CDCAN REPORT #170-2011: Assembly Budget Subcommittee informational hearing September 29 in State Capitol

ASSEMBLY BUDGET SUBCOMMITTEE HEARING TODAY ON IMPACT OF AT LEAST $1.2 TRILLION IN FEDERAL SPENDING REDUCTIONS ACROSS THE NATION

• Informational Hearing Will Focus on Possible Impacts To California Health and Human Services Programs Including Those Impacting Children and Adults With Disabilities, Mental Health Needs, the Blind, Seniors, Low Income Families and Other Persons in Vulnerable Situations
• Reductions Required by August 2011 Federal Budget Agreement Between Congress and President
• Reductions Could Be Implemented by Automatic Mandatory Cuts or By Recommendations by Special Congressional "Super Committee"

SACRAMENTO, CALIF (CDCAN)  [Last updated 09/29/2011 11:00 AM] - The Assembly Budget Subcommittee #1 on Health and Human Services, chaired by Assemblymember Holly Mitchell (Democrat - Los Angeles), will hold this afternoon, (Thursday, September 29th) at 2:00 PM, in the State Capitol in Room 4202 an informational hearing that will focus on the impact of potential sweeping cuts of at least $1.2 trillion in  federal funding nationwide that could happen depending on what Congress and President Obama end up agreeing on - or not agreeing on - in the coming months. The hearing - which will include time for brief public comment - can be viewed on CalChannel (check your local cable listings) or via live video stream on the CalChannel website at www.calchannel.com/channel/live.

The hearing will focus primarily on the budget impacts to California's health and human services programs - including those that provide services and supports to persons with disabilities, mental health needs, the blind, seniors and low income families and individuals.

The issue is time critical because the US Congress is required to take action by the end of this year  - with a list of recommended reductions put forward by a special joint Congressional committee (called the "Super Committee") that is due November 23rd. If Congress fails to take action on reductions  in federal spending of at least $1.2 trillion over the next 10 years, automatic mandatory cuts - called federal budget "trigger cuts" will be implemented beginning in January 2013.

These federal budget "trigger cuts" are different from State budget "trigger cuts" that are part of the 2011-2012 State Budget - that could be pulled, impacting many State budget areas including developmental services, In-Home Supportive Services, and higher education.  CDCAN will issue a separate follow-up report on those State budget "trigger cuts" and other State budget related later today.

Level of Federal Spending Is Crucial To California

• The issue of the level of federal spending - while important to any state -   is especially crucial to California's own fragile State budget - and its economy that depends heavily on federal dollars for critical programs and services. Many state programs critical to children and adults with disabilities, mental health needs, the blind, low income seniors and families, including the State's Medicaid program (called "Medi-Cal") rely on those federal matching dollars and the State's compliance and implementation of the landmark 1999 US Supreme Court "Olmstead v. Elaine Wilson and Lois Curtis" that, among other things, required the states to take steps to avoid the unnecessary or unjustified institionalization of people with disabilities, mental health needs and seniors.
• California, according to the Legislative Analyst Office - the non-partisan independent legislative office that reviews budget related issues for the California Legislature (somewhat similar to the federal Congressional Budget Office) - is expected to receive $80 billion in federal funds or about 38% of the overall 2011-2012 State Budget (that includes nearly $86 billion or 41% of the total State Budget, that comes from State general funds).
• Of the $80 billion in federal funds the State is expected to receive during the July 1, 2011 through June 30, 2012 State Budget year, almost $41 billion of that amount (or 52%) goes to state health and human services programs, followed by nearly $20 billion (or 25% of the total $80 billion) to the state's labor and workforce development budget (largely for unemployment insurance benefits), followed by $11.4 billion (or 14% of the total $80 billion) for education.  The bulk of the nearly $41 billion in federal money to health and human services programs in California goes to the Department of Health Care Services (about $29 billion of the $41 billion) that oversees the State's Medi-Cal program, including Medicaid waivered programs administered by other departments including the Department of Developmental Services (regional center funded community-based programs, developmental centers), Department of Social Services (including In-Home Support Services).
• The remaining amounts left from the $80 billion in federal money go to other parts of the State budget (for instance Department of Corrections and Rehabilitation is projected to receive about $118 million of the total $80 billion in federal money during 2011-2012 or less than 1% of that total).

Why The Issue of Sweeping Federal Cuts Critical Now?

• The issue of major federal budget reductions is a big concern now across the nation because of a federal budget related agreement that Congress and the President made on August 2, 2011 - after a major long drawn out battle - that increased the dollar amount (or "debt ceiling") of what the federal government can legally spend and pay for.
• That agreement however also included a process that will implement at least $1.2 trillion in cuts in federal spending over the next 10 years that would reduce the federal budget deficit either through and up or down vote of a list of cuts that a special joint Congressional Committee - referred to as the "Super Committee" (made up of equal numbers of Democrats and Republicans in both the House of Representatives and US Senate).
• If the "Super Committee" cannot agree on any lists of cuts or if the US Congress fails to approve their recommended list of reductions in a simple up or down vote (it cannot be changed or amended), then automatic reductions - known as federal budget "trigger cuts" - would be pulled with mandatory cuts of $1.2 trillion including $54.7 billion defense spending, and $54.7 billion in non-defense spending including cuts in Medicare payments to providers and insurance plans.  Those automatic reductions - if the federal budget "trigger cuts" are pulled - would take effect January 1, 2013.
• Some programs are exempt by this specific federal budget "trigger cuts" including Social Security, Medicaid, SSI (Supplemental Security Income), State Children's Health Insurance Program (SCHIP), food stamps, some child care spending, veterans benefits, Pell education grants, federal retirement benefits, and the Earned Income Tax Credit. None of those programs however are exempt from reductions that the "Super Committee" could recommend.
• These federal budget "trigger cuts" are different from the California State budget "trigger cuts" that were included in the 2011-2012 State Budget passed by the California Legislature and signed into law by Governor Brown in late June.

Members of the US Congressional "Super Committee"

Officially known as the Joint Select Committee on Deficit Reduction but more commonly referred to as the "Super Committee" the members - selected by the Republican and Democratic Congressional leadership are:

• US House Republicans:  Jeb Hensarling of Texas, Fred Upton of Missouri ,and Dave Camp of Missouri
• US House Democrats:  James Clyburn of South Carolina, Chris Van Hollen of Maryland, and Xavier Becerra of California
• US Senate Democrats:  Max Baucus of Montana, John Kerry of Massachusetts, and Patty Murray of Washington
• US Senate Republicans:  Jon Kyl of Arizona, Pat Toomey of Pennsylvania, and Rob Portman of Ohio

Time line for "Super Committee":

• November 23, 2011 - Deadline for "Super Committee" to vote and approve recommendations for cuts
• December 2, 2011 - Deadline to report to Congress list of recommended cuts
• December 23, 2011 - Deadline for Congress to approve or reject (on an up or down vote - no changes can be made to the recommendations made by the "Super Committee"). If Congress fails to act by this date, the automatic mandatory federal spending cuts of $1.2 trillion (known as the federal budget "trigger cuts") will go into effect, with implementation beginning January 1, 2013.

Assembly Budget Info Hearing Will Have Two Panels Followed By Brief Public Comments

The subcommittee informational hearing will be divided into three major parts - the first two by panels, and the third for any brief public comment (people can also write comments directly to the subcommittee - see address below).  The Assembly subcommittee will ask the two panels the following:

• Federal Spending Caps -  The impacts of potential caps in federal spending on California health and human services programs
• Federal Budget "Trigger Cuts" -  if the federal budget "trigger cuts" (mandatory automatic cuts also known as "sequestration") are pulled what the impact of those cuts would mean on Californians - especially to persons with disabilities, the blind, seniors and other persons in vulnerable situations, and the impact to the State's economy and State budget.
• "Super Committee" - what recommendations would panelists make to the "Super Committee" (made up of equal numbers of Republicans and Democrats in both the US House of Representatives and the US Senate to come up with a list of federal spending cuts of at least $1.2 trillion over the next 10 years) in terms of guiding principles and specific proposals that should be avoided because of its impacts on California.
• Other Recommendations - what other recommendations would panelists make for federal action to encourage economic recovery, job creation, and to maintain health and human service programs and a safety net for California's people who live in vulnerable situations.

MEMBERS OF THE ASSEMBLY BUDGET SUBCOMMITTEE

The Assembly Budget Subcommittee #1 on Health and Human Services is one of 6 Assembly budget subcommittees that deal with certain parts of the State budget (the State Senate has five budget subcommittees).  There are five members on the Assembly  Budget Subcommittee #1 on Health and Human Services (its State Senate counterpart has 3 members):

MEMBERS - DEMOCRATS (3): Assemblymembers Wes Chesbro, Holly Mitchell (Chair), and Bill Monning
MEMBERS - REPUBLICANS (2):  Assemblymembers Kevin Jeffries, and Allan Mansoor. .   
ASSEMBLY BUDGET COMMITTEE/SUBCOMMITTEE OFFICE PHONE: (916) 319-2099

In addition to public comments at this and other Assembly budget committee or subcommittee hearings, people can also send in their written comments directly to the Assembly Budget Committee (and subcommittee):

Assembly Budget Subcommittee #1 on Health and Human Services
Assemblymember Holly Mitchell, Chair
State Capitol - Room 6026
Sacramento, CA 95814

AGENDA - SEPTEMBER 29th ASSEMBLY SUBCOMMITTEE

The following is the agenda as released by Assembly budget subcommittee staff yesterday:

Assembly Budget Subcommittee #1 on Health and Human Services
Assemblymember Holly Mitchell, Chair

Informational Hearing on Federal Deficit Reduction and Potential Budget Impacts on California Health and Human Services Programs

Thursday, September 29, 2011, 2:00 PM
State Capitol, Room 4202

The purpose of this hearing is to educate Legislators, staff, and the public regarding the federal deficit reduction and sequestration process; the Super Committee's parameters and process; and potential budget actions absent adoption of a Super Committee proposal.  The hearing will focus primarily on the potential fiscal impacts to California's health and human services programs and the impacts on Californians they serve.

Panel 1:  Overview of the Federal Process

Focus on the Super Committee and sequestration process, current proposals under consideration, and an overview of potential state budget impacts with focus on health and human services programs.

• Edwin Park, Vice President for Health Policy, Center on Budget and Policy Priorities
• Jean Ross, Executive Director, California Budget Project

Panel 2: California Impact

Potential impacts on Californians, health and human services programs, potential cost shifts to state and local government, and key principles the Super Committee should consider as they develop proposals:

• Edwin Park, Vice President for Health Policy, Center on Budget and Policy Priorities
• Vanessa Cajina, Legislative Advocate, Western Center on Law and Poverty
• Anthony Wright, Executive Director, Health Access
• Gary Passmore, Director, Congress of California Seniors
• Deborah Doctor, Legislative Advocate, Disability Rights California (DRC)
• Nicette Short, Senior Advocate, Health Policy, Children NOW/100% Campaign
• Legislative Analyst Office (LAO)
• Governor's Department of Finance (DOF)
• Frank Mecca, Executive Director, California Welfare Directors Association

The panels will be followed by an opportunity for public comment.