November 18, 2013

Maine aid agencies fear further cuts by Congress

This year’s financial battles in Washington have put agencies’ budget plans in limbo.

By Kevin Miller
Staff Writer

WASHINGTON — As the head of Portland’s housing assistance program, Mark Adelson is ending what’s been a financially stressful year with both a sense of relief and dread.

The relief comes from the fact that, as of last week, the Portland Housing Authority expected to have enough money to avoid sending notifications to some low-income families that their Section 8 assistance is about to run out because of federal budget cuts.

The dread stems from what will happen if the divided Congress is either unable or unwilling to eliminate the next round of “sequestration” cuts slated to begin early next year. Right now, Adelson is headed into next year “totally uninformed.”

“It’s a very unsettling feeling to think that I may have to make the decision to eliminate people from the program and end their assistance,” Adelson said. “Every housing authority across the country is in the same boat right now. We are all just holding our breath and waiting to see what happens.”

Program managers throughout Maine who rely on federal funds are feeling similarly uncertain and apprehensive.

“It certainly is on my mind,” said Noelle Merrill, executive director of the Bangor-based Eastern Area Agency on Aging, which provides meals and assistance to elderly and disabled populations in four counties. “I know there are more cuts coming.”

The sequestration budget cuts – $1.2 trillion in mandatory reductions over 10 years – are a central sticking point in budget negotiations between Senate Democrats and House Republicans. The 29 House and Senate negotiators – a group that includes Sen. Angus King, I-Maine – have been given one more month to agree on the first new federal budget since 2009.

Democrats want to replace the cuts by offsetting them with “new revenues” largely by eliminating tax credits and “loopholes” that benefit the wealthy and corporations. Republicans generally oppose anything they perceive as a tax increase to fund additional spending.

While some Republicans now accept the sequester as an effective – if blunt – deficit reduction tool, many in the party want to carve out exceptions for defense programs now bearing 50 percent of the cuts. And they see sequestration as leverage toward more ambitious, long-term goals: changes to entitlement programs such as Medicare and Social Security.

“We’re trying to find common ground, but we’re not there yet,” House Budget Committee Chairman Paul Ryan, R-Wis., said last week.

But Congress hasn’t given worried agencies many reasons for optimism recently. Sequestration is the product of failed negotiations on the federal deficit in 2011. A polarized Congress also allowed the country to go over the “fiscal cliff” – if only briefly – earlier this year; caused a 16-day government shutdown; and nearly drove the nation into a historic default.

The visible impacts of the first year’s sequestration cuts were far less dire than some had predicted, which has clearly softened political urgency in Congress to correct the cuts. Yet there were impacts.

Millions of federal employees were furloughed, including several thousand in Maine. The Maine Department of Education was slated to lose more than $7 million, largely from programs that support disabled children and those in need of remedial education.

Navy officials cited the sequestration cuts as one factor in their decision to scrap rather than repair the USS Miami, a nuclear submarine severely damaged by arson at the Portsmouth Naval Shipyard. And because of the budget uncertainty, the Navy held off awarding a fifth destroyer contract – valued at more than $700 million – to Bath Iron Works until Congress can find additional money.

In a recent letter to Sen. Jeanne Shaheen, D-N.H., a union leader at the Portsmouth Naval Shipyard warned that the financial uncertainty combined with the recent shutdown have taken a toll.

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