Debt deal impact: New York City could lose billions in federal aidBY Kenneth Lovett, Joseph Straw and Lore Croghan
August 2, 2011
From health care to security and transportation, the debt ceiling deal threatens long-term pain for New York City, which stands to lose billions in federal aid.
Medicare will be on the chopping block when a congressional supercommittee decides how to cut $1.5 trillion, and the fate of the city's fragile health care system hangs in the balance. If Congress doesn't approve the committee's plans, an automatic 2%, $119 billion nationwide Medicare cut will kick in.
Kenneth Raske, president of the Greater New York Hospital Association, is already urging his 250 member hospitals to lobby Washington against any cuts.
The city has seen a series of painful hospital shutterings - including St. Vincent's in the Village and North General in Harlem. And just last week, officials announced the likely closing of Peninsula Hospital in Far Rockaway, Queens.
Payouts to 9/11 heroes from the Zadroga law could also take a hit, said Rep. Jerrold Nadler (D-Manhattan, Brooklyn).
New York's federal homeland security funding eroded before thedebt crisis, and Rep. Pete King (R-L.I.) said he has already expressed his concern to his colleagues about further cuts.
"They assured me they would work with me," said King, the chairman of the House Homeland Security Committee.
The Metropolitan Transportation Authority was counting on $4.2 billion in federal funds from 2012 through 2014 for its capital program, which covers construction projects like the Second Ave. subway and the purchase of trains and buses.
Federal dollars for the city and state university system and for Pell Grants could be threatened, said James Parrott, an economist at the Fiscal Policy Institute - who expects the debt ceiling deal to push unemployment in the city higher than it would have been.
The state is projecting a $2.5 billion deficit in next year's budget - which potential cuts in federal funds will make harder to fill.
Reduced federal funds for research-and-development programs would make it more difficult for the state to develop or attract high-tech and "green-collar" environmental jobs, said Rep. Paul Tonko, a Democrat from upstate Montgomery County who voted against the debt deal.
"All of this means more layoffs as we're trying to grow jobs; we're now taking the economy backward," Tonko said.