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May 28, 2013

The Sequester Budget Cuts: Southern California's Needy Begin To Feel The Effects

89.3 KPCC Ben Bergman

Maya Sugarman/KPCC
Teacher Angela Gonzalez sings a song with preschoolers before eating their lunch. Although there are other preschools in Monrovia, many families may fall under the income bracket for those schools

After sometimes dramatic warnings from Washington D.C. before the sequester took effect March 1, most Southland residents could be forgiven for greeting the first months of the automatic spending cuts with a shrug.

But for those who receive help from the federal government in one of these categories, they have likely felt the squeeze, or will soon:

  • Housing or unemployment aid.
  • Kids in Headstart.
  • Those with a case in federal court.
  • Researchers receiving federal funds.
  • Travelers to LAX, John Wayne or other airports.

See the chart below for more details on sequester cuts.

The federal government has to cut $85 billion in spending by the end of the fiscal year in October. That's about 2.3 percent of the $3.6 trillion federal budget.

The actual budget cuts are not dramatic – in most cases between 5 and 10 percent. But for many programs, they come after years of steady reductions. The easiest cuts – the lowest hanging fruit – have already been implemented.

Two months in, we wanted to see where the effects are most felt in Southern California. We'll be checking back in as the spending cuts continue. (For more on the nationwide impact check out ProPublica, The Washington Post, or Mother Jones)

Section 8 housing

On a recent afternoon, Nicole Green sat in the lobby of the Housing Authority of Los Angeles near Koreatown.

She was there to turn in paperwork to continue receiving federal housing assistance, known as Section 8.

Like the others waiting, she hadn't heard of the sequester.

"Is it a voting thing?" she wondered.

She may not have heard of it, but she may soon feel it.

About half of the 50,000 households on Section 8 in LA are being told they could see a reduction of $200 to $300 in their monthly rent subsidy, due to the sequester.

Green says any reduction to her $2,000 a month subsidy would be devastating to her and her 6 kids.

That's because after rent and monthly expenses, she's only able to save about $50 a month for emergencies.

"I would have nothing," Green. "I don't know what I would do."

Sitting near Green is Sheryl Reynolds, who has been on Section 8 for more than a decade.

When told about the potential reduction in benefits, Reynolds says it's unfair the poor should have to suffer. But she doesn't think the wealthy should be punished either.

"Just because someone is a millionaire or a billionaire, I don't think they should be losing money," said Reynolds. "I think the budget needs to be spread even throughout."

Doug Guthrie, president of the Housing Authority of Los Angeles, says his agency will likely have no choice but to cut assistance to some of L.A.'s poorest residents.

"For the first time in the history of the Section 8 program, there is a significant reduction in payments being provided to users of that program," said Guthrie.

He says he's trying to minimize the impact of losing about $50 million in federal funding. But it's hard, because housing programs have faced years of cutbacks.

"It's increasingly difficult to provide the level of service that historically we have," said Guthrie.

There are almost 200,000 people waiting to get into Section 8 housing in the city of L.A. and Los Angeles County.

They faced long odds to make it onto the program before. Sequestration makes it a moonshot.

Both the city and the county stopped accepting people into the Section 8 program when the spending cuts took effect.

"It's really a national disgrace," said Larry Gross, executive director of The Coalition for Economic Survival, an L.A.-based tenants rights group.

He points out that people usually turn to Section 8 as an absolute last resort, meaning the streets could be next.

"Most of these people are senior citizens or people with disabilities or families with children," said Gross. "So when rents go up this will increase our homeless population."

Federal unemployment benefits

The automatic spending cuts are also threatening those who receive Federal unemployment benefits, which kick in after someone's state unemployment payments expire after about six months.

"My goal is usually to apply for two jobs a week," said Elizabeth Piñeda, a single mother of two who lives in South Gate. She's been looking for work for almost a year and a half.

"I've only gotten one interview," Piñeda said.

If she has to file for another unemployment extension, she faces a $300 drop in benefits.

After paying rent, that would leave only about $300 a month for her to spend on food and gas for her and her kids.

"If they cut unemployment, people are going to go into the welfare system and it's going to get worse and worse because there's no other way of doing it," said Piñeda.

Head Start

Things are also getting worse for children enrolled in Head Start, which is facing five-percent across the board cuts.

An afternoon preschool class in Monrovia has been around for decades. But after next week, it will close its doors because of the sequester.

"It's kind of sad because some of those children will be lost," said substitute teacher Lawana Nelson.

She worries about her students being shortchanged because the budget cuts mean the school year ends a week ahead of schedule.

"Now since we're leaving early, everything is like a rush because of the budget cuts," said Nelson.

And when the school year starts again in the fall, the budget cuts mean up to 1100 fewer L.A. kids could be enrolled in Head Start.

More on the impact of the sequester across the region:

Targeted for cuts Annual reduction Impact
Federal courts $350 million Federal courthouses in Los Angeles, Santa Ana, and Riverside plan to furlough staff and reduce court services on specific Fridays through the end of August. The next closure is set for Friday, June 21.
Local governments Unknown Federal officals have not informed local governments how the formuals used to disperse federal funds will change, according to Frank Kim, Orange County's Budget Director. "For now it's a lot of monitoring, and less action," Kim said.
Federal unemployment benefits 17.69 percent When someone's state unemployment benefits expire after 26 weeks, they become eligible for 47 weeks of federal benefits. The weekly and maximum benefit on all new federal extensions will now be cut for people who filed on April 28, 2013, or after.
Headstart 5 percent Headstart providers have to cut about 5% from their budgets, according to the National Headstart Association. Options, a San Gabriel-based Headstart provider which serves more than 1,000 children, is shortening the school year by five days. It's also eliminating 57 slots for next school year and closing an afternoon program in Monrovia.
Housing assistance $2 billion According to the non-profit Center on Budget and Policy Priorities, 140,000 families nationwide could lose housing assistance because of the sequester. Hundreds of people locally are effectively in limbo - they have vouchers but can't get housing. Also, tens of thousands on waiting lists are in limbo. "You basically had 300 households - from seniors to homeless to low-income - that qualified for assistance...being told you can no longer (receive) assistance because of sequestration," said Sean Rogan, head of the LA County Housing Authority. The county already has 190,000 people on its Section 8 waiting list. The city of LA had to cancel about 40 of its vouchers when sequestration hit. It's now looking at reducing housing subsidies by about $200 to $300 a month for 24,000 L.A. families.
Funding for sceintific research 5 percent The National Science Foundation, which funds one out of five federally funded research projects on U.S. campuses, has said it will cut back on 1,000 new research grants it was planning to award this year. Medical research would face similiar cutbacks. The Federation of American Societies for Experimental Biology estimated that $180,299,472 in NIH research funding would be lost in California. All departments at USC's Neurogenetic Institute, have had to slash their budgets by 10%.



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