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Relative — as Opposed to Absolute — Levels of FDA Funding

August 20, 2012

This is week two of Congress’s five-week recess — momentarily putting aside action on funding items.  However, there is still much to talk about that affects FDA’s future resource prospects.

The lead political story this week was Mitt Romney’s decision to make Representative Paul Ryan of Wisconsin his running mate. This has prompted more questions about the impact of victory (by either team) on the federal government and which team would be better for FDA.  When asked, I am quick to point out that that the Alliance has no position. We are advocates for increased appropriated funding for FDA and do not engage in any partisan political activities.

This is not to say there aren’t likely to be differences between the two Presidential candidates that may affect FDA.  As I have written elsewhere, the two campaigns appear to view the role of regulatory agencies differently — but even this is very preliminary, based on views expressed in very general terms. It remains to be seen whether either campaign will mention FDA, no less focus on a vision for its future as a public health regulatory agency.

Also, it seems safe to say there will be differences in approaches to reducing the annual and overall federal spending deficits. President Obama and Representative Ryan have already clashed on the appropriate mix of spending reductions, entitlement changes, and taxes that will be needed.  Again, this reflects general differences between the Presidential campaigns — it may or may not affect FDA.

However, I did want to focus on a third area — the amount of discretionary federal spending. Here the parties are in fairly close alignment and the general impact on FDA funding fairly clear. Regardless of who wins the White House in November, the amount of discretionary federal funding is not going to increase. This means that agencies, such as FDA, with growing missions and responsibilities, are going to have an ever tougher time getting their jobs done. If they receive additional funds at all, it will be at the explicit expense of other programs that have their own constituencies.

In what looks like a Presidential election of contrasts (further exaggerated by campaign rhetoric), why is this one (critical) area so certain, regardless? First, discretionary spending is already capped for the next 10 years under the Budget Control Act of 2011 (BCA). Under this law, non-defense spending has a separate ceiling in FY 13 — producing a situation where FDA is likely receive about the same amount in FY 13 as it did in FY 12.

Starting in FY 14, all discretionary spending — defense and non-defense — will have a single cap. This will greatly increase the pressure on non-defense spending (and hence, FDA), as the defense lobby is well-organized, represents hundreds of thousands of jobs, and has the constitutional rationale that providing for the national defense is one of the fundamental responsibilities of national government.

Also, it is important to remember that the BCA spending caps are independent of the sequester. The BCA caps produce one pool of “deficit reduction/savings,” while sequester is designed to produce a completely separate pool. So even if Congress were to find a way to avoid the sequester (requiring a combination of spending cuts, entitlement reforms and taxes), the BCA ceilings will still cap discretionary federal spending.

I admit that all of these macro-budgetary pressures represent a discouraging prospect for FDA advocates. Regardless of who wins the election, we will face tremendous headwinds in assuring FDA has sufficient funds to approve products, assure safety, advance technology, stay ahead of globalization, etc.

Our job is to be sure that FDA gets the most appropriated resources it can. When most agencies were getting no increases, we gained tremendous growth for the agency. While our first measure is an absolute one (by how many dollars did FDA grow), we also must be open to seeing our mission in relative terms. That is, was the importance of FDA’s mission rewarded by funding that — whether an increase, level, or a decrease — recognized that FDA’s activities are of paramount importance to the American people.

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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Erratum (posted as of August 24, 2012):

The Analysis and Commentary above states that the defense and non-defense budget functions would share a common spending ceiling starting in FY 14.  This is not the case. Because the supercommittee failed to eliminate the sequester, there is a firewall  between defense and non-defense spendng, each having their own caps through 2021. Had the supercommittee succeeded, security and non-security would have been under one overall cap starting next year as described in the article. One person who pointed out the need for a correction also added: “Of course this is not to say the defense lobby won’t try and undo the firewall — that is a real fear — but for now at least non-defense discretionary spending will still have its own cap.”

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