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Shutdown- and BA-Related Q&As Continued

January 26, 2019

Q. Why does FDA’s headcount seem to shift almost daily, along with frequent changes in what activities are being continued or phased out?
A. What happens during a lapse in appropriations is complex, particularly so at FDA, given its vast responsibilities and multiple funding streams. The key OMB document defines “excepted employees” as normally paid from the appropriation but whose job is necessary to protect public health and safety. “Exempt employees” are those whose work is paid for by funds apart from the budgetary appropriations. Examples would be commissioned corps officers (fully exempt) and those funded by user fees (who may be fully exempt, partially exempt or furloughed, depending on available dollars and priorities). Finally, if an employee is neither excepted nor exempt, then they are furloughed.

Conceptually, the number of fully exempt user fee employees at FDA will decline over time, depending on available funds and the impact of triaging funds to extend activity on the highest-priority programs. At the same time, the number of excepted employees is increasing as “public health and safety” becomes defined more broadly. An example has been Dr. Gottlieb’s success is moving more inspectors from furloughed to excepted status.

Q. Are the House-Senate Conference numbers (+$268 million for FDA in FY 19) likely to prevail when the shutdown ends?
A. Our understanding is that the Ag/FDA appropriations bill and conference report were all-but-finished by mid-December, before the shutdown occurred. Nonetheless, some of the first efforts to break the overall budgetary logjam would have resulted in FDA being funded by Continuing Resolution (explained further here). That would be a particularly bad result for FDA because the CR would have been at the FY 18, bypassing large increases for FDA that were part of both the House and Senate appropriations bills. At the start of the new Congress, the House proposed legislation that would have used the Senate number (+$159 million), rather than their own bill text (+$307 million).

Finally, the House-Senate conference numbers have been released (+$268 million) and the latest batch of bills have been incorporating the conference numbers. With the shutdown continuing, there is no guessing what the final result will be. However, the fact that House and Senate bills — both Republican and Democratic — are incorporating  the conference numbers is encouraging.

Q. Once we are past the shutdown and the FY 19 cycle, what are the prospects for a smooth FY 20?
A. Congress passed the Budget Control Act of 2011 to constrain discretionary federal spending over the following decade. Later negotiations have altered, or bypassed, caps in a number of years. Notably, FY 18 and FY 19 had higher ceiling caps than in law. FY 20 and FY 21 are not covered by any such arrangement. Based on FY 19 spending levels, meeting the FY 20 caps would require Congress to spend $71 billion less on defense programs and $54 billion less on non-defense programs. So, there is every reason to the think the FY 20 process will be contentious.

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