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Predident’s Budget Request for FY 13 Due on February 6

January 23, 2012

The previous Analysis and Commentary column outlined the schedule for appropriations action in 2012, starting with the President’s State-of-the-Union (SOTU) address next week. We now know the President’s Budget Request for FY 13 should be released by OMB on Monday, February 6. If this year’s schedule follows prior ones:

  • The details of the entire budget request will be posted online by mid-morning,
  • HHS Secretary Sebelius will do a public briefing in the early afternoon, and
  • FDA Commissioner Hamburg will do a similar briefing in the mid-afternoon.

The goal for the FY 13 appropriations process is to hold hearings, mark-ups and floor action, finishing the FY 13 bills by the end of fiscal year 2012 (September 30, 2012). As happened this past Fall for FY12 , it is also possible that some appropriations bills will be viewed as “easier” and passed in a timely fashion, while others may be viewed as “harder” and dealt with later.

If the appropriations process is not complete by the end of the current fiscal year, a continuing resolution would cover FY 13 funding for whichever government agencies have not been included in final appropriations bills. Whatever remains to be done, would likely be addressed in a “post-election” session of Congress.

What I’ve described above is what might be considered the standard scenario for an election year appropriations process. However, there are some important wrinkles this year that will impact what actually occurs.

First, the SOTU will be President Obama’s opening salvo of his re-election campaign. So it will cover the current state of the union, his goals and program for 2012, and the major themes of his re-election (although they will not be identified as such). We expect a heavy emphasis on jobs, the economy, and deficit reduction.

Government efficiency will be high on his list as a way to soften the impact of budget cuts. Among other things, he is expected to propose to re-organize parts of the government — with Congress getting only an up/down vote on each specific proposal. The “poster child” for this will be consolidation of a cluster of agencies and programs that promote US trade.

There have been rumors that he will also ask for a food safety consolidation, proposing to move the Department of Agriculture’s Food Safety and Inspections Service (primarily responsible for meat products) into FDA. So far, this is just a rumor and probably would never become law even if true … but re-organization and consolidation of functions is often a significant distraction in the appropriations process.

Second, on-time completion of appropriations bills has become a rarity and is even less likely to occur in an election year. This means that FDA might be funded on a continuing resolution for at least the first few months of the new fiscal year. Recent continuing resolutions have tended to be funded at the prior year’s level and occasionally at 2% or 3% below the prior year’s level.

However, there is nothing fixed about that formula. At one time, it was common for the CR to be set at “the lower of the House and Senate proposed appropriations numbers.” Had this been the case for FY 12, it would have been very difficult for FDA — the House called for an overall cut of 11% and that would have been the spending level until the conference committee finally agreed on the Senate level (a 2% increase).

Third, there is some uncertainty as to whether the President’s budget request numbers will include the sequestration (across-the-board) cuts that are scheduled to occur on January 2, 2013. The distinction is between the President providing one “request” number that includes the cuts … or providing two numbers — the President’s actual request and the net impact after sequestration. I think the latter (two numbers) is what will occur or, possibly, there will be just request numbers with general discussion of sequestration.

If there are two numbers, it is hard to tell whether the media plays up the request number or the “with sequestration” number. In any case, while sequestration represents “current law,” it is still possible for Congress to pass a package that reduces the federal deficit by all or some of the required $1.2 trillion over the next 10 years. This would offset the impact of sequestration, in whole or part.

In any of these scenarios, the risk for FDA (as for all federal agencies) is the possibility of being hit twice. Thus, for example, if FDA was flat-funded in the appropriations process (at the FY 12 level), sequestration could leave it with between 6% and 10% ($150 and $250 million) less to spend in FY 13.

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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