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FDA Funding Prospects Altered by the Budget Control Act

The just-passed Budget Control Act of 2011 (BCA) will have a heavy impact on FDA’s future.  Under this new law, most discretionary spending programs will shrink—not merely cease to grow.  Yet, FDA’s growing responsibilities and resource needs are not diminished because federal spending is being reduced. Our nation is less safe and less healthy if FDA cannot excel at its mission

FDA Matters urges Congress and the President to see that increased funding of FDA is the only option.  Ultimately, the pressures created by the BCA will test the government’s commitment to FDA’s essential role in our society.  

Appropriations Caps and the Impact on FY 12.  The BCA limits discretionary federal spending for every fiscal year from 2012 through 2021. By capping annual appropriations growth, federal spending will be reduced by more than $900 million over 10 years.

For FY 12, the House and Senate appropriations committees cannot spend more than $1.043 trillion. Within this total, the ceiling for non-security programs (e.g. FDA, NIH, education, etc.) is slightly below the FY 11 appropriations level.

The ceiling is also substantially above the level the House has been using to mark up FY 12 bills. This is particularly encouraging because the House-passed Ag/FDA appropriations bill would cut FDA by $285 million below FY 11 (-11.5%) and $572 million below the President’s FY 12 budget request (-21%).

Senate staffs are currently preparing FY 12 appropriations bills using the aggregate spending levels in the BCA. Subcommittee and then full committee mark-ups are expected to start in early to mid-September.  Advocates, notably the Alliance for a Stronger FDA and its members, have been encouraging the Senate to put more money into FDA. The goal is to provide the agency with an increase in its FY 12 appropriation, not merely undo the cuts proposed in the House bill.

FY 13 Appropriations and Beyond.  A second part of the BCA requires a further reduction of the federal deficit by $1.2 trillion over the next 10 years. This can be achieved by any combination of changes in entitlements, revenues and appropriations.  

To pull together this deficit reduction plan, a so-called “super committee” has been appointed. It is composed of 12 members—3 each from the majority and minority parties in the House and the Senate. The group’s work must be completed by November 23, 2011. Any resulting bill will not be amendable and must pass Congress by December 23, 2011. If no legislation passes or the President fails to sign it, then across-the-board cuts (“a sequester”) will occur during  fiscal year 2013, which starts on October 1, 2012.

The general consensus in Washington is that the super committee appointees are too divided ideologically to pull together the needed deficit package. Democrats will only accept entitlement changes if there are new tax revenues. Republicans are pledged to oppose any tax increase.

Predictions of failure may be premature because the super committee will be under intense public and political pressure to find a compromise. In addition, sequester cuts would fall heavily on defense programs that most of Congress supports.

FDA is vulnerable in the “super committee/sequestration” process in two ways.

  • If the super committee produces a plan, it may include further cuts in discretionary spending. There is no guarantee that Congress would allocate those cuts in a way that would protect FDA and other essential programs.
  • If the super committee does not produce a plan, then the sequester would go into effect in FY 13.  If the entire 10-year $1.2 trillion in savings must be found through sequestration, then FDA is likely to sustain an across-the-board reduction in FY 13 of at least 8% to 10%.

Conclusion. Over the last five years, FDA has been one of few discretionary programs to receive substantial funding increases. This reflected both Congressional and Executive Branch recognition that the agency was dramatically underfunded for its growing responsibilities in an increasingly complex world. FDA still needs more resources, even though the downward budgetary pressures have become significantly greater.


Imports: FDA Issues a Cry for Help          June 26th, 2011

No challenge to FDA’s mission looms larger than the rapid globalization of the world markets for food, drugs, medical devices and other FDA-regulated products. By way of making this point, on June 20, the FDA released a special report, entitled “Pathway to Global Product Safety and Quality.” FDA Matters read the report carefully and heard a cry for help, if not an actual primal scream. Read the rest of this entry



FDA “Exceptionalism” at the Funding Crossroads       May 2nd, 2011

Congress returns at the beginning of May to start the FY 12 appropriations process. Downward pressure on federal spending will intensify. If, despite this, the FDA receives another increase, then it will move closer to establishing itself as an exception to the budget cutting process. Thus, FDA Matters sees the coming funding battle as a crossroads for FDA.  Read the rest of this entry

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