DES MOINES—Dave Roederer, Iowa’s budget chief, briefed reporters Thursday afternoon on the impact of the sequester on Iowa government agencies. The budget crunch will trim $46.5 million in federal funds out of Iowa’s annual budget of about $12 billion.
Roederer, the director of the Iowa Department of Management, couldn’t resist a jab at President Obama for closing White House tours to the public, shutting out a group of sixth graders from St. Paul’s Lutheran School in Waverly.
“The governor wanted to make it very clear that Terrace Hill tours will remain open,” he joked.
The reduction of $46.5 million in federal funds will impact state agencies differently. Ultimately, the sequester will slice 0.4 percent from the state budget, but the Departments of Education and Public Health will be impacted the most (with cuts of $14 million and $8.8 million, respectively).
Of the $3.8 trillion in annual federal outlays, about 60 percent funds mandatory entitlement spending, including Social Security and Medicare. Those programs are exempted from the sequester’s scalpel. Of the remaining third or so—$1.3 trillion—in discretionary federal spending, the political will or capital does not exist to cut enough to significantly reduce the annual federal deficit of about $1 trillion or the federal debt of $16 trillion.
The sequester deal, assuming it isn’t replaced by another measure, extends to 2021 and reduces the planned increase in federal spending by $1 trillion. Federal agencies and the White House have discretion on what programs to cut to meet spending targets.
Roederer criticized Congress for not enacting an omnibus spending bill since 2009 or a formal budget since 1997. He said that until Congress passes a budget with five year projections, as Iowa does, Americans can expect a series of crisis-deadline based debates on budget issues.
A continuing resolution funding the government must be passed before March 27 to avoid a government shutdown and Congress needs to act by about mid-April to raise the debt ceiling.
The sequester will affect about 236 full-time equivalent positions in state government(not necessarily individual employees), depending on further details from federal agencies and state-level collective bargaining agreements. Gov. Terry Branstad, R-Iowa, is not recommending additional appropriations to cover any federal cuts, Roederer said.
“Our assumption—right now—is that these cuts will be made permanent, and we are preparing for that,” he said.
Download Roederer’s budget presentation [14-page PDF].
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