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Understanding the Short-Term CR

October 2, 2020

Q: Were there FDA provisions of the CR in addition to continued funding?

A: The CR includes language to appropriate the user fees to be collected under the new Over-the-Counter (OTC) monograph legislation enacted earlier this year. Otherwise, the program could not start on its intended date of October 1. The other FDA provision extends the Pediatric Priority Review Voucher (PRV) program to December 11. Otherwise, these orphan drug incentives would have expired on September 30. This allows Congress to adopt (or not) House-passed legislation that would extend the program for several more years.

Q: What are the consequences for FDA if the agency begins the fiscal year (October 1) with funding from a Continuing Resolution?

A: The consequences of a CR are severe, even though they may be temporary. The FDA would need to carry out its programs using the FY 20 (prior year) funding levels, without the increased monies proposed for FY 21 by the House. Further, FDA would be limited in its ability to start new initiatives (variously defined) for as long as it is on CR funding. Last (but hardly least), CRs create uncertainty, which makes program and personnel planning difficult. The various aspects of CRs are covered in the next four questions for which the answers are derived from OMB guidance.

Q: Do short-term CRs limit the purposes for which funds may be obligated?

A: Generally, yes. A CR makes amounts available subject to the same terms and conditions specified in the enacted appropriations acts from the prior fiscal year unless otherwise stated in the statutory text. Normally, an agency is not permitted to start new programs for which authority did not exist in the previous fiscal year.

Q: Do short-term CRs limit the amount of funds that may be obligated?

A: According to OMB: agencies

may not obligate funds under a short-term CR that would impinge on final funding prerogatives of the Congress. CRs usually include provisions directing agencies to execute programs using the most limited funding actions permitted in order to provide for continuing projects and activities. Agencies are also directed by the CR to not execute programs that would otherwise have high initial rates of operation or complete distribution of appropriations at the beginning of the year because of distribution of funds to States, foreign countries, grantees, or other.

Q: What happens if the eventual full-year enacted appropriations provides less monies than were anticipated under the short-term CR?

A: Agencies must do everything possible to reduce the amount of their existing obligations so that agency spending for the full-year does not exceed the agency’s full-year budget. To our knowledge, this is rarely an issue and we do not envision any circumstances under which this would affect FDA.

Q: Does OMB publish a detailed account of operations during a short-term CR?

A. Yes. OMB Guidance for Agencies (here) answers 23 questions about CRs covering 15 pages.

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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