Brave New World: Advocacy in the Era of

Deficit Reduction

Emily Holubowich, MPPSenior Vice President

CRD AssociatesFollow Me! @healthfunding

Join the Twitter Conversation #NDDUnited

Overview• During this presentation I’ll cover:

– Key budgetary concepts– Why deficit reduction is important– How to reduce the deficit (according to experts)

• What’s been done to date– What austerity means for your members– Advocacy efforts to date– Suggested strategies

Deficit vs. Debt• Deficit is difference between receipts & outlays

– Receipts include money the government brings in from taxes, fees, and other income

– Outlays include all spending on programs, and interest payments on the debt

• Debt is total amount of money owed to creditors– Accumulations of deficits– US Debt ~ $16 trillion (and counting)

Mandatory vs. Discretionary

• Discretionary spending is at Congress’ “discretion”– “Defense” discretionary is military spending– “Nondefense” discretionary or “NDD” is

everything else• Research, education, food/drug/airline/public safety

• Mandatory spending enacted by law– Entitlement Programs (e.g., Medicare)

• To change spending, must change eligibility rules

ABSENT REFORMS, DEBT WILL SKYROCKET IN THE COMING DECADES

1972

1976

1980

1984

1988

1992

1996

2000

2004

2008

2012

2016

2020

2024

2028

2032

2036

2040

2044

2048

2052

0%

50%

100%

150%

200%

250%

% o

f GD

P

Note: Unlike current law, the Bipartisan Policy Center’s Plausible Baseline assumes that the 2001, 2003, and 2010 tax cuts are extended, the AMT is indexed to inflation, Medicare’s physician payment rates are maintained at their current rate (the “doc fix”), the looming sequester from the Budget Control Act of 2011 is lifted, and troops stationed overseas decline to 45,000 by 2015

Debt breaches 100% of GDP in 2027

Sources: Congressional Budget Office (January 2012) and Bipartisan Policy Center extrapolations

HEALTH CARE COSTS ARE THE PRIMARY DRIVER OF THE DEBT

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

2032

2034

2036

2038

2040

2042

2044

2046

2048

2050

2052

0%

2%

4%

6%

8%

10%

12%

14%

Health Care Spending

Social Security

Discretionary Spending (Defense and Non-Defense)

Other Mandatory Programs

% o

f GD

P

Sources: Congressional Budget Office’s Alternative Fiscal Scenario (January 2012), additionally assuming that troops overseas decline to 45,000 by 2015; Bipartisan Policy Center extrapolations

REVENUE UNDER CURRENT POLICIES SIMPLY WILL NOT BE ENOUGH

1998 1999 2000 200115

16

17

18

19

20

21

22

18.0%

19.9%19.5%

20.6%

19.8%

(projected)

%of

GD

P

Revenues Averaged 20% of GDP When the Budget Was Balanced…

Source: Congressional Budget Office alternative fiscal scenario (January 2012)

Fiscal years 2012-2022

Average

…and that Was Before the Baby Boomers Arrived

How Do We Fix It?• Several bipartisan, expert commissions

recommend “balanced approach”– Reduce spending

• Defense and nondefense discretionary spending• Mandatory spending

– Entitlement reform

– Increase revenue• Tax reform

• Total deficit reduction package of $4 trillion needed to stabilize the debt

Budget Control Act: Reigning in Deficit• Two-phase debt ceiling increase

– Phase 1: $900 billion through end of 2011– Phase 2: $1.2-$1.5 trillion through November

2012• Increases contingent upon offsets

– Phase 1 offset: discretionary caps over decade• FY 2013 capped at $1.047 trillion

– Phase 2 offset: determined by “supercommittee”• If no agreement, “sequester” takes effect• Budgetary tool designed to force compromise

Sequester: The Price of Failure• Effective January 2, 2013

– Across the board cuts of $984 billion over 10 years, or $109 billion annually

• Cuts equally divided between defense and non-defense– Non-defense discretionary: $322 billion (8%)– Defense discretionary: $492 billion (12%)– Medicare: $123 billion (capped at 2%)– Other mandatory $47 billion

• Social Security, Medicaid, and low-income support programs exempt

Impact of Unbalanced Approach?• Efforts have focused on spending cuts, only

– “NDD” now lowest level since Eisenhower• Cut by 10 percent, on average since FY 2010• By 2022, another 7 percent cut under Budget Control

Act spending caps• More cuts by “sequestration” January 2013

– For “NDD” alone:• 1 million jobs lost• $120.5 billion Gross State Product lost • $63 billion income lost

If You Do the Math…

• Completely *eliminating* all NDD programs won’t balance the budget– Cuts alone won’t stop deficits and debt

• Experts agree: balanced approach needed to reduce the deficit and debt

But This Is POLITICS!• Republicans’ fix: exempt defense

– Make NDD and entitlements bear the brunt• Democrats’ fix: balanced approach where

“rich pay fair share”– Balance or Bust! White House standing ground

• No carve outs• No exemptions• No delays

Driving Toward the “Fiscal Cliff”• CR at current levels through March 2013

– Avoids shutdown showdown pre-election• Nothing substantive before election

– No political will to make tough decisions• Hellacious lame duck

– Bush tax cuts expire– “Extenders” package expires

• Unemployment benefits, payroll tax holiday, Medicare physician payment fix

– Sequester!

The Tea Leaves• Lame duck scenarios

– Balanced approach • How balanced is “balanced?”

– Kick the can• How long?• What’s the offset, if any?

– “Carve-out” bills• Exempt defense• Exempt Medicare

– Cancel altogether• How do we react?

– Know when to hold ‘em, and when to fold ‘em– You can’t always get what you want

Fiscal Discipline = Advocacy Conundrum

• Post-BCA World– Game changer for appropriations advocates

• No sacred cows• Lowering the bar for measuring success• Where money comes from now matters

– Free lunch is over• Deficit/debt is crisis, requires action now• Associations face tough choices

– Actions to save one priority may undermine another

What We’re Doing About It• Budget Control Act defines us as community• “All for one” approach to advocacy

– NDD Summit developed as ad hoc “network of networks” to coordinate:• Education of policymakers, policy professionals, and

public• Advocacy for a balanced approach to deficit reduction

that does not include further cuts to NDD programs

NDD Community NDD Summit

NDD Steering Committee

• All those interested in protecting NDD

• 60 leaders of coalitions• Vet materials, strategy• Disseminate

information, guidance

• 15 individuals• “Staff” of NDD Summit

Activities to Date• Inside Beltway

– Customizable NDD fact sheet– NDD Sign On Letter

• 3,000 national, state, local organizations– NDD Rally

• 350 participants; trending on Twitter– NDD Call/Tweet Day

– 400 tweeters, 500K reached, 1.75 million impressions– Media Visibility

• WashPo, HuffPo, PBS, NYTimes; trade press

• Outside Beltway– Grassroots Toolkit– Local editorials

Tools to Engage• “NDD United” Grassroots Toolkit available at

www.publichealthfunding.org– “Deficit Reduction and You” video tutorial– Sequestration FAQs– Tips for Editorials

• With sample Op Ed, letter to editor– Town Hall Tip Sheet

• Sample questions & flyer for distributing at events– Press Event Tip Sheet– Social Media Tip Sheet

Surviving in a Post-BCA World…

Associations *should* continue to advocate for funding…

To advance these priorities, must associations go where they haven’t gone before…?

Contact Information

Emily J. Holubowich, MPPSenior Vice President

Cavarocchi Ruscio Dennis Associates∙ ∙202.484.1100

eholubowich@dc-crd.comFollow Me! @healthfunding