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Between Veterans Day and Thanksgiving …

November 11, 2011

It is an unexpectedly quiet day here in the nation’s capital. Appropriately and respectfully, our government is closed to honor our nation’s veterans.

House and Senate conferees on the FY 12 minibus appropriations bill (which includes Agriculture programs and FDA) met a week ago Thursday (November 3). The conference was short, clearly a formality. However, it was the trigger for staff to work the entire week to resolve all of the differences between the House and Senate positions. At this stage it is likely that most staff-level work is complete, and principals will have to meet to resolve the final agreement. To our knowledge, no stakeholders know the current numbers being considered by appropriations committee Members and staff and leadership.

The House and Senate return on Monday, November 14, at 2 p.m., but typically little committee business is conducted on Mondays. More likely, conferees will act on Tuesday or Wednesday and we will see the final numbers then. The current Continuing Resolution ends on November 18 and an extension is expected to be included in the minibus. Procedural steps needed to tee up a final House-Senate vote on the minibus by Friday means that we should know by Wednesday at the latest.

Both Houses are expected to adjourn next Friday for the Thanksgiving week.

There still may be plenty of remaining drama as the Super Committee has until November 23 (the day before Thanksgiving) to release its recommendations/legislation for reducing the deficit. There is not a lot of optimism, since both sides seem very far apart. However, there are still efforts underway to negotiate a package of cuts equaling at least $1.2 trillion over the next 10 years. Otherwise, the law calls for this sum to be made up by automatic sequestration of funds starting in FY 13 (essentially across-the-board cuts).

There are two major forces that will probably keep the Super Committee trying to find common ground right until the end. One is the size of cuts that would need to be made to the Defense Department budget under sequestration. The second is the US (and worldwide) stock and bond markets’ terrible, quite negative reaction to the fiscal crisis in Europe. Super Committee members have to be concerned that markets will react even more strongly if Congress can’t agree on a small downpayment ($1.2 trillion over 10 years) toward improving the US debt situation.

A final note: Strictly from the perspective of FDA funding, the agency is likely to be much better off with whatever the Super Committee proposes. If sequestration becomes a reality for FY 13, the agency would likely face an across-the-board cut in the range of 5 to 10%.

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

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