The FY 14 CR Circulated in the House This Week

Mid-week, the House appropriations committee and Republican leadership proposed an FY 14 CR that would run from October 1 to December 15. Funding is set at the FY 13 post-sequester levels, which is being portrayed as a neutral basis for moving forward temporarily.  As we understand it, if the House were to pass this CR, then the Senate would also adopt it and the President would sign it. The immediate government funding crisis would be averted, including the threat of a government shut-down on October 1.

However, no vote was taken this week because it immediately became clear that House Republicans were not united behind this approach. There are objections that this CR spends too much money and also that it would allow the Obama administration to take important steps forward on implementing the Affordable Care Act (health care reform).  We will have a better idea next week on whether the proposed CR will go forward, whether the funding level will be adjusted downward to the House budget resolution level, and whether there is any way around the impasse created by tying the fate of the CR to the fate of the ACA.As was described in last week’s Analysis and Commentary, the net amount of monies that federal agencies will receive in FY 14 is highly dependent on whether there will be a sequestration and how much the program was slated to receive immediately before the automatic cuts go into effect in January 2014.

The Budget Control Act provides for a total amount of discretionary spending in FY 14 and, within that, the total amount that can be spent for defense and non-defense programs. Absent a larger budget deal, spending on FY 14 defense programs cannot exceed $498.1 billion. Any overage will be subject to a sequester that reduces spending to that amount. Similarly, spending on FY 14 non-defense programs cannot exceed $469.4 billion and any overage will be subject to a sequester.* Thus, there can be a defense sequester and not a non-defense sequester and the amount/percentage cuts are almost certain to be different if both are going to be sequestered.

The Continuing Resolution level proposed in the House would -- if extended into January 2014 or for a full year -- require a sequester of about $20 billion (4%) on defense spending. There would be no sequester of non-defense programs.However, as noted, the result for any given federal program is still dependent on what level of funding they would receive prior to determination of a sequester. The vast majority of non-defense discretionary programs would be radically cut under House appropriations bills. FDA is an exception -- the proposed FY 14 funding level in the House Ag/FDA appropriations bill ($2.461 billion) would be higher than the CR level (essentially the post-sequester FY 13 level of $2.386 billion).

This doesn’t alter our judgment from last week that the Senate level is best at addressing FDA’s growing responsibilities. Rather, it tells us that there is tremendous support for FDA in both appropriations committees and that what works out best for FDA on the micro level may be counterintuitive and different than most other programs. To gain the most possible funding for FDA requires both strong numbers from the subcommittees and the absence of a sequester.

*Note: These numbers do not include various adjustments, which are zero-sum and do not affect the triggering or amount of sequester.

Note: This analysis and commentary is written by Steven Grossman, the Deputy Executive Director of the Alliance for a Stronger FDA.