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The Implications of the BCA on FDA Funding

May 3, 2013

Under the Budget Control Act (BCA), Congress created a two-tier spending reduction program.  First, it required the immediate across-the-board cuts called the sequester which we are experiencing in the current fiscal year (FY 13). Second, Congress placed overall spending limits each year for 10 years on discretionary spending. If Congress spends more than the budget cap in any particular year, another series of across-the-board cuts will go into place to get the spending level underneath the overall discretionary spending caps. For FY 14, the spending cap for the total amount of funds to pay for discretionary programs is roughly equivalent to the FY 13 level (after sequestration).

If the appropriations committees can keep their spending within the cap, no across-the-board cuts will be required. If not, there will be new across-the-board cuts for FY 14 that might be larger or smaller than in FY 13. The percentage cut will be dictated by the amount of money needed to bring the total spending under the cap.

FDA’s budget authority (BA) base funding is about $2.53 billion. Because of sequestration, it only has about $2.39 billion to actually spend in FY 13. Unless there is an overall budget deal which repeals the BCA, the FDA’s proportional share of discretionary spending in FY 14 is likely about the same amount as its post-sequester total in FY 13.

Congress will have three choices:

  • Cut a major budget deal to allow enough discretionary spending to reach pre-sequester (base) levels and appropriations committees can pick winners and losers;
  • Only pass appropriations bills that in the aggregate do not exceeds the BCA level; or
  • Don’t cut a deal, pass bills that exceed the allowable total and allow across-the-board cuts to bring the total back to the BCA level.

The impact of sequester remains very real.  It has basically reset the agency’s base budget in FY 13, and through the budget spending caps, discretionary programs have limited opportunity to gain additional resources through the next decade. In these tight fiscal times, the mission of the Alliance for a Stronger FDA is even more important than in the past.  Competition for scarce dollars is strong, and we will be fighting to make sure the FDA has the resources it needs to fulfill its critical public health mission.

Note: This analysis and commentary is written by Steven Grossman, the Deputy Executive Director of the Alliance for a Stronger FDA.

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