Potential for continued cuts remains high:
Dates to watch:
March 1, 2013 Impending sequestration of FY13 funds
March 27, 2013 Current Continuing Resolution ends for FY13 funding
May 18, 2013 U.S. reaches debt ceiling
Sequestration is postponed from January 1 until March 1, 2013. American Taxpayers Relief Act of 2012 (ATRA) PL 112‐240 was signed by the President on January 2, 2013. ATRA makes permanent the tax cuts authorized in the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (together commonly referred to as the Bush era tax cuts) for individuals with incomes less than $400,000 and $450,000 for married couples filing jointly. The bill also increases taxes through actions including the elimination of certain tax credits, capping deductions and changing tax rates for certain income levels. The bill summary provides a listing of the specifics related to tax changes authorized in the legislation.
The federal government is currently being funded through the continuing resolution (CR) passed by Congress last September. The Continuing Appropriations Resolution for FY12 PL 112‐175 continues funding for federal agencies at current levels through March 27, 2013.
The House passed the HR 325, No Budget, No Pay Act of 2013 on January 23, 2013. The Senate passed the legislation on Thursday. The bill extends the debt ceiling default date through May 18. The bill also includes a provision that states members of congress will not be paid unless each chamber passes a concurrent budget resolution on or before April 15th. Pay will be withheld until the date a resolution passes that chamber or the end of the 113th Congress, which could be as late as December 31, 2014.
Budget caps established in the Budget Control Act of 2011 (PL 112‐25) FY 13 = $1.047 trillion for security and non‐security discretionary and FY 14 = $1.066 trillion (the fire wall between security and non‐security is removed).
Recall that the BCA required a $1.5 trillion reduction in spending for security and non‐security discretionary programs over the next decade and put into place the potential sequestration of another $1.2 trillion starting in FY12 unless action was recommendations from a super‐committee were passed into law by congress. The failure of the super‐committee to make those recommendations precluded congressional action and therefore the sequestration of $109 billion from FY13 funding was scheduled for January 1, 2013.
The ATRA legislation averted the fiscal cliff by postponing the January sequestration of funds until March through a series of revenue increases. These provisions reduced the $109 billion funding reduction target down to $85 billion which reduced the 8.1% across the board spending reductions for non-defense discretionary programs in FY13 to a 5.1% reduction. Part of this reduction was accomplished by calculating funding and savings using the customary defense and non‐defense discretionary categories instead of the security and non‐security discretionary categories used in the BCA. Therefore the advocacy community, including AACP, now consistently seeks a balanced approach to further deficit reduction using the non‐defense discretionary, or NDD, category in our work.
House budget passed March 29, 2012 HR 112‐421 sets the discretionary caps at $1.028 trillion and the House Appropriations Committee used this total to allocate funding limits to the appropriations subcommittees. The Senate based their appropriations allocations on the $1.047 trillion limit imposed by the BCA. The Senate did not pass a budget resolution in 2012 stating that the BCA established the spending limit so no resolution was necessary.
Indications are that sequestration of funds is a real possibility as this accomplishes the need to cut funding to reduce the deficit and through the tax changes in ATRA allows for these reductions to be accomplished in a balanced manner through both spending cuts and new revenues. Yet even though substantial contributions have been made to deficit reduction through the series of laws described above ($1.5 trillion in FY2012 appropriations reductions to FY10 levels and BCA budget caps $563 billion in revenue from ATRA, and $300 billion in reduced interest on the debt) there is still a shortfall of meeting the $3.5 trillion reduction in ten years by about $1.2 trillion. A real danger to discretionary programs comes if Congress seeks to find this $1.2 trillion through further spending reductions. This could be accomplished through further reduction of the budget caps agreed to in the BCA, through the negotiation of the next CR, or in future legislation addressing the debt limit. Without a balanced approach of revenue increases and spending reductions significant impact on programs of interest to academic pharmacy could result.
What can you do? Members of our congressional delegation need to hear from you. They need to know how current funding reductions have impacted your teaching, research and service capacity. They need to hear from you how another 5.1% funding reduction in the federal programs that you depend on will impact your teaching, research and service capacity. They need to know how further reductions of ANY magnitude after that 5.1% will impact your teaching, research and service capacity. ANY AACP member interested in sharing this information and in need of assistance in crafting your message and contacting your members of Congress should contact Will Lang immediately!
You should check out the Center on Budget Policy and Priorities (CBPP) for an informative chart presenting the pre‐ATRA and post‐ATRA funding changes.
Interest rates for FFEL and Direct Loans : The U.S. Department of Education has published the interest rates for the loans made under the Federal Family Education Loan (FFEL) and the William Ford Direct Loan programs. The interest rate information is available in the January 25, 2013 edition of the Federal Register.
Improving the nation’s health: The Trust for America’s Health, supported by Robert Wood Johnson Foundation, W.K. Kellogg Foundation and The Kresge Foundation, has published an issue report that provides policy makers, community‐leaders, healthcare providers and individuals with some important priority steps to move America to a healthier future. A Healthier America 2013: Strategies to Move from Sick Care to Health Care in the Next Four Years provides an overview of where we are on the prevention spectrum and what we need to do to continue our forward progress. "The two overall goals should be to:
1. Advance the nation’s public health system. This includes establishing a set of core capabilities; restructuring federal public health programs; and ensuring that public health departments at all levels receive adequate funding to focus on activities they are uniquely qualified to deliver.
2. Build partnerships within and outside of the health field.
Public health departments play a central role as chief health strategists for communities but cannot do all that is needed to improve their community’s own health. To be effective in improving health in neighborhoods, workplaces and schools, strategies must involve a series of common‐sense partnerships, including: 1) healthcare payers– both public and private insurers; 2) healthcare providers – through expanding healthcare models to include community prevention and working with hospitals to increase engagement in neighborhood prevention strategies; and 3) sectors beyond the healthcare system, such as education and transportation."
The leadership and faculty at colleges and schools of pharmacy should use this issue report to: inform local and state policy makers, including payers, of the benefit of integrating the pharmacist into strategies for improving population health; develop education models that ensure that community‐based pharmacists are competent to consistently deliver evidence‐based wellness and prevention interventions; and evaluate existing interventions for their evidence‐base and the process of intervention delivery that leads to the expected or stated outcome.
AHRQ Director to step down: On Thursday, the Agency for Healthcare Research and Quality announced the resignation of Director, Carolyn Clancy. Dr. Clancy has served as the AHRQ Director for ten years. She will remain in her current role until a successor is in place.
Rules for ACA universal coverage requirement published: On Wednesday, the U.S. Department of Health and Human Services and the Internal Revenue Service published proposed rules in the Federal Register implementing the universal insurance coverage provisions authorized in the Patient Protection and Affordable Care Act of 2010 (PL 111‐148). The Act requires individuals to seek health insurance coverage and provides assistance in the form of tax credits and other financial support for those that are not covered through employers or other insurance plans including public payers. The Centers for Medicare and Medicaid Services (CMS) has published a fact sheet regarding the rules proposed by both HHS and the IRS.
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Founded in 1900, the American Association of Colleges of Pharmacy (AACP) is a national organization representing the interests of pharmacy education and educators. Comprising all accredited colleges and schools of pharmacy including more than 6,400 faculty, 57,000 students enrolled in professional programs and 5,700 individuals pursuing graduate study, AACP is committed to excellence in pharmacy education.