Across the Board Federal Budget Cuts Begin March 1

(March 5, 2013)

Absent last minute action from Congress, effective March 1, 2013, the federal government will be required to institute a series of automatic, across-the-board cuts (sequestration) totaling $85 billion for this year alone. The cuts are split 50-50 between defense and non-defense discretionary spending (i.e., education, housing, research) and were mandated under the Budget Control Act of 2011 (BCA).

  • Medicare providers will see a 2% reduction in payment on services provided after April 1 as the Medicare reduction is scheduled to be implemented the first of the month following the sequester. CMS will notify providers in advance of the payment cut.
  • It is unclear exactly how the budget cuts will impact other programs important to audiologists, speech-language pathologists, and their clients as each agency will have the discretion to determine how their program cuts will be made. Those other discretionary programs are likely subject to the full 8.4% reduction in federal funding.
  • Many federal agencies have announced that they will begin furloughing employees, while the National Institutes of Health has announced that each center director will be given the authority to cut programs and expenses under their purview.
  • Early Hearing Detection and Intervention (EHDI) programs funded by the Health Resources and Services Administration (HRSA) will also likely be impacted significantly.
  • At this point, it is unclear if Congress will address the cuts later in the year.


Under the requirements of the BCA as amended by January's American Taxpayer Relief Act (ATRA), both defense and non-defense programs will be subject to sequestration on March 1, reducing total funding by $85 billion for 2013. The law requires a reduction of federal spending totaling $1.2 trillion over the next 10 years. Several key mandatory programs—including Social Security, Medicaid, and the Children's Health Insurance Program (CHIP)—are held harmless and exempt from sequestration cuts, thus deepening the reduction for affected programs.

ASHA Resources

For questions related to Medicare payment cuts, please e-mail [email protected]. For general information related to federal budget cuts, please contact Ingrida Lusis, ASHA's director of federal and political advocacy, at [email protected].

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