The President’s Budget for Fiscal Year 2013

The President of the United States recently released his budget for the federal fiscal year 2013. As is the case every year, additions and subtractions must be made in order to keep the country solvent, fund new projects, and take money away from projects that are no longer deemed as necessary. Of course, the federal fiscal year 2013 budget isn’t concrete just because the president releases it. The senate and house will debate it for another few months until everything is finalized. The entire process is rather time consuming, but it all starts with the President’s budget and this is why knowing and understanding what is included in the President’s budget is important.

When it comes to the medical industry, the newly constructed financial budget for 2013 does include some cuts to the healthcare system. As one of the largest expenditures to the federal government, this is to be expected, as the President attempts to balance the budget and slow the accumulation of national debt. Starting in October 2012, the President has outlined cuts of nearly $360 billion in Medicare, Medicaid and other programs over a 10 year span (averaging out to roughly $36 billion annually). The President has outlined the cuts would come mostly through the adjustment of provider reimbursement cuts and tweaks to drug reimbursement, although he plans on keeping all funding for biomedical research at the national level at around $31 billion.

Budget Cuts

Cuts are required, because without them it is protected that by the year 2022, the federal debt will consume nearly 77 percent of the overall gross domestic product, which is the highest percentage since the 1950s. The budget is relatively higher than what the President had initially projected back in 2011, with slightly more spending expected.

The President has outlined how the country is going to pay for the additional $492 billion in increased spending, and this is with $261 billion in excise tax revenues, plus another $231 billion in savings from Overseas Contingency Operations reductions to total the $492 billion dollars. Of course, this is yet to be seen, as the house and senate still get to take their turn at adjusting the current budget proposal.

Planning for the Future

We expect an interesting and contentious summer as the nation prepares for the national election. Healthcare cuts and spending adjustments will remain a central issue in local and national campaigns.

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Photo courtesy of Violentz