Skip to content

The FY 20 Budget and BA Funding for FDA Isn’t Going to Be Easy

May 31, 2019

This week was quiet, but we anticipate a hectic appropriations schedule from now through the beginning of the next fiscal year (October 1). That makes this a good week to consider the potential obstacles to increased BA funding for FDA in FY 20.  Our focus is on macro-budgetary obstacles (affecting most federal agencies), rather than micro-budgetary ones (affecting only FDA).

The foremost obstacle is the lack of a budget agreement among the House, the Senate, and the President. Ordinarily, the lack of a House-Senate budget resolution (non-binding) does not stall the process. The House and the Senate make their own decisions about how much to spend. Differences between the bills (including spending levels) are then resolved later in a conference committee. While the President can choose to veto spending bills he considers to be too large (or too small), he has no role in the Congressional process of deciding how much will be spent in any given fiscal year.

That won’t work this year because the Budget Control Act of 2011 (BCA) sets FY 20 spending ceilings so low that Congress would need to add more than $70 billion to defense spending and $50 billion to non-defense spending just to bring spending back to the FY 19 level. A change in law is needed that would either set higher levels or suspend the BCA entirely for FY 20. Congress can’t by-pass the President on this; he must be willing to sign the budget agreement into law.

If Congress fails to raise or waive the spending caps — or the President vetoes the legislation making these changes in law — then Congress will need to cut $120 billion (about 10%)  from existing funding levels. If they don’t do this, then the BCA would impose an across-the-board cut (sequestration) to derive the same reduction in spending. Because a few programs are exempt from these across-the-board cuts, the percentage reduction might be a few percent more than 10%.
Sequestration would have a devastating impact on FDA: perhaps a $300 to $350 million cut in BA funding (below FY 19 levels) and perhaps another $200 million in user fees (excluding tobacco) that would be collected but couldn’t be spent. Losing $500 million or more in funds would truly be a worst case for FDA.

Even if there is a budget agreement (and almost everyone in Congress wants that outcome), there are still other consequential blips that could negatively affect FDA funding.

Specifically, FDA would be hurt if it was funded under a Continuing Resolution. This would limit FY 20 spending to the FY 19 level and impose constraints on new initiatives. And, as we discovered this year, if there is a failure to agree on FY 20 funding under a Continuing Resolution, then another shutdown might occur. Even if all monies are restored to FDA afterwards, the agency would still experience significant impact on morale, retention and recruitment. There is also another way that a shutdown could occur: if Congress and the President can’t agree on legislation that would raise (or waive) the ceiling on the national debt. The deadline for raising the ceiling is likely to be between August and October and is always politically difficult. There is some talk that the debt ceiling extension would be part of any budget agreement, but this is speculative at this point.

Having explored some of the worst case scenarios for FY 20 FDA funding, it is important to stress that there are many good scenarios where FDA receives the support it needs to serve the American people and meet its many mission-critical responsibilities. The Alliance is working hard to assure FDA has the resources it needs. The initial House mark-up is a positive sign that Congressional support for FDA remains strong.

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

Comments are closed.