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Many Unknowns and Just a Few Certainties

December 7, 2012

I probably spend 30 to 60 minutes every day trying to catch up with the ever-evolving negotiations on the fiscal cliff/deficit reduction/tax reform/debt ceiling debate. It changes daily, if not hourly. There are new proposals every day and it seems like just about everybody has a point of view on whether there is any progress on negotiations.

Yet, it seems fairly clear that only two people really count: President Obama and House Speaker Boehner. Further, IF the two can reach an agreement, there is only one political question: can each deliver their own respective parties — with many Republicans prepared to denounce a Boehner-negotiated compromise on taxes and many Democrats prepared to denounce an Obama-negotiated compromise on entitlements and mandatory spending.

For FDA’s small but essential stake in these negotiations, there seem to be two somewhat contradictory trends. On the one hand, each day brings some new player declaring that they are prepared to “go over the fiscal cliff” if some specific item isn’t satisfactorily addressed in the negotiations. Treasury Secretary Timothy F. Geithner said Wednesday that without higher tax rates on the wealthy as part of a deal, President Obama is prepared to let that happen instead through the expiration of the Bush-era tax cuts. Such talk makes sequestration more likely to occur on January 2, 2013.

On the other hand, as noted in last week’s column, there is markedly increased awareness that discretionary spending (defense and non-defense) are neither the primary cause nor an effective way to cut the deficit. Discretionary programs have already contributed $1 trillion toward deficit reduction as part of budget spending caps in effect through 2022. The sequester would double that amount, without making much headway against the fiscal crisis. A good sign is that Speaker Boehner reportedly included only $300 billion more in discretionary spending cuts (over the next decade) in the latest proposal he suggested to the White House. Presumably, this would be in lieu of the sequester and might even be targeted to specific programs rather than an across the board cut.

Looking ahead, it is hard to plan for FY 14 when we are still in the fiscal cliff crisis and confront uncertainties over the current FDA funding. Yet, no matter what, the President will announce the general outlines of his FY 14 budget in his State of the Union in late January and release specific details in early February. As fluid as our current situation is, FY 14 will have its own serious challenges. Our own request for FY 14 will depend on whether there is an FY 13 omnibus and what’s in it; what is in the President’s FY 14 budget request; and the shape and leadership of the Appropriations Committees in the new Congress. Among other things, we know for sure: there will be a number of new appropriations committee members in both houses; and we will be getting a new Ag/FDA appropriations subcommittee chairman in the Senate (because of Senator Kohl’s retirement).

Making sure that FDA has the resources it needs — despite all the disputes and uncertainties — is why the Alliance exists. We can’t do it without you.

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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