginning Feb. 18 as the clock ticked down to the sequestration deadline.

In a conference call with reporters, Rep. Rob Andrews, D-N.J., called the cuts "an unnecessary self-inflicted wound on the United States economy."

He urged Republicans to vote on a plan supported by President Barack Obama and House Democrats that would stave off the cuts through the end of the year by trimming other spending, such as farm subsidies, and eliminating tax breaks and loopholes for oil and gas companies and the wealthy.

"Congress should come back to Washington to fix the problem," he said.

What is sequestration?

The spending cuts were part of a 2011 deal to increase the nation's debt limit. The cuts, projected to total $1.2 trillion, are to take effect March 1 and continue through fiscal 2021.

Half the cuts will come from defense programs and half from non-defense programs. Social Security and Medicaid are exempt from the reductions, but Medicare payments to doctors and hospitals will be cut up to 2 percent.

This year, $85 billion will be cut between March 1 and Sept. 30, which is the end of the fiscal year. That could mean 750,000 jobs lost nationwide, according to the Congressional Budget Office.

The cuts were designed to be so severe that Congress and the White House would feel compelled to avoid them by coming up with a less drastic plan to reduce the nation's debt of more than $16 trillion, but that hasn't happened.

The cuts were originally supposed to take effect in January, but Congress approved a two-month delay as part of the so-called fiscal cliff deal.

How the N.J. delegation voted

Democratic Sens. Frank Lautenberg and Robert Menendez voted against the debt-limit deal, which passed the Senate 74-26.

The House passed the deal 269-161. Republican Rep. Scott Garrett and Democratic Reps. Frank J. Pallone Jr. and Rush Holt opposed the bill.

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