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The Senate Makes Its Opening Serve

October 14, 2011

Game on! And it will be a very busy October and November.

Appropriations: With an announcement that underscored the procedural complexity of the situation, Senate Majority Lead Reid announced that the Senate will take up the FY 12 House Agriculture-FDA appropriations bill at the beginning of next week, then: substitute the Senate version of the bill and graft on two other appropriations bills to create a “minibus.” Leadership has chosen the three bills carefully, judging Agriculture-FDA, Commerce-Justice-Science, and Transportation-HUD to be the most likely to pass the Senate in a package. If this approach is successful, then the Senate will take up other combination bills in November.

Action on this first minibus is expected to be completed next week. There are mixed signals as to whether the goal is to conference the bill with the House or to strengthen the Senate position for later negotiations. If it is the latter, then there will probably be an omnibus bill in November that includes most of the 12 appropriations bills.

At this point, it is anyone’s guess how floor action will proceed. We would anticipate that any amendments adding monies would be required to also contain an offset to pay for it. That will make it difficult — Senators would not only have to agree on more money for a particular priority, but also agree on which programs will get less. This suggests, but doesn’t assure, that the Senate will pass a bill at the end of the week that will look very much like the one first offered up at the beginning of  the week.

However, there will probably be a lot of amendments. As noted, shifting dollars will be hard, but there may be some bipartisan agreements.  Other amendments proposing additions and offsets  will be intended to make ideological points and will mostly fail.  A third type of amendment is also expected: policy riders that prevent agencies from acting on certain policies with monies contained in the appropriations bill. The one FDA amendment that we know of fits into this category: prohibiting the agency from using appropriated monies to approve a pending application to permit marketing of genetically engineered (GE) salmon. These types of amendments, if adopted, cease to have effect after the fiscal year ends.

Deficit Reduction/Supercommittee: This bipartisan, bicameral group has until November 23 to propose at least $1.2 trillion in 10-year savings. These reductions are intended to start in FY 13, not the current FY 12. However, nothing prevents the committee from specifying immediate changes that would reduce discretionary or entitlement costs in FY 12.

Recommendations are coming into the supercommittee from various House and Senate committee and Members … and proposals usually have at least a $3 to $5 billion impact on the deficit (unless they are ideological in nature). Of most interest are the suggestions for how to gain tens of billions or even hundreds of billions in savings. So, in theory, FDA is too small to be on the screen of the supercommittee. Not only does the agency need to continue to grow over the next decade to fulfill its mission and responsibilities, but cutting the agency does not create meaningful savings in the context of the required $1.2 trillion in cuts.

What we, as advocates, must worry about are the indirect impacts on FDA from the supercommittee’s work. For example, cuts in salary and benefit structures for federal employees would make FDA’s recruitment and retention efforts much harder.  Across the board cuts in domestic discretionary programs or hiring freezes  might be in the final package and could be devastating.

Arguably, FDA has even more to fear if the supercommittee fails to reach consensus on the needed level of deficit reduction. Should this occur, the Budget Control Act calls for an across-the-board sequestration of funds starting with FY 13. The size of the cuts depends on whether all $1.2 trillion must be found through sequestration or some lesser amount (if, for example, the supercommittee were to recommend $500 billion in deficit reduction). Representative Norm Dicks, the senior Democrat on the House appropriations committee has suggested here  that domestic discretionary programs would need to be cut back by 7.8% in FY 13 under sequestration. On page 7 of the document, he specifically refers to the impact on FDA of what could be nearly $200 million in cuts below the FY 11 levels.

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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