Medicare cuts comprised 58% of all sequestration savings in fiscal year (FY) 2014 — $11.3 billion out of $19.4 billion in total sequestration funds — according to a new GAO report. Under current sequestration law, across-the-board cuts to Medicare provider and plan payments are capped at 2%, while other types of federal spending are subject to larger sequestration percentages (9.8% for nonexempt defense mandatory programs and 7.2% for nonexempt, nondefense mandatory programs). Nevertheless, the impact of Medicare sequestration was magnified in FY 2014 because about $2.2 trillion, or approximately 77%, of total estimated government-wide mandatory budget authority was exempt from sequestration. Furthermore, the GAO observes that "projected increases in Medicare spending will likely cause Medicare to comprise a larger share of the sequestration reductions over time." While Congress could modify the sequestration rules at any time, the trend has been for Congress to extend Medicare sequestration (now authorized through FY 2024) rather than provide relief. For additional details, see the full report, "2014 Sequestration: Opportunities Exist to Improve Transparency of Progress Toward Deficit Reduction Goals."
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