FDA Matters Blog
Register to get regular updates from FDA Matters FDA Matters Home

Sequestration Has Less Impact on FDA? Just Not True

“The Hill” newspaper recently reported that: “a survey of federal budgets devoted to developing and enforcing regulations found that many agencies will spend more in 2013 and 2014 than in previous years, indicating that the writing and enforcing of new regulations is largely unimpeded by the massive cuts, known as sequestration.”

That certainly sounds authoritative…until you look at the analysis. In fact, the report’s authors appear to know nothing about the federal budget and have used inherently unreliable data in calculating FY 13 and FY 14 spending levels.  One can only hope that the authors—allegedly academic experts–know more about regulatory policy than they do about federal budgets.

When I first saw the “regulatory spending analysis” from George Washington University in DC and Washington University in St. Louis, I expected to write about how FDA’s budget is mostly not regulatory spending. After all, what fractional part of the FDA’s budget is actually devoted to “writing and enforcing regulations?” And the claim that FDA is growing is highly suspect, as addressed below.

Equally troubling to the “innovation economy” is that funding for the Patent and Trademark Office is counted as regulatory, placing PTO on par with the Securities and Exchange Commission (see page 6 of the report).  It is not a subtle nuance to say they are fundamentally different.

FDA and PTO are the “federal regulatory agencies” projected to have the largest growth and are the linchpins of the GW/Washington University study. If most of their budgets are not regulatory spending, then it is impossible to draw conclusions about how regulatory agencies are faring under sequester.  

But I can’t leave it there because the analysis is riddled with serious methodological issues.

The first of many errors is the use of the proposed spending levels in the FY 14 President’s Budget Request as the measure of what agencies will have to spend in fiscal year 2014. One example of the variation this creates: FDA’s “regulatory growth” is calculated by including the President’s request for more than $200 million in food user fees, a proposal that has drawn no Congressional interest.

More broadly, no one really knows what the actual FY 14 spending levels will be. They are dependent on the resolution of the difference between the House and Senate budget bills (about $90 billion in FY 14 discretionary spending), the actual spending levels adopted by Congress in appropriations bills, the vagaries of funding under (likely) continuing resolutions, and the very real threat of yet another sequester in FY 14. Most federal agency heads would be exceedingly grateful to wind up with as much money as the President requested for them.

The study’s assertions about the FY 13 spending levels are equally unfounded. The GW/Washington University report uses estimated “outlay” numbers contained in the appendix to the President’s FY 14 budget. Since these tables were compiled before the passage of the FY 13 Ag/FDA appropriations or the final FY 13 continuing resolution, the GW study is using estimates based on the President’s FY 13 request (as ungrounded in reality as the FY 14 request), perhaps modified by part-year CR’s passed in late 2012.

In short, the actual FY 13 spending levels were not used in the analysis (indeed, weren’t even determined at the time of the President’s FY 14 budget request). So, the already-unreliable numbers in the report are unadjusted for the subsequent rescission and sequester. How can the authors conclude that “agency spending levels for regulation have increased modestly despite sequester,” without having reliable numbers that reflect the sequester?

Mark Twain once observed: “There is something fascinating about science. One gets such wholesale returns of conjecture out of such a trifling investment of fact.” Thinking of the GW/Washington University study, I can only say “amen.

Leave a Reply

You must be logged in to post a comment.

© 2009-2012 by HPS Group. All rights reserved. Permission is hereby granted to those wishing to quote or reprint from this site, providing it is properly attributed to FDA Matters: The Grossman FDA Report™.