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Congress Changes Direction on Debt Ceiling

January 25, 2013

In a change of direction, House Republicans decided that they did not want to deal with the debt ceiling prior to dealing with spending issues. For their own different reasons, Senate Democrats have quickly agreed to this.

As a result, the new deadline on Congressional action to raise the debt ceiling is now May 19. As advocates for FDA, we still face the same challenging gauntlet of Congressional deadlines. However, they have been spaced out so we can concentrate on each one individually:

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The revised schedule gives FDA (and other discretionary spending programs) their best chance at avoiding the across-the-board sequestration cuts now scheduled for March 1. As long as the debt ceiling needed to be resolved during the same timeframe, sequestration was almost certain to occur. This was just a matter of bandwidth: Congress does not have enough to simultaneously deal with the debt ceiling and finding alternatives to sequestration.  With the new schedule, the decks are now cleared for the next six weeks for Congress to focus on some combination of spending cuts and revenue raisers that can replace sequestration.

Should this effort fail and sequester occurs, FDA will have to absorb a 5.1% cut in its FY 13 (current year) budget. Note that the 5.1% comes from Senator Mikulski, the new chair of Appropriations,  and from the Center for Budget Policy and Priorities. There is no official word from OMB.

At 5.1%, FDA’s funding would be cut by about $205 million in FY 13. This would require a deep and far-reaching retreat in a number of vital FDA areas that protect the public health and clear the pathway for innovative medical products.  The programmatic impact would be greater than 5% because:

  • FDA is driven by personnel costs and sequestration would mean furloughs, unfilled job vacancies and possibly some lay-offs;
  • The sequestration is based on the agency’s full-year budget, but the cost savings would have to be found and implemented within the seven months remaining in FY 13; and
  • Fixed items (rent, utilities, etc.) will still cost the agency the same amount, meaning that the Centers and the Office of the Commissioner will have to be tapped for the additional funds to pay these bills.

FDA and the Alliance need your support now, more than ever, to convince Congress that FDA’s responsibilities are growing and that cuts cannot be permitted. Even flat funding (no less cuts) make it impossible for the agency to provide the services required by Congress and expected by the American people.

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