Last week, President Obama signed an order to initiate $85 billion in spending cuts under sequestration for the fiscal year. The mandated cuts are the first installment of nearly $1 trillion in across-the-board reductions, including a 2 percent reduction to Medicare reimbursement rates.
The Office of Management and Budget also released a 70-page memo detailing how each federal agency and program would be affected by the sequester, which includes:
- 7.8 percent reduction in discretionary defense spending;
- 5 percent cut to discretionary domestic spending;
- 2 percent cut to Medicare, which takes effect April 1; and
- 5.1 percent reduction to domestic mandatory programs.
Medicaid is exempt from sequestration.