WASHINGTON — The failure of the congressional “supercommittee” to reach a deal on the federal deficit could hit Maine hard.
Half the cuts are aimed at defense, so Bath Iron Works and Portsmouth Naval Shipyard could be vulnerable.
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Local hospitals and physicians are girding for cuts in their Medicare reimbursements. Head Start, the early education program relied on by many low-income Maine families, is on the chopping block.
Homeland security is not immune, either, and fewer border agents on Maine’s northern border could be the result.
While these cuts wouldn’t start until 2013 and aren’t inevitable, many lawmakers and advocates remain very concerned that they could do a lot of harm.
SHIPBUILDING
Maine’s shipbuilding yards couldn’t have taken much comfort from a recent letter that Defense Secretary Leon Panetta sent to Congress, said Loren Thompson, a military analyst with the Lexington Institute, a think tank in Arlington, Va.
Panetta said the automatic cuts to defense would result in a military with the smallest number of ships since 1915. Panetta did not single out the destroyers built at Bath Iron Works as targets for elimination, Thompson said.
Still, the General Dynamics-owned facility and its 5,400 workers, like many defense installations, would face a “lot of uncertainty,” Thompson said.
The Portsmouth Naval Shipyard in Kittery and its 4,500 civilian workers could be in a more precarious situation. Panetta singled out submarines for possible cuts, and Portsmouth overhauls submarines. Portsmouth, one of four remaining Navy shipyards, almost was closed during the last round of military base closures, Thompson noted.
“Portsmouth is more vulnerable than BIW,” Thompson said. He predicted that the defense cuts would be scaled back or repealed before 2013, but added, “We are probably going into several months to a year of uncertainty … so nothing is safe.”
MEDICARE
With a higher percentage of seniors than most states, a Medicare payment cut to providers hits disproportionately hard in Maine, say members of the state’s medical community.
Maine’s 39 hospitals would lose about $231 million over 10 years if the automatic cuts go into effect, said Jeffrey Austin, vice president of government affairs for the Maine Hospital Association.
Maine hospitals receive about $1 billion a year in Medicare revenue. The Medicare payment cut is limited to 2 percent.
Still, “It’s a very significant negative impact on Maine hospitals,” Austin said.
Maine’s 4,000 physicians, almost all of whom see Medicare patients, also worry about the cut, said Gordon Smith, executive vice president of the Maine Medical Association.
With 262,000 Medicare patients — 20 percent of all patients — Maine has the second-highest percentage of elderly patients in the nation to Florida, he said.
But doctors also worry Congress will fail this year to do what has become a regular event: boost an old Medicare reimbursement formula set too low for physicians to cover their costs. If that “doc fix” doesn’t happen this year, the result would be a 27 percent cut in Medicare payments, Smith said.
HOMELAND SECURITY
Efforts to guard Maine’s northern border could be stretched thinner by the automatic cuts.
The Washington-based centrist think tank Third Way says the cuts would force the U.S. Border Patrol into a tough choice: If it didn’t want to give up many agents on the southern border, it would have to make deep cuts along the northern border.
The automatic trigger could eliminate the jobs of more than 5,300 border agents, Third Way estimates. But there are fewer than 2,300 border agents along the length of the northern border, 203 of them in Houlton, according to figures compiled by a Third Way report showing the potential impact of the cuts.
Maine’s overall federal homeland security funding already has been declining. The Maine Emergency Management Agency received a $6.6 million homeland security grant for 2010, money it distributes to local and county agencies to help with projects like updating communications systems. That grant totaled $5.1 million this year, said Bruce Fitzgerald, MEMA deputy director.
ENERGY ASSISTANCE
A federal heating assistance program for the poor vital to low-income Mainers is facing big cuts this year, and isn’t sheltered from more in 2013 if the automatic trigger is pulled, advocates say.
Low-Income Home Energy Assistance Program funds can mean the difference for some Mainers between “heating your home and freezing,” said Mark Sullivan, communications director for the Maine Center for Economic Policy, an advocacy group.
While it isn’t clear yet how much the trigger might affect LIHEAP funding, any more cutbacks “could be catastrophic,” he said.
Last winter, 63,802 Maine households, with an average income of $16,757, got LIHEAP benefits averaging $802 over the entire winter heating season, according to MaineHousing, which oversees the program for the state.
But President Obama’s 2012 budget proposed cutting LIHEAP to $2.57 billion from $4.7 billion. Congress hasn’t approved final LIHEAP funding, and the White House last month approved the release of $1.7 billion. If no more LIHEAP funding is approved this year, Maine would receive less than $24 million, down from about $55 million last winter.
HEAD START
In a state where more than 21 percent of children under age 5 and 17 percent of children under age 18 live in poverty, the highest rates in New England, cuts to programs like the Head Start early education program would cause real hardship, advocates say.
The Maine Children’s Alliance cites the poverty figures in its 2011 Maine Kids Count report. The advocacy organization says more than 3,800 Maine children are currently enrolled in Head Start programs run by local nonprofits.
But Head Start’s federal funding could go from $7.5 billion to as low as $6 billion, according to an estimate by the Federal Funds Information for States, a joint service of the National Governors Association and the National Conference of State Legislatures.
That type of cut would be “devastating” to Maine’s Head Start program, said Judith Reidt-Parker, the alliance’s early childhood education policy analyst.
Most of Maine’s Head Start money comes from the federal government – $28.5 million, compared to $3.8 million provided this year by the state, Reidt-Parker said.
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