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More Good Progress; Still No Certainties

July 14, 2017

Compared to its prospects at the beginning of this year, FDA has made good progress so far. Consider the following:

  • Faced with the possibility of a 15% to 20% cut in FY 18 domestic spending, the Administration actually proposed an increase in aggregate funding for FDA.
  • Faced with the Administration request for new user fee funding levels significantly above what has been negotiated over the prior 2 years, the House Energy and Commerce and Senate HELP committees choose to honor the agreed-upon amounts in the Food and Drug Administration Reauthorization Act (FDARA).
  • Faced with an Administration request for significant cuts in budget authority (BA) appropriations, the House Appropriations Committee chose to fund the agency at its prior year (FY 17) level. We are optimistic, but not assured, that the Senate Appropriations Committee will come in at the same or a higher level.

However, complacency is not warranted. There are a number of ways in which the appropriations committee bills being passed now might not be the amount agencies actually have to spend by the time FY 18 arrives.

For example, the House appropriations subcommittees have been marking up bills without knowing their allotted share of total FY 18 spending. This left open the possibility that bills passed earlier in the process might need to be cut back in order for there to be enough money left for the later bills. The subcommittee allocations adopted this week partially solves this problem — at least the amounts for each subcommittee would appear to be set relative to another. However, in the aggregate, those subcommittee allocations may be too high when the House and Senate Budget Committee determine FY 18 discretionary spending levels.

In the same vein, the Budget Control Act of 2011 provides for a sequestration (across-the-board reductions in appropriations) if aggregate spending exceeds the annual limits in the law. The limits for non-defense spending are lower in FY 18 than they were in FY 17, which guarantees there will be at least some cutbacks in domestic spending.

Also, the President’s and OMB’s roles in funding levels do not end with the delivery of the President’s budget request. One way of influencing spending levels are with the threat (or actuality) of a veto of one or more funding bills. Also, the President has the power to propose spending rescissions and force Congress to vote on permanently withholding already appropriated funds. This might be viewed as an “after the fact” line-item veto. This tool has been used in the past, although not widely or often. However, it may have appeal to the President in the situation where his party controls both Houses but appropriations bills are being passed that are more than he has requested.

In most years, what the appropriations committees provide to agencies, such as FDA, are what the agency ultimately has to spend. However, in the current environment, this cannot be considered a certainty.

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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