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From Fantasy to a Potential Reality … Maybe?

June 16, 2017

As we have described over the last two weeks, here and here, the short window between release of the President’s budget request and the end of the fiscal year … combined with sharp policy differences on spending priorities … have made the pathway to final appropriations bills even more uncertain than usual. If a Congressional budget resolution is not adopted — or is consensus-driven rather than based on the President’s proposal — then it is possible that FDA will emerge unscathed and hard budget decisions will be put off until the FY 19 cycle that starts next February. This is not a prediction, just a possibility.

In an ideal world, the Congressional budget and appropriations processes are straightforward. The Budget Committees reviews programs and projects revenue, then votes on how much aggregate federal spending will be permitted for the next fiscal year and where major shifts in expenditures and receipts should come from. This task is lightened considerably by the Budget Control Act, which sets ceilings on defense and non-defense spending, as well as the total amount that can be spent on discretionary programs. When the budget process is completed, the appropriations committees know how much they can spend on discretionary programs and allocates a portion of the total to each of their 12 subcommittees.

In reality, Congressional budget resolutions are difficult to construct, hard for Members to vote upon, and often produce a conflict between House and Senate versions. As a result, in most years there is not a House-Senate budget resolution. Instead, the issues that are supposed to be formally resolved are conveyed in less formal terms to the appropriations committees and they go about their business of allocating to subcommittees and appropriating. This may yet happen.

However, it is highly unusual for the Senate Majority Leader, faced with a transformative budget request from the President of the same party, to nonetheless direct appropriators to work from the previous year’s appropriations levels. Politico speculated that the purpose might be to clear the path for passage of a continuing resolution, presumably to avoid a government shut-down. It is not a bad thing for Congressional leaders to be making judgments now that reflect concerns over an end-game that is still a few months away.

Given the threat to FDA funding implicit in the President’s request (an increase based on proposed user fees, a significant cut if those aren’t enacted), it would be highly favorable to FDA for appropriators to be working from the agency’s FY 17 base appropriation of $2.75 billion. Although the agency’s responsibilities and costs continue to rise, it is far easier for us to advocate for a modest increase if the base dollars are not threatened. Of course, this all depends on Congress not reaching an agreement on a budget resolution and using FY 17 as a default … but the Majority Leader’s directive moves this from fantasy to at least a potential reality.

Editorial note: The Analysis and Commentary section is written by Steven Grossman, Deputy Executive Director of the Alliance for a Stronger FDA

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