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And We DO Have a Deal, So …

December 13, 2013

As you know, Representative Paul Ryan (R, WI) and Senator Patty Murray (D, WA) have arrived at a budget agreement that was approved by the House last night and will probably be considered by the Senate next week. The deal does not address the larger deficit picture or change the difficult funding environment that faces all federal agencies for at least the next several years.

Nonetheless, we believe the Ryan-Murray budget deal is a positive step forward because:

  • It funds non-defense spending above the BCA ceiling, and creates an opportunity for FDA to be better funded.
  • It puts the appropriations committees back in charge of determining national priorities and funding levels, a process in which the FDA typically fares well.

Representative Ryan and Senator Murray agreed to split the difference between the House FY 14 budget resolution of $967 billion and the Senate FY 14 budget resolution of $1,056 billion. The new ceiling of $1,012 billion for FY 14 and $1,014 billion for FY 15 will not require a sequester of discretionary spending in those years.  The additional discretionary spending (about net $45 billion in FY 14) will be paid for by increasing various fees and extending the sequester of certain mandatory programs for two additional years. Exactly half of the increase — $22.5 billion — has been added to the aggregate amount of non-defense spending for FY 14.

FY 14 by sector Budget Control Act ceiling for FY 14 FY 14 Short-term CR (FY 13 post-sequester) House Senate Ryan-Murray Budget Deal — subject to House and Senate passage
Defense $498 billion $517 billion $546 billion $   552 billion $   520 billion
Non-Defense $469 billion $469 billion $421 billion $   504 billion $   492 billion
Total $967 billion $986 billion $967 billion $1,056 billion $1,012 billion

 

By comparison to the numbers in the chart, FY 12 spending was approximately $1,043 billion, so overall discretionary spending, as well as non-defense spending, has decreased over the last 2 years. Even still, non-defense spending gained the most from the budget deal because the split was based on the BCA ceilings for FY 14 and overrode the House’s intention to take $48 billion from the non-defense cap and use it to increase defense spending.

FY 14/FY 15 Sequester. FDA’s BA appropriation and user fees were subject to the sequester of discretionary spending in FY 13.  The Ryan/Murray budget deal eliminates the threat of sequester to user fees and appropriations for this fiscal year and next fiscal year providing that the appropriations committees stay within the agreed upon spending ceilings. However, the potential for sequestration in FY 16 and thereafter is likely to result in continued efforts to eliminate FDA user fees from the funds that can be sequestered.

With regard to FDA Appropriations.  FDA funding for this year (FY 14) will be determined by the House and Senate appropriations committees between now and January 15. While House and Senate split the difference in increases to the total spending for FY 14 permitted under the BCA, this does not necessarily mean that House and Senate will split the differences on the level of funding for specific programs (i.e., macro budget influences but does not dictate micro funding decisions). The budget deal empowers the appropriations committee to determine priorities and funding levels as long as they don’t exceed the caps in the new deal.

We will need to work to make FDA’s case to the appropriations committees in order for the agency to receive a higher level of funding. The budget environment remains difficult.

Below is the proposed FY 14 levels under the previously adopted House and Senate agriculture appropriations bills. The committees may start their negotiations from these numbers but that is not certain.

Function

Note: budget authority only, no user fees

FY 12 Final

FY 13 Actual
Post-rescission,
post-sequester
FY 13 Enacted
Post-rescission,
pre-sequester
Proposed FY 14 Levels under House/Senate bills
compared to
FY 13 enacted level)
All BA approps
Total (no user fees)

$2.506 billion

$2.386 billion $2.461 billion H: $2.485 billion
(+ $24 million)
S: $2.563 billion
(+ $102 million)

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