Tags: Washington

Sequestration Cuts Hit Cancer Patients While Billions Wasted

By , Associate Editor, Money Morning • @DavidGZeiler •

As of April 1, cancer clinics began turning away thousands of Medicare patients because of sequestration spending cuts while the University of Iowa is using almost $900,000 of taxpayer money to study whether there is any benefit to sex among New Zealand mud snails.

It's taken about a month, but the mandated federal spending cuts of sequestration have finally started to have a real impact.

Not as dire an impact as President Barack Obama warned about in the weeks preceding the sequester, but the consequences are growing more serious every day.

But what's most galling about all this is that despite the real harm the sequestration cuts are causing, wasteful government spending has continued unabated.

The Pain of Sequestration Has Started

When the scary scenarios described by the Obama administration failed to materialize on March 2, most Americans dismissed sequestration as just so much Washington nonsense.

But the $85 billion in sequestration cuts are real - it's just that they're taking place in slow motion.

The situation with the cancer patients is just the latest and most alarming example of how sequestration has started to harm important government functions even as billions of dollars in taxpayer money is still being spent on hundreds of wasteful government programs.

No one intended for cancer patients to be affected. But the complex Medicare formulas used to compensate the clinics resulted in an unexpected reduction - one that makes it impossible for them to administer the necessary drugs without suffering financial losses.

"If we treated the patients receiving the most expensive drugs, we'd be out of business in six months to a year," Jeff Vacirca, chief executive of North Shore Hematology Oncology Associates in New York, told The Washington Post. "The drugs we're going to lose money on we're not going to administer right now."

But that isn't the only disruption sequestration is causing, and we're not talking about the politically motivated move by President Obama to suspend tours of the White House (savings: $18,000 a week).

Across the nation, thousands of people have either been laid off or furloughed, with more being announced every week.
The FAA said it will close up to 149 control towers at regional airports in June. The U.S. District Court in Los Angeles said it will close its clerk's office for seven Fridays over the next few months.

If nothing else, sequestration has provided a stark illustration of just how upside down Washington's spending priorities are.

Wasteful Government Spending As Rampant as Ever

As essential services gradually erode, somehow most wasteful government spending has eluded the sequestration cuts.

Here at Money Morning we have documented many of these frivolous programs. Just since sequestration began, even more have come to light:

  • Sex Life of Snails: The National Science Foundation awarded $876,752 to the University of Iowa to determine which benefits New Zealand mud snails more: sexual reproduction or asexual reproduction (the snails have the option of either). The ultimate goal is to find out whether sexual reproduction has any genetic advantages over asexual reproduction.
  • Strings Attached: Over the past five years, the federal government has spent $1.19 million on puppet-related programs, including a $199,754 research grant to the University of Central Florida for "Efficient Control and Transmission of Digital Puppetry" and $358,410 to Northwestern University for "puppet choreography and automated marionettes."
  • Warp Factor Waste: The IRS spent $60,000 on a training video in which employees dressed up as characters from the original "Star Trek" TV series. The IRS maintains a TV studio that costs taxpayers $4 million a year.
  • A Wild Idea: The Department of the Interior's Bureau of Land Management plans to spend $2 million over the next five years on a program that will teach inmates to train and care for wild horses and burros.
  • Not-So-Fine Art: The Obama administration has spent almost $400,000 on oil paintings of assorted former cabinet officials, such as Ed Schafer, George W. Bush's agriculture secretary for one year (2008), Lisa Jackson, President Obama's recently departed Environmental Protection Agency head, and John Bryson, who served as President Obama's Secretary of Commerce for just eight months.

While these examples might seem trivial compared with the billions the U.S. government spends every day, Rep. Greg Walden, R-OR, recently told Fox News they're just "indicative of the problem."

Walden said there are plenty of less dramatic, but far larger examples of wasteful government spending that could be used to offset some of the most painful sequestration cuts.

"The [Government Accountability Office] came out with a report that said the federal government spent $115 billion in 2011 on payments that weren't "appropriate.' In other words, they aid people and contractors they shouldn't have," Walden said. "That's where the real money is. Why don't we start there?"

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David ZeilerDavid Zeiler

About the Author

Browse David's articles |

David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.

Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.

Dave has a BA in English and Mass Communications from Loyola University Maryland.

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