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The Super Committee and Its Mission

August 13, 2011

In last week’s Friday Update, we examined the impact of the Budget Control Act (aka the debt limit/deficit reduction deal) on FY 12 appropriations:

  • The ceiling for FY 12 appropriations for non-security programs (e.g., FDA, NIH, education, etc.) is a little below the FY 11 level and substantially above the level that the House has been using.
  • This is particularly encouraging for FDA, since the House-passed Ag/FDA appropriations bill would cut FDA $285 million below FY 11 (–11.5%) and $572 million below the President’s FY 12 budget request (–21%).
  • Senate staff are preparing their FY 12 Ag/FDA appropriations bill using the higher aggregate numbers in the new law.
  • Sometime after Labor Day, the Senate Appropriations committee is expected to start marking up FY 12 bills. We are hard at work trying to get FDA an increase in its appropriation.

There is a second part of the Budget Control Act to further reduce the deficit by $1.2 trillion over the next 10 years. This can be achieved by any combination of changes in entitlements, revenue adjustments and further cuts in appropriations. If legislation is not adopted by December 23, 2011 and then signed into law by the President, then across-the-board cuts (“a sequester”) will occur in fiscal year 2013. The amount of the sequester will be determined by whether Congress passes some deficit reduction or none at all — $1.2 trillion over 10 years being the goal either way.

To pull together the deficit reduction legislation, a so-called “super committee” is being formed — composed of 12 members — three each from the majority and minority parties in each House. The group will be required to meet and propose legislation by November 23, 2011. The resulting bill will not be amendable and must be passed by both houses of Congress no later than a month afterward. The names of the “super committee” members have been released this week. The group is very seasoned, has close ties with leadership, and strong involvement of the committees most likely to be affected (House Budget, Ways and Means and Energy and Commerce and Senate Budget, Finance and Veterans).

The general consensus in Washington is that the group is too divided ideologically to pull together the needed deficit package that would include changes in entitlements (Democrats will object), taxes (Republicans will object) and appropriations (already hard hit). This judgment may be premature. Given the public spotlight on the group, anemic economic growth, and the shaky stock market, the group will be under intense pressure to find a compromise. May happen, may not. If they fail, the impact of the sequestration will be substantial and is to be divided equally between defense and non-defense programs. (Note: This is a different standard than the one applied to FY 12 appropriations, which is security and non-security programs.)

Potential impact on FDA of the “super committee/sequestration” process. The Alliance’s long-standing position has been to oppose across-the-board cuts in federal programs, which is what is most likely to occur under a sequester. If cuts need to be made, funding should go first to essential programs that reflect the highest government priorities. In that environment, we feel we can make the case that FDA provides essential services and needs to grow, even if other federal programs shrink. If the entire $1.2 trillion in savings must be found in a sequester then, at a minimum, FDA is likely to sustain an 8 to 10% cut if there are across-the-board reductions.

FDA is also vulnerable during the super committee process, but in an indirect way. While the committee will need to look at taxes and entitlements, some further reduction in appropriations is likely to be on the table. We will need to make sure the committee understands that, in this eventuality—they should set priorities rather than take additional savings by across-the-board cuts. We expect to convey that message to the 12 super committee members, who are:

  • From the House of Representatives
    • Rep. Xavier Becerra (D, CA)
    • Rep. Dave Camp (R, MI)
    • Rep. James Clyburn (D, SC)
    • Rep. Jeb Hensarling (R, TX)
    • Rep. Chris Van Hollen (D, MD)
    • Rep. Fred Upton (R, MI)
  • From the Senate
    • Sen Max Baucus ( D, MT)
    • Sen. John Kerry (D, MA)
    • Sen. Jon Kyl (R, AZ)
    • Sen. Patty Murray (D, WA)
    • Sen. Rob Portman (R, OH)
    • Sen. Patrick Toomey (R, PA)

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