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More From Steven Grossman’s Mailbox

May 10, 2013

Once again, my mailbox has filled up with interesting questions.

Q: There are reports that with tax revenues up and federal spending down, the debt ceiling might not be breached until the Fall. How will that effect FY 14 appropriations?

A: Currently, the House and Senate Budget Resolutions are about $90 billion apart for discretionary spending (about 9%). Not only dollars separate the two bodies, but also deficit reduction strategies and political philosophies.

Currently, the Senate is pressing for a conference to try to resolve the differences, while the House has not wanted to engage, considering the exercise futile. It was widely believed the House would come to the table in the summer, believing that the need to raise the debt ceiling would provide them with leverage.

If the debt ceiling doesn’t need to be raised until the Fall, that makes a budget deal even less likely before the new fiscal year begins on October 1. As a result, the House will likely allocate and mark-up appropriations bills that fit within its own lower ceiling and the Senate will do likewise with its higher level.

While a couple of appropriations bills may become law because both houses will agree on a bottom line for them (e.g., military construction), the bulk of bills will be too far apart, mirroring the gap between the budget bills. While any number of additional factors could come into play, that suggests that FY 14 is almost certain to start with most of the government being funded under a continuing resolution.

Q: Thank you for the explanation (last week’s Advocacy at a Glance) of how and when sequestration becomes a factor in FY 14 appropriations. What would happen if there was a continuing resolution at the beginning of the fiscal year instead?

A: As noted above, CR funding on October 1 is an increasing likelihood. The fate of FDA can be defined, but not specified. For example, a CR could be set at either the FY 13 pre-sequestration or post-sequestration levels. The gap between the two (including user fees if there is no provision to the contrary in the CR) is $209 million or slightly more than $17 million per month.

Even if FDA were to have the higher level to spend, it would most likely do what it did during the initial FY 13 CR: hold back on hiring and contracts to blunt the impact of potential cuts later in the fiscal year, which might come from either appropriations cuts or a new sequester. This would not be an issue if the CR were set at the lower FY 13 post-sequester level, because that approximates (on a proportional basis) the likely FDA funding level if the House budget levels prevail.

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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