Obama budget cuts would hit Maryland

PoliticsHealthBudgets and BudgetingNational GovernmentPublic EmployeesNational Institutes of Health

Labor unions that represent government workers — and some Maryland Democrats — criticized the budget President Barack Obama unveiled Monday for cutting $27 billion in federal employee pensions while offering what they called a modest, half-percent raise.

The $3.8 trillion spending plan for 2013 would trim $4 trillion from the national debt over a decade through a combination of tax increases on the wealthy and spending cuts. Many of those reductions would affect Maryland, including funding for Chesapeake Bay cleanup, teaching hospitals such as Johns Hopkins and research grants awarded by the Bethesda-based National Institutes of Health.

Sen. Benjamin L. Cardin praised the White House for taking a "balanced approach" to deficit reduction but said he is concerned about proposed cuts to the federal workforce and bay programs as well as a proposed freeze in funding for the NIH.

"The men and women of these federal agencies are on the front lines keeping our nation safe from diseases and bioterrorism, and they are on the cutting edge of finding the cures for cancer and Alzheimer's and so many other crippling ailments," the Maryland Democrat said in a statement.

Obama's budget, which is unlikely to advance in the bitterly divided Congress, would require federal employees to increase their contribution to their own retirement plans by 1.2 percent over three years. The plan would end a two-year salary freeze by offering those workers a half-percent cost-of-living raise.

Maryland is home to nearly 300,000 civilian federal employees — about 10 percent of the state's workforce.

"The White House and congressional leaders should not treat federal employees' paychecks like an ATM machine," said John Gage, president of the American Federation of Government Employees. "Federal employees have already sacrificed more than the president is asking from the big banks."

Rep. Elijah E. Cummings called the proposed salary bump "modest but much-needed help," but he also said federal employees have already done their share to reduce the deficit. Taxpayers saved $60 billion as a result of the pay freeze, which began in 2011.

"Federal employees should not be asked to contribute any more toward deficit reduction while House Republicans refuse to ask millionaires and billionaires to contribute even a penny," the Baltimore Democrat said.

The proposal represents a far smaller increase in employee retirement contributions than what some Republicans in Congress have sought, and it hews closely to recommendations made by several bipartisan panels on deficit reduction. Federal government workers earn 16 percent more than their counterparts in the private sector, according to a Congressional Budget Office report released in January.

Republicans largely panned the proposal, arguing that much of the deficit reduction included in the plan results from accounting gimmicks. Rep. Andy Harris, one of Maryland's two Republicans in Congress, said Obama "once again refuses to take leadership on the greatest challenge facing our nation today: getting our debt and deficit under control."

For many Maryland programs, the budget proposal was a mixed bag.

Maryland environmentalists applauded a $15 million increase targeted for Chesapeake Bay restoration but noted that other national programs that affect water quality would take a hit. The state could lose nearly $7 million in a loan fund that helps local officials pay for sewer system upgrades, for instance.

Doug Siglin, the top federal lobbyist for the Chesapeake Bay Foundation, said the loan program "provides critical assistance" to reduce sewage and storm water runoff.

Hospital officials, meanwhile, said they oppose a $10 billion cut in federal payments to teaching hospitals. Hospital groups have long argued that the cuts in graduate medical education funding would stifle their ability train quality doctors. But the administration noted that an independent government panel has said the hospital payments are far higher than the costs associated with teaching students.

"We are greatly concerned that any cuts … would worsen an unprecedented projected shortage of physicians," Dr. Edward D. Miller, dean and chief executive of Johns Hopkins Medicine, said in a statement. "Reduced support for teaching hospitals also would jeopardize the supply of nurses and other health professionals."

A central and controversial feature of the administration's budget is a proposal to ask the wealthy to pay more in taxes to reduce the deficit — an idea that will dominate the debate in Washington heading into the November election. The spending plan includes $1.5 trillion in increased taxes, including the expiration of George W. Bush-era income tax cuts for top earners and higher rates on investment income.

That idea appealed to Democrats, who have sought a mix of tax increases and spending cuts.

"The president's budget is a budget that's good for the country, it's good for jobs [and] it's good in terms of nurturing a very fragile economy," said Rep. Chris Van Hollen, a Montgomery County lawmaker and the top-ranking Democrat on the House Budget Committee.

"We've got to be very careful not to mess up a very fragile recovery," he said.

The budget calls for keeping NIH funding even next year at about $31 billion. Heather Higginbottom, deputy director of the Office of Management and Budget, said the agency nevertheless expects to increase the amount of grants it awards by 7 percent by finding ways to reduce the cost of administering those grants.

Maryland institutions received $1.7 billion in NIH research and other funding in 2011.

"We think we've done a fair job with NIH," Higginbottom said. "There's a lot of difficult tradeoffs."

Timothy B. Wheeler and the Tribune Washington bureau contributed to this report.

john.fritze@baltsun.com

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Maryland and the budget

President Obama's proposed $3.8 trillion budget for 2013 would have a broad impact on Maryland. It calls for:

•Increasing by 1.2 percent the amount federal employees contribute to their retirement

•Freezing funding for the Bethesda-based National Institutes of Health at about $31 billion

•Boosting Chesapeake Bay cleanup funding by $15 million while cutting other programs that affect the bay

•Cutting federal money for teaching hospitals, including those at Johns Hopkins and the University of Maryland.

— John Fritze

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