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“Fiscal Cliffs” and Life in “Interesting Times”

November 14, 2014

Alliance members had the benefit this week of listening to four veteran political players discuss the election and its likely impact on discretionary funding and, specifically, FDA. Of particular interest: the likelihood that there will be a series of “fiscal cliffs” in 2015 that will (1) renew partisan debate over budgetary matters and (2) run the risk of setting off a crisis if they are not satisfactorily resolved. For example, physician payment cuts go into effect in early 2015 unless money is found to delay or offset the budgetary savings that have already been booked. A few other major programs face similar expensive issues (impasses?) before FY 15 is through. Also, toward mid-year, the federal government will hit the debt ceiling and lose its ability to borrow. Then there is the critical question: what will Congress do (if anything) to avoid the across-the-board sequester cuts scheduled to start in FY 16 (October 1, 2015).

In short, there will be constant challenges next year — ones that are already known and can be anticipated — that threaten the widely-shared hope for a more deliberative and more productive Congress. At least this seems to be true with regard to fiscal and budgetary matters.

Upon further reflection, I realized that we don’t have to wait for 2015 to see this dynamic at work. As described above in the Advocacy at a Glance section this week, the path is being cleared for the enactment of an FY 15 omnibus appropriations bill that would provide funding for the rest of the fiscal year. At the moment, this seems to be a bipartisan goal, shared throughout the Senate and House by both parties’ leadership teams.

It may happen just that way, with both parties supporting an omnibus. But the risk of the effort failing is also substantial.

The treatment of supplemental funding requests is one possible roadblock to resolving FY 15 funding by December 11. The President has sent two requests for supplemental funding to the Hill. One is for $6.2 billion for fighting Ebola and the other is for $5.6 billion in extra war funding to fight the Islamic State (ISIS). Given the urgency on both issues, it would be timely for Congress to deal with them in the omnibus. But will funds for these two initiatives be added to total spending or will they require offsets in other (presumably discretionary) spending? If there is an offset, $10 billion for Ebola and ISIS would equal a 1% across-the-board cut to all other programs, including the Defense Department. There is a third option: finding some rationale and political consensus to fund them “off-budget.” All of these options will have opponents, even while the additional monies might be generally viewed as necessary.

Another possible roadblock centers on the President’s stated desire to handle the immigration controversy through Executive Orders. Both House and Senate Republicans stridently oppose this effort and some believe their best shot at stopping the President is by inserting provisions into the omnibus that would forbid expenditures to carry out his orders. Apart from genuine policy differences between Republican and Democratic positions on immigration, the issue stirs a lot of emotions among Members of Congress and their “back home” constituency. Because the “solution” for some Republicans is an appropriations rider, it does seem like the immigration issue could become so controversial that it upsets plans for a bipartisan compromise on FY 15 funding. The Republican options and possible strategies are discussed here, here, and here.

Like it or not, we live in interesting times. We will keep you posted, focusing on the impacts for FDA.

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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