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POLICY INSIGHT
BEYOND THE NUMBERS
BEYOND THE NUMBERS
We’ve been asked repeatedly when the sequestration budget cuts for fiscal year 2014 will kick in. As we see it, the 2014 sequestration has already occurred (even though fiscal year 2014 doesn’t officially begin until October 1). That’s because the Office of Management and Budget ordered sequestration on April 10 and corrected its order on May 20. The order did the following:
- It immediately reduced the cap on discretionary spending for fiscal year 2014 from $1.058 trillion to the $967.5 billion level that budget insiders often mention.
- It ordered entitlement cuts to take place and, in all but two cases, they will take effect on October 1.
- The two exceptions are Medicare and some farm price supports. The scheduled 2 percent cut in payments to Medicare providers and plans will take effect next April 1 and last for 12 months. It doesn’t start sooner only because the 2 percent “2013” Medicare cuts will continue through March 31, 2014 (under a special rule that’s unique to Medicare) and the law doesn’t permit doubling up the Medicare cuts. Farm price supports start with the “crop year” (for each crop) that begins after October 1.
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