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On the Edge: Uncertainty Grows over HIV Budgets

TAGline Winter 2013

The HIV community is bracing for impact as acrimonious federal budgetary battles rage on.

by Coco Jervis

The eleventh hour “fiscal cliff” deal reached by Congress and the Obama administration on New Year’s Eve leaves much to be desired. By postponing the sequestration process until March 1, 2013, millions of dollars in funding for critical HIV research initiatives are still at stake, and potentially devastating cutbacks to lifesaving HIV treatment, care, housing, and prevention programs that have saved and enriched the lives of countless individuals here and abroad remain a significant risk.

The deal, titled the “American Taxpayer Relief Act of 2012,” reduces tax breaks for many high-income households, extends unemployment insurance benefits, and imposes a delay on mandatory across-the-board sequestration cuts—temporarily offset by a limited number of new discretionary spending cuts and tax policies. More worrisome, however, is the looming triple threat of the federal government hitting the debt ceiling, the expiration of the current continuing resolution, and the reset of sequestration cuts—all of which will unfold over the next two months.

Considerable Consequences

It’s difficult to overstate the potential impact of sequestration or other entitlement-program cuts on the health and well-being of those living with, and at great risk of, HIV infection. In places where there are a high percentage of poor people, any decline in federal funding for much-needed community and family services often has rippling and catastrophic effects on people’s lives. For example, states that rely heavily on AIDS Drug Assistance Program (ADAP) monies for their patient populations could see a rise in ADAP waiting lists again. Additionally, beleaguered community-based organizations (CBOs) have much to be concerned about, with tightening of the CDC’s HIV prevention budgets and political uncertainty over the Ryan White program reauthorization, which provides critical safety-net funding for wraparound and supplemental services for people with HIV or those vulnerable to infection. What’s more, many CBOs will need to transform their infrastructure and services to accommodate the era of expanded health care coverage for millions of Americans under the Affordable Care Act.

The U.S. response to the global HIV/AIDS epidemic will also likely be affected. If the sequester is allowed to happen, nonsecurity discretionary spending will likely be subjected to a 5.1% across-the-board cut. In terms of global health funding allocated in the State and Foreign Operations bill, this could mean about $482 million being slashed—a great percentage of which would affect PEPFAR, Global Fund, and Blueprint for an AIDS-Free Generation funding.

Finally, if the sequester goes through, a reduction of around $181 million in AIDS research funding is expected for National Institutes of Health (NIH) AIDS research programs. Any further cuts to NIH will have the clear and devastating effects of undermining our nation’s leadership in health research and our scientists’ ability to take advantage of the expanding opportunities to advance health care.

A Budgetary Mess

The lead-up to sequestration began anticlimactically on May 16, 2011, when the United States reached a debt ceiling of $14.3 trillion dollars. As a result, congress and the Obama administration spent the summer tortuously hammering out the Budget Control Act of 2011 (BCA), which raised the debt ceiling temporarily and outlined a budget-reduction framework of $2.3 trillion over ten years. Congress implemented $1.2 trillion in discretionary spending cuts and commissioned the 12-member bipartisan, bicameral “Super Committee” tasked with identifying an additional $1.2 trillion in deficit reduction through tax and entitlements reform. The Super Committee’s failure to develop a deficit-reduction plan by their November 2011 deadline triggered the ticking sequestration-process time clock. Mandatory across-the-board spending cuts to most federal programs were slated to begin in January 2013 if an alternative compromise could not be reached.

Throughout 2012, lawmakers bickered and thwarted every opportunity to come up with a compromise that would have averted sequestration—punting all negotiations until after the election. This culminated in the dramatic December march to the fiscal cliff. Republicans sought deep budget cuts to discretionary spending along with massive entitlements reform; Democrats demanded discretionary cuts balanced with revenue hikes. The compromise, finally reached on New Year’s Eve, only partially resolved the fiscal-cliff crisis by extending some of the Bush-era tax cuts and postponing the sequestration process until March 1, 2013, all the while failing to substantively address fundamental issues of debt control and federal spending. Further, congressional inaction on sequestration has delayed other aspects of the federal budget including the release of the president’s FY 2014 budget request—which now won’t take place until after March 1.

As deadlines for these ongoing budget negotiations draw nearer, the precarious financial position of the HIV community has come into sharper focus, particularly while so many of the National HIV/AIDS Strategy goals remain elusive. A strong financial commitment, not sweeping cuts to research and programming, is needed if we are to succeed in reducing HIV incidence, increasing access to care and optimized health outcomes, and curtailing HIV-related health disparities. There are over 1.2 million people living with HIV in the U.S., the highest number in the epidemic’s 30-year history, and more than 50,000 Americans become infected every year—a rate that has remained fairly stagnant over the past 20 years.

For HIV activists, the near- term challenge is to capitalize on the two-month delay of sequestration to hammer home the advocacy messages to lawmakers about the impact these cuts will have on the millions of people living with HIV here and around the world who rely on lifesaving HIV treatment, care, and prevention programs. The reality is that blind, indiscriminate, across-the-board cuts, made regardless of program demands or effectiveness, is poor, shortsighted policy—it would harm our public-health efforts to reduce HIV incidence nationally, and undermine progress and investments already made in the domestic and global HIV fight.