FDA in a Post-Reconciliation World
“The One Big Beautiful Bill Act” (aka OBBBA) was signed into law on July 4, 2025. The immediate and long-term consequences of this bill are the most important story to write about today. Other topics can wait.
---------------------
Whether for an individual or a nation, how we spend our money is a concrete statement of our values and priorities. OBBBA reflects President Trump’s priorities. At least until January 3, 2027,[1] it also represents America’s values.
Although the impact of OBBBA on FDA is largely (if not entirely) indirect,[2] there are, nonetheless, consequences for the agency.
Medicaid, SNAP, CHIP, and Affordable Care Act Changes. The OBBBA cuts to feeding and health programs--which are spread over several years--represent a significant challenge to FDA as the primary federal agency responsible for the safety of both the food supply and medical products.
Hungry people buy whatever sustenance they can afford from whomever can supply it. Quality, safety, and nutritional value become, at best, secondary considerations.
Unscrupulous manufacturers, distributors, and marketers can be expected to expand their efforts to fill the market demand with cheap foods of questionable quality. As an example, in 2008, there was a massive food safety scandal around Chinese manufacturers substituting melamine in milk to give the appearance of higher protein levels. More than 300,000 children were affected worldwide.[3]
The situation for medical products is similar. Alternative and questionable medical providers using gray market, counterfeit, and unapproved products can be expected to expand their efforts to take advantage of the millions who will be losing coverage. Also, mainstream medical providers and hospitals will, in many cases, face significant reductions in Medicaid revenue. They will be looking to find less expensive medical supplies, some of which may unintentionally come from questionable sources.
Squeeze on Appropriators. As I had predicted in a May 28 column,[4] the last dozen or so House Republican hold-outs for passing OBBBA were all fiscal hawks. In order to garner their votes, they were promised OMB's full cooperation in further cuts in discretionary spending. This will play out in rescissions and through the FY 26 and FY 27 appropriations cycles. In the near-term, it will be harder for appropriators to restore funds where the President has proposed large FY 26 cuts: CDC (minus 50%), NIH (minus 40%), and FDA (minus 8 to 10%).
By the numbers, it looks like FDA is less at risk and probably will be for FY 26. Presumably, appropriators will be loath to 1/ tamper with “maintenance of effort” provisions that mandate certain appropriations levels in order to be able to collect medical products user fees, and 2/ shortchange MAHA and food safety programs given their status as Administration priorities. However, post-reconciliation and over the next few years, the House and Senate Ag/FDA appropriators may have a tight squeeze trying to pay for both agricultural programs and FDA....and there is an ever-present risk of FDA being caught up in across-the-board cuts.
Additionally, it is hard to define specifics, but I have no doubt that FDA programs and responsibilities will be affected if NIH and CDC (especially) are subjected to massive funding decreases.
Lack of Deficit Reduction. As I have written several times,[5] our nation’s debt is a serious problem. From a public health standpoint, we got the worst combination possible: human service programs paying for most of the tax cuts AND the final bill adds yet another $3 trillion (or more[6]) to the national debt.
While speculative on my part, here is a possible scenario where OBBBA’s failure to achieve deficit reduction might impact FDA:
OBBBA and the FY 26 appropriations cycle are not likely to sate demands for large cuts to non-defense programs. At the same time, interest payments on the national debt (determined by the markets, not Congress) will be growing more costly and consume a larger part of the federal budget.
As a result, the President’s FY 27 Budget Request is likely to propose even deeper cuts to domestic and human services programs. Its release in February 2026 will come in the midst of user fee negotiations.
The pressure for cutting government spending will be intense and may--potentially--push FDA to ask for substantially more user fee income, lower maintenance of effort requirements, more flexibility and control over how monies are spent, and a broader range of activities that can be paid for with user fee funds.
It may also force the agency to consider food user fees, even over possible industry objections.
Again, this is speculative on my part.
Conclusion
As a regulatory agency that oversees more than $3 trillion in goods and services and is essential to commerce, FDA has a better chance than most federal agencies to avoid steep budget-driven cuts.
However, OBBBA’s deep cuts in human service programs sets up circumstances where FDA’s consumer protection responsibilities will be more important than ever. It is hard to see how FDA can fully support that role with projected funding and staffing levels.
[1] The date for the swearing in of Members of Congress following the November 2026 mid-term elections.
[2] Apparently, the change in the handling of multi-indication orphan drugs as part of drug price negotiations under the Medicare Modernization Act was part of the final bill. However, that impacts CMS, not FDA.
[3] https://en.wikipedia.org/wiki/2008_Chinese_milk_scandal
[4] https://www.fdamatters.com/fdamatters/non-defense-discretionary-spending-threatened-by-budget-reconciliation-shortfalls
[5] Notably at: https://www.fdamatters.com/fdamatters/non-defense-discretionary-spending-threatened-by-budget-reconciliation-shortfalls
[6] Some estimates run as high as $6 trillion. https://www.washingtonpost.com/opinions/2025/07/03/last-gasp-conservatism-obbb-house-vote/