ICR News

11/23/2011 : How Automatic Spending Cuts Would Hit Hoosiers

WASHINGTON -- The debt-reduction committee\'s announcement Monday that its members could not reach a deal shifts the focus to the more than $1 trillion in automatic spending cuts scheduled to start in 2013 unless Congress intervenes.

Half the cuts would come from defense and half from nondefense programs. But the exact spending levels for specific programs won\'t be known for a while.

Here\'s a broad look at what the automatic cuts could mean for Hoosiers.

State and local funding: About one-fifth of state and local government revenue in Indiana has come from federal programs, many of which would get hit by the automatic cuts. Transportation funding, for example, could be cut 14 percent, according to the nonpartisan group Federal Funds Information for States. Education programs could be cut 19 percent. Grants to improve water and sewer systems could be cut in half from last year\'s levels.

Safety-net programs: Social Security, Medicaid, veterans\' benefits, the Children\'s Health Insurance Program, unemployment insurance, welfare and other programs benefiting low-income Americans are exempt from the automatic cuts. Social Security was the largest source of federal funding in Indiana in 2010, according to the U.S. Census Bureau. Medicaid ranked third, after Medicare.

Medicare cuts: While Medicare benefits are exempt from the automatic cuts, payments to doctors, hospitals and other providers would be cut up to 2 percent. That would reduce reimbursements to Indiana hospitals by about $927 million, according to the Indiana Hospital Association. The approximately 160 Indiana hospitals that would be hit employ about 130,000 Hoosiers. Services such as community outreach and obstetric programs also could be reduced.

Farm subsidies: Agriculture programs would be cut by $15 billion, with most of that coming from crop subsidies. Indiana farmers received $222 million in farm subsidies in 2010, the ninth-most among the states, according to the Environmental Working Group. Subsidies for corn and soybeans were the largest source of funding. Disaster payments ranked third.

Defense: Defense spending would absorb half of the automatic cuts. President Barack Obama is expected to exempt military personnel from the reductions. The federal government spent $521 million on salaries and wages for military employees in Indiana in 2010. Total defense spending in the state was $7 billion. That amount was already expected to go down to about $6.5 billion in 2013, before the August cuts in the debt limit deal and the additional automatic cuts were factored in, according to 2010 Defense Department projections. Indiana would lose $783.5 million in 2013 from the debt-reduction defense spending cuts and their related economic impact, according to estimates by George Mason University. That impact includes a loss of 13,273 jobs.

Some lawmakers on the armed services committees have warned that the defense cuts are too steep. GOP Sens. John McCain of Arizona and Lindsey Graham of South Carolina said they will push legislation to lessen the impact on defense spending.

No Indiana lawmakers have backed that effort yet. Rep. Todd Young, a Bloomington Republican who sits on the House Armed Services Committee, said he\'s \"open to conversations about changing the (automatic cutting) process, but only if those conversations begin by working to identify correspondent amounts of deficit reduction elsewhere.\"

\"Congress should now be focusing on finding savings where the supercommittee failed,\" Young said in a statement.

GOP Sen. Dan Coats, who sits on the Senate panel that helps determine defense spending, said through his spokeswoman that Congress and the administration must live up to the commitment set in the August debt-reduction deal.

\"Although Senator Coats opposed the Budget Control Act and the deeply flawed process it created, Congress and President Obama approved the legislation and committed to the American people a minimum of $1.2 trillion in spending cuts either through a deficit reduction package or (automatic cuts),\" said spokeswoman Tara DiJulio.

Other impacts: Third Way, a centrist Democratic think tank, looked at the potential ramifications of automatic cuts on a handful of programs, assuming an expected 7.8 percent cut to domestic programs is applied evenly. It could mean a loss of 1,200 air traffic controllers, leading to more flight cancellations and delays. It also could mean more deaths from air pollution and food-borne illness because of fewer inspections, and layoffs of federal correctional officers.

 

Click here to read the entire article at IndyStar.

11/17/2011: Lawmakers may find it's the right time for 'right to work' legislation

This article discusses the "Right to Work" legistlation and gives Gov. Mitch Daniels' current view on it.  (You can also read it here on IBJ's website.)

Indiana Gov. Mitch Daniels has long flirted with "right to work," but it seems he can't decide whether to take it to the big dance — his last session as governor.

Daniels' disdain for public sector unions is no secret. In his first year in office, he stripped collective bargaining rights for public employees via an executive order. He calls government employees the "privileged elite" in his new book. He even lent his support in the national labor battle next door, recording robo-calls in favor of changes pushed by Ohio Gov. John Kasich, which voters overturned last week.

But when it comes to blocking private sector unions and businesses from mandating union membership or dues, via right-to-work legislation next year, he's not ready to take the lead.

"I think it's highly likely from talking to legislators it will be in front of this next General Assembly and it has, as I thought it should, been researched, debated and vetted for a year. And I think they believe it's appropriate now to bring it forward," Daniels said.

The lead will have to come from the General Assembly, he says.

"I want to know exactly what kind of bill they want to move with and what their thoughts are about how to be successful."

When conservative Republicans pushed the issue during the 2011 session, Daniels urged them to hold off, lest it suck all the air out of the room while he tried to push through sweeping education changes that, along with efforts to draft him for a White House run, put a national spotlight on Indiana. They ignored his request, and subsequently House Democrats left the state for five weeks, union workers packed the Statehouse and, for at least a bit, uncertainty reigned.

But with Daniels off the list of presidential contenders, the state's biennial budget approved and no marquee issues arising just yet, right-to-work could be poised to dominate the short 2012 session.

"It is clear to us that the votes are there to pass it. We would like to see it happen in 2012," said Greg Mourad, vice president of the National Right to Work Committee. Mourad and other "right to work" advocates have taken to calling Daniels their "silent supporter" — he's a big fan, but he's not ready to declare his love in public just yet.

Rep. Jerry Torr, R-Carmel, said he's ready to carry the issue in the House, just as he has for the last eight years. The question remains whether leadership will push it through.

House Speaker Brian Bosma won't say whether he's ready to push the issue, but he hinted it may be the next "step" needed to address the state's growing unemployment numbers.

"The most important thing for Hoosiers right now is to address the issue of 266,000 Hoosiers out of work," he said. "Despite all of the cutting-edge initiatives we've enacted in Indiana — and we're recognized around the country as the top business environment in the Midwest, and one of the top in the country — we still have 9 percent unemployment. So we've got to take another step."

At least one precursor has been met. The right-to-work study committee completed a series of exhaustive hearings this summer and issued a fairly sparse, 2,000-word report, last month recommending lawmakers approve the measure. Republicans running the committee approved the recommendation on a strictly party-line vote, while Democrats opposing the measure said they plan to release their own, separate report.

Mitch Roob, then Daniels' economic development chief, told the study committee that right-to-work was needed to bring jobs to the state. Supporters like Sen. Greg Walker, R-Columbus, see that as a signal Daniels is on board with them

Earlier this month, Daniels traveled to the union hub of Kokomo and told The Kokomo Tribune that businesses refuse to consider moving to Indiana because of its labor laws, despite having everything else going for it.

"I always say, 'It's like being the prettiest girl in school and they call off the prom,'" Daniels told the paper. "(You) look so attractive, just not a lot of people dating."

So for now, he showers the issue with praise without deciding whether it's worth at least a twirl at the dance before he leaves office. Call it the Hoosier equivalent of "leading from behind."

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