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Three Choices for FDA Budget for FY 14 … Maybe

August 9, 2013

Assuming we don’t publish the Friday before Labor Day, there will be three Friday Updates before Congress returns. Each is an opportunity to explore the question: what is going to happen to FDA appropriations for FY 14? While nobody knows the answer, here are some of the key issues that Congress must resolve.

How much money is available for federal discretionary (non-mandatory) spending? The House budget resolution tracks the Budget Control Act (BCA) and places the ceiling at $967 billion. The Senate budget resolution is set at $1,058 billion, a difference of $90 billion. Congress has three choices for FY 14:

  • Cut a major budget deal to allow more 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.

Which pathway is Congress most likely to choose? The smart money is on “none of the above,” at least before October 1. This means the government is almost certainly going to be funded on a short-term Continuing Resolution at the beginning of the fiscal year. That will start to create pressure on Congress to come to a resolution and the pressure will intensify when the debt limit ceiling gets closer in mid-Fall.

What would a short-term Continuing Resolution look like and how will FDA fare? The fate of FDA can be defined, but not specified. For example, a CR could be set at either the FY 13 pre-sequestration or post-sequestration levels. The gap between the two (including user fees if there is no provision to the contrary in the CR) is $209 million or slightly more than $17 million per month. Even if FDA were to have the higher level to spend, it would most likely do what it did a year ago: hold back on hiring and contracts to blunt the impact of potential cuts later in the fiscal year, which might come from either appropriations cuts or a new sequester.

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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