Choices & Challenges: State and Federal Budget Outlook

Budget Deal, But Work Remains

• Congress passed budget, easing sequestration by about 1/3 over next two years
• Deal extends some sequestration cuts, mainly Medicare provider payments, for 2 years to 2023
• Non-defense discretionary spending is still forecast to drop to lowest level on record (since 1963) as a share of GDP
• Unemployment is still high, including in Maryland, and there are still 3 workers for every 1 job opening nationwide
• Yet Congress let emergency long-term UI expire
• 22,900 MDers lost UI benefits on December 28th
• About 1,000 more lose their UI benefit every week
• Congress has yet to pass a Farm Bill, which may mean higher food prices, particularly on milk
• Nation will hit debt ceiling again in late Feb./early March
• Last year Maryland created $100 million fund to protect
  against federal cuts
• Distributed $9 million to Head Start, substance abuse prevention/treatment and seniors in September
• Prolonged government shutdown in October likely cost a substantial portion of remaining fund balance

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