Crain's New York - February 25, 2013 - (Page 6)
Sequestration
threatens $2.1 billion
in federal funding
BY GALE SCOTT
Having endured state Medicaid
cuts, an economic downturn and
Superstorm Sandy, New York’s hospitals are battle-fatigued. But that
hasn’t lessened their alarm over the
latest threat: an estimated $2.1 billion in lost federal funds over the
next 10 years if Congress fails to reduce the federal deficit by March 1.
That’s when the mandated cuts
in U.S. spending on military and domestic programs will automatically
take effect. Sequestration could result in trimming $1 trillion from the
federal budget over the next decade.
According to the New York State
Division of the Budget, the state has
about $5 billion at stake.
Vulnerable programs
Hospitals and research institutions are particularly concerned.
“Congress is serious about these
cuts, and they are playing with fire,”
said Dr. Dennis Charney, dean of
the Icahn School of Medicine at
Mount Sinai.
The automatic cuts put at risk
federal support for more than 20 education programs in New York,
ranging from Head Start to graduate medical education. Unemployment benefits, highway contracts,
air-traffic controllers and food in-
spection workers are also vulnerable.
The breadth of the cuts remains
uncertain. “It’s not just a matter of
when and how much, but what programs would be targeted,” a
spokesman for the state budget office said. Though many of the cuts
are fixed, Congress could decide to
balance the budget in other ways.
As things stand, Medicaid would
not be affected,just Medicare, where
spending would be reduced by 2%.
To avoid raising taxes, however,
Congress could decide to reduce the
federal deficit by removing Medicaid’s protected status,along with that
of other currently
safeguarded
programs like federally
supported children’s
health insurance and
food stamps.
If nothing happens to change the
current plan and the
automatic cuts kick
in, hospitals and
medical research in
New York City would
take a hit.
About
31,800
health care and related jobs could be
lost statewide this year, and nearly
50,000 by 2021, according to the
Greater New York Hospital Association, citing a study by the American Hospital Association.
The AHA study predicts that
496,000 health care and related jobs
will be eliminated across the U.S. in
2013 if the Medicare cuts go
through, a number that could reach
767,000 by 2021.
Efforts to train physicians could
also be impeded because sequestration has put at risk $750 million a year
in Medicare support that New York
teaching hospitals get for graduate
medical education.That would make
it harder to fill a gap in primary-care
doctors and certain specialists.
Slash in research dollars
Research would lose money and
jobs, too. Mount Sinai, for instance,
gets about $200 million in National
Institutes of Health funding annually.The cut would mean an annual loss
of between $12 million
and $18 million.
The NIH budget
faces a 5%, or $1.5 billion, cut. The state’s
nearly $2 billion in
NIH money in 2012
supported 32,249 jobs.
The cuts would cost the
state about $100 million in the first year,
putting at risk about
1,600 jobs.
The NIH would
achieve the savings by
cutting funding of current projects
by 10% to allow it to continue to
fund new proposals.The agency has
already endured a decade of budget
cutting that has reduced spending
by 20%.“You still want to award as
many grants as you can because if
you shut the spigot, it hurts
progress,” Mount Sinai’s Dr. Charney said. “This way, pro gress will
just be slower.” Ⅲ
‘Congress
is serious,
and they
are playing
with fire’
by Andrew J. Hawkins
newscom
Hospitals brace for big cuts
THE
INSIDER
When money and agendas line up
T
he real estate industry has poured more than
$800,000 into City Council Speaker Christine
Quinn’s unofficial campaign for mayor, according to
an analysis by the New York Public Interest Research
Group. That represents 14% of her total haul, which in
January stood at just over $6 million.
In contrast, her rival Bill de Blasio (above) has collected
about $226,000—or 8% of his total—from developers and
landlords, according to NYPIRG.
The numbers lurk beneath the
war of words that broke out
between Ms. Quinn and Mr. de
Blasio, the public advocate, over
her proposal to cap property taxes
for real estate developers who
create affordable housing. Mr. de
Blasio called the plan a “giveaway”
to wealthy developers, noting that
even the mayor had rejected it.
Some in real estate complained
that Mr. de Blasio’s criticism
displayed a lack of understanding
about how affordable housing
gets built in New York. Ms.
Quinn, a former tenant organizer,
said it was impractical to develop
an affordable-housing plan
without the industry’s input.
“It’s no surprise that the real
estate industry has financially
rewarded the speaker,” a de Blasio
spokesman said. “She is passing
off their tax-giveaway plan that
even Mayor Bloomberg said was
too tilted toward developers as her
major housing proposal.”
A Quinn spokesman shot
back: “Chris will put her record
and vision on the issues of housing
up against anyone in this race.”
Two other Democratic
contenders, Bill Thompson and
Comptroller John Liu, have each
received $124,000 from real estate,
less than 10% of their totals.
Ms. Quinn has positioned
herself as a business-friendly
Democrat. As of December, she
had received 67% of donations in
the race made by employees of
100 politically active corporations
in a New York Times analysis.
NYPIRG’s calculations, by the
group’s legislative operations and
research coordinator, Bill Mahoney,
totaled donations from companies
solely involved in real estate and
from construction companies that
focus primarily on residential and
commercial development, as well
as a couple of investment firms that
focus on real estate.
“They’re hoping to gain access
and influence,” said NYPIRG’s
Gene Russianoff, “and this is a
perfectly legal way to do it.”
Politicians sometimes play that
game as well. Last week, Sen.
Charles Schumer described how he
helped enlist politically connected
businesspeople to lobby Republicans in Congress to pass a $51
billion Superstorm Sandy aid
package, which they did in January.
The senator, working with
Association for a Better New York
Chairman Bill Rudin and
Partnership for New York City
President Katherine Wylde,
compiled a list of New Yorkers
who had contributed campaign
money to House Speaker John
Boehner, Majority Leader Eric
Cantor and Senate Minority
Leader Mitch McConnell.
The effort kicked off in midDecember, Mr. Schumer said at a
breakfast forum in lower
Manhattan hosted by Mr. Rudin’s
organization and the Downtown
Alliance, a business group. Among
the executives tapped to lobby
Republicans were Kenneth Langone,
co-founder of Home Depot; Lloyd
Blankfein, chairman and CEO of
Goldman Sachs; Stephen
Schwartzman, CEO of the
Blackstone Group; Henry Kravis,
co-founder of private-equity firm
Kohlberg Kravis Roberts & Co.;
and Terry Lundgren, president and
CEO of Macy’s Inc.
“Each of these people called
three, four, five times,” Mr.
Schumer said. “It really worked.” Ⅲ
Crain’s Insider, our award-winning politics newsletter, is
now a blog. Read it every day at www.crainsnewyork.com/insider
6 | Crain’s New York Business | February 25, 2013
http://crainsnewyork.com
http://crainsnewyork.com
http://www.crainsnewyork.com/insider
Table of Contents for the Digital Edition of Crain's New York - February 25, 2013
IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
BUSINESS PEOPLE
OPINION
ALAIR TOWNSEND
GREG DAVID
REPORT: DIGITAL NY
THE LIST
CLASSIFIEDS
FOR THE RECORD
REAL ESTATE DEALS
SMALL BUSINESS
NEW YORK, NEW YORK
SOURCE LUNCH
OUT AND ABOUT
SNAPS
Crain's New York - February 25, 2013
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