Budget sequestration and the U.S. health sector.

n engl j med 368;14 nejm.org april 4, 2013 1269 for the final 7 months of fiscal year 2013. These reductions will have adverse effects on many important governmental functions and activities affecting both the health sector and the health of Americans. Why is this happening, and what will the impact be on the U.S. health sector? In August 2011, in an agreement to raise the nation’s debt ceiling, bipartisan majorities in the House and Senate approved the Budget Control Act of 2011 (BCA) to reduce the deficit by $1.2 trillion between 2013 and 2021. The BCA established a threat of across-the-board cuts, or “sequestration,” if the Joint Select Committee on Deficit Reduction failed to approve, and Congress to enact, alternative reductions. In November 2011, the Select or “Super” Committee declared its inability to reach an agreement. Sequestration became operational on March 1, 2013, after Congress acted in January to delay its initiation by 2 months. President Obama is now overseeing equal cuts of $42.67 billion from defense-related and nondefense parts of the fiscal 2013 budget. Jeffrey Zients, the deputy director in the Office of Management and Budget (OMB), wrote in a March 1 report to Congress, “Because these cuts must be achieved in only seven months instead of 12, the effective percentage reduction will be approximately 13 percent for nonexempt defense programs and 9 percent for non-exempt nondefense programs.”1 Complicating this situation further is the fact that the government is operating on a continuing resolution (which extends last year’s budget into this year) only until March 27; it must agree on further funding for the current fiscal year by then or face a shutdown. Although most parties agree that sequestration was never intended to be implemented, the OMB is now leading federal agencies through a process to implement the reductions. Of the $1.2 trillion in cuts, $216 billion will be reductions in debt-service payments, and the remaining $984 billion will be split evenly over 9 years at $109 billion per year, and further adjusted and split evenly between cuts to national defense and nondefense functions at $42.667 billion each.1 The $42.667 billion per year Budget Sequestration and the U.S. Health Sector