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Sequester Still Punishes the Poor

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The failure of Congress to pass a budget is being felt by the poorest Americans, as cuts to subsidized housing groups continue.  The Budget Control Act, commonly known as the sequester, has slashed a trillion dollars in federal funding to public programs across the board.  The New York City Housing Authority, (NYCHA), the nation’s largest public housing authority, announced that over 200 million dollars in funding have been lost since the sequester took effect on March 1st.  Overall, as many as 150,000 households that rely on vouchers to pay rent could be affected by the cuts.  Most housing authorities are dealing with the cuts through canceling new vouchers that were due to be issued this summer.  Other units may have to raise rent or default on mortgages.

John Rhea said in a press release that the mandatory cuts “severely hinder” the work of the housing authority.  The NYCHA chairman continued by assuring residents the commitment to maintain their developments and meet the goals to eliminate the backlog of repair requests this year.  Other ways the organization is dealing with budget cuts have included lay-offs, a hiring freeze and possible furloughs.  The plan to issue 5,000 new vouchers had to be canceled.

The voucher program for subsidized housing began with programs created by the Department of Housing and Urban Development during President Nixon’s term.  This is the first time the program has experienced any significant cuts.  The vouchers make it possible for low income households, especially seniors or those who are disabled, to be able to afford private rental housing.  If the vouchers are lost, it is possible many will lose their apartments and become homeless or institutionalized.  Some building owners rely on the vouchers to keep their building running, and some landlords also worry about defaulting on their loans.  This could put thousands of people on the streets and threaten the safety and health of not only New York, but cities across the country.

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Sequester Cuts Take Toll on Nonprofit Hospitals

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U.S. sequestration cuts have hit, and some organizations are feeling it more than others. Nonprofit hospitals, which are already on fragile financial ground, started out this month dealing with the 2 percent cut from Medicare reimbursements, which will likely lower their already modest revenues.

Nonprofit hospitals differ from government owned public hospitals and privately owned for-profit hospitals. They function as a nonprofit corporation would, have tax-exempt status, are often affiliated with a religious denomination, and account for the majority of hospitals in the United States. Medicare is the national health insurance program for the elderly, and its modest-sounding 2 percent cuts will likely lower revenues by a total of $11 billion in 2013 alone.

“The cuts exacerbate an already challenging operating environment for not-for-profit hospitals as many already face low revenue growth from both governmental and private insurance payers,” read a report from Moody’s, whose CEO is Raymond McDaniel.

“Moreover, there is a perennial risk that the so-called ‘doc fix’ will not be renewed, which would force reductions to physician reimbursements,” added Moody’s.

And since the recession in 2007, nonprofit hospitals have seen increased numbers of people seeking treatment there as opposed to traditional hospitals. That’s no surprise, since nonprofit hospitals generally serve large groups of low-income populations—and the recession bolstered that number.

Moody’s has given nonprofit hospitals a negative outlook for the fifth year in a row. Some worry that the U.S. Congress’s eventual negotiations to reduce the country’s debt and national deficit will further endanger nonprofit hospital.