What Happens to FDA If There is a Shutdown
If Congress fails to extend the Continuing Resolution (CR) by midnight on January 19, 2024, the Food and Drug Administration (FDA) will enter into a “lapse period” in which no congressional appropriation exists to fund the agency. The lapse period will continue until the date of enactment of a Fiscal Year (FY) 24 appropriations bill or adoption of another FY24 CR. The threat of a shutdown could recur whenever a short-term CR runs out.
During this lapse period, there are limited activities in which the FDA can engage. The activities that the agency can perform include: (1) activities necessary to address imminent threats to the safety of human life and (2) activities funded by advanced and carryover funds, notably but not exclusively, user fees.
During a shutdown, all FDA employees will be assigned into one of three categories:
Exempt. Employees are “exempt” from furlough if they are not affected by a lapse in appropriations. This includes employees whose functions are not funded by annually appropriated funds and would include employees carrying out activities funded by user fees and by advanced appropriations (such as “no year” money).
Excepted. “Excepted” is used broadly to refer to employees whose work is funded through annual appropriations but who are not furloughed because they are performing tasks that, by law, are allowed to continue during a lapse in appropriations. The OMB guidance on this can vary from year to year, but basically, these will be FDA staffers who work in areas where their absence would constitute a threat to public health and safety or property.
Furloughed. A furlough is the placing of an employee in a temporary non-duty, non-paid status because of lack of work or funds, or other nondisciplinary reasons.
No new user fees are accepted during a lapse period and FDA can only undertake user fee activities for which money has been received prior to the shutdown. Depending on the duration of the shutdown, account balances, and burn rates, there may come a point where funds to carry out user fee-funded activities are not available, and employees are furloughed. This eventual phase-down will be different for each of the separate user fee programs.
As of January 11, we do not know the balances in the user fee accounts. There are no public sources for this information. However, we do not anticipate funding problems with user fees unless a shutdown is prolonged.
Note that nearly $2 billion of taxpayer funding (non-user fees) supports medical product programs at FDA. Some portion of those funds will not be available during the shutdown and will impact what programs in CDER, CBER, CDRH, CVM, and the Commissioner’s office can continue.
In response to media questions, the Alliance has said: “About 80% of FDA’s existing staff will be working if there is a shutdown. FDA’s leadership will be responsible for triaging available personnel and funds to ensure that the highest priority activities continue to be supported for as long as possible. The Alliance trusts in their judgment and so should the American public.”
Editorial Note:
The Analysis and Commentary section is written by Steven Grossman, Executive Director of the Alliance for a Stronger FDA.