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The President’s Budget for FY 15: Disappointing … But Not DOA

March 7, 2014

Every year, the President’s budget request is released and there are news stories about how FDA is due for a substantial increase. One year it was touted as 22%, when the real number was closer to 7%. After annual repetitions, I thought I was over being annoyed. Apparently, not. Once again, OMB funny math has gotten under my skin.

This year, the President’s request claims that FDA would receive $4.7 billion, about an 8% increase. Sounds like a lot in the current budget environment … but when you break it apart it isn’t real and it isn’t anything to be happy about.

The amounts that are grounded on the prior year (FY 14) funding are: budget authority appropriations ($2.584 billion) and existing user fees ($1.901 billion). Thus, the President’s “ask” is really $4.485 billion, plus $260 million in proposed user fees that face an unknown fate.

The increases associated with the request appear to be: + $23 million for BA appropriations and + $77 million for existing user fee and certification programs, for a total of a $100 million increase. This is just a tad less than a 2.3% increase over the prior year’s total. Even that overstates the benefits of the request, since the additional existing user fees are set by formula in the law and are intended to cover inflation.

Further, $32 million of the increase is for tobacco programs (i.e., not food safety or medical products). If you take the tobacco funding (all user fees) out of last year’s and this year’s FDA totals, the proposed increase for the remainder of FDA (non-tobacco appropriations and user fees) drops to $68 million. This is a little less than a 1.8% increase over the prior year’s total. In short, the actual proposed increase is between a quarter and a fifth of what is claimed.

To sum up, the FDA’s budget in FY 14 is $3.853 billion for food and medical products. This includes appropriations and user and certification fees, but excludes tobacco user fees. On top of this amount, the President’s request offers a mere $68 million increase for FY 15, a third in BA appropriations and two-thirds in user fees.  This amount is wholly inadequate for a federal agency with critical health and safety responsibilities and which is also trying to implement four major new laws passed in the last four years.

It is clear to us that FDA will be significantly underfunded in FY 15 unless Congress goes beyond the President’s request. That is the Alliance’s only mission for this year.

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P.S.: I hear a lot about how the President’s budget request is “dead on arrival,” as if it doesn’t matter.  Actually, the only part that is DOA is the macro part — how the President proposes to balance discretionary expenditures, revenues, and entitlements to reduce the annual budget deficit. With regard to specific agency proposals, the President’s request is a benchmark that the appropriations committees look at, along with the prior year’s funding, before they make any decisions.  While the FDA numbers are much too low, we cannot count on Congress dismissing them unless we provide persuasive arguments for why FDA needs increased appropriations.

Note: This week’s analysis and commentary was written by Steven Grossman, the deputy executive director of the Alliance for a Stronger FDA

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