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Kick the Can? Close the Shop? Or Maybe Make a Deal?

April 4, 2011

ADVOCACY

  • Continuing Resolution. All eyes are on the April 8th deadline, when the current short term FY 11 continuing resolution expires. If a new CR isn’t adopted by then (either for a week or for the rest of the fiscal year), then the federal government would shut down.
  • Congressional Meetings. The Alliance and our members held meetings with Members of Congress last week, including leadership meetings. We have additional meetings scheduled for this week and the week after.

ANALYSIS AND COMMENTARY

We have finally come to the “week of three outcomes” for the FY 11 federal budget and the FDA. With the current Continuing Resolution due to expire at the end of the day on Friday, April 8 … Congress has its back to the wall again.

Depending on whom you believe, it is possible that House and Senate have agreed to split the difference between HR 1’s $60 billion in cuts and the Senate Democratic and White House preference for flat funding. If that is true … and credit given for the $10 billion in cuts already enacted … then it is possible that FDA might emerge with flat funding when the remaining $20 billion in cuts are allocated. However, it will take more than a split of the money to finalize a CR that extends to the end of the year. The House and Senate are allegedly still far apart on whether the remaining cuts will all come from domestic programs or include defense cuts. Similarly, HR 1 contains a number of policy riders that the Senate does not appear willing to accept.

So, here are the possibilities this week:

  • Another CR extension until April 15 (a week later). Everyone on the Hill is tired of the endless CR process. Those most committed to broad deficit reduction know that the real action will be in the FY 12 budget resolution and appropriations, not the current morass on FY 11 spending. But nobody can get there until FY 11 is resolved, which is proving quite difficult. Arguably the most likely outcome for this week is that Congress will again “kick the can down the road,” hoping that agreements can be reached with a little more time.
  • A deal is cut and an FY 11 CR is passed. House Speaker John Boehner, Senate Majority Leader Harry Reid, and OMB Director Jack Lew are the key players as to whether this happens this week. Beyond the usual uncertainties about the course of behind the scenes negotiations, the public posturing has further obscured the realities of the situation. The Senate has said a split of the money has been agreed upon, Boehner says there is no deal on anything until there is an agreement on everything, not acknowledging that there might even be a tentative agreement on money. There was word that the Senate was willing to agree to some policy riders on EPA, but then Reid said: “not possible.” Appropriations staff was told they might have to work this weekend, but I haven’t seen any press reports on whether they did. Beyond the immediate negotiations, the specter of compromise (however balanced) may leave Boehner with insufficient conservative support and Reid without a working majority.
  • The government shuts down at midnight on April 8.  Neither side wants a shut-down. Even more, neither side wants to be the one blamed if the government closes. In an effort to keep some of his heedless freshman in check, Boehner has even started talking about how closing the government costs far more money than it saves. The DC media are writing a lot about the impending shut-down, what happens, who’s affected, etc. This gives the impression that a government closure is more likely, but this may be less about probabilities and more about feeding the information needs of a highly anxious federal workforce.

While these possibilities are playing out, the Alliance continues its advocacy for FDA and the highest possible appropriations levels. There has been a lot of interest in our explanation of why FDA is different from other regulatory agencies. While most such agencies are perceived as barriers to investment and job growth in the US economy, we have pointed to the broad and positive economic impact of FDA. Our white paper on the topic has provided substance to our position and industry participation in the Alliance has provided tremendous credibility. Please keep delivering messages to the Hill about why everyone benefits from a well-funded FDA.

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

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