Finalizing FY 22 appropriations requires resolution of budget and reconciliation issues

With House passage of an FY 22 Ag/FDA appropriations bill (+$257 billion in BA funding) and the Senate Appropriations Committee having passed a bill (+$200 million in BA funding), FDA is on track to receive a substantial budget increase. Still unresolved and essential is how we lock in a $200-250 million increase for the agency and how do we assure those monies arrive at (or soon after) the start of the new federal fiscal year on October 1.

The key is in the interplay between 1) the Congressional Budget Resolution, 2) annual appropriations, and 3) budget reconciliation.

The Congressional Budget Resolution creates a procedural framework for Congress by establishing rules and points of order to guide consideration of both appropriations and reconciliation.
Over the last 10 years, annual Budget Resolutions became somewhat less relevant because the Budget Control Act of 2011 set total spending levels and defense/nondefense allocations through FY 21. While those numbers were sometimes refined by Congress, the law nonetheless provided a framework for Congressional negotiators.

For fiscal year 2022, Congress started with a blank slate. From an appropriations standpoint, budget agreements trigger a series of essential steps under the Budget Control Act. The first is establishment under section 302(a) of an overall discretionary spending level. The second, under section 302(b) of that act, permits the appropriations committees to parse the total funding among the 12 appropriations subcommittees.

As is often done to get the ball rolling in the Senate, the Senate Ag/FDA subcommittee was “deemed” an allocation by leadership. Notable, however, is that fact that the House and Senate subcommittees are working from different numbers. In the current cycle, the House Ag/FDA subcommittee has $26.550 billion to spend while the Senate Ag/FDA subcommittee has $25.855 billion. The difference of $695 million is large enough to mean virtually all programs will have received less in the Senate than in the House

Budget resolutions can also establish reconciliation instructions, whereby authorizing committees are directed to alter spending and revenue within the mandatory programs under their jurisdiction (e.g. taxes, Medicare, farm support programs, digital spectrum auctions, etc.) This is the mechanism by which the tax revisions advanced by President Trump were adopted in 2017. One key procedural feature of reconciliation (as set forth in a Budget Resolution) is that only a simple majority is required to advance a bill.

One possible scenario immediately before us is that Senate Democrats this weekend could adopt a Budget Resolution (which can also be achieved with a simple majority.) That measure would formalize 302(a) allocation to the Senate Appropriations Committee and make likely that overall funding will settle somewhere between the House and Senate levels both in total and by subcommittee.
In theory, this would facilitate passage of individual appropriations bills in September that might otherwise languish for months for lack of agreement on total spending. If this occurs, it would be a good outcome for moving the FY 22 Ag/FDA funding bill.

As a practical matter, however, annual appropriation and the evolving politics of reconciliation are likely to become intertwined and delay ultimate resolution of spending issues. Failure to move appropriation bills prior to the start of the new fiscal year on October 1 would necessitate a Continuing Resolution (with level funding for FDA, a bad outcome) until a full year appropriation measure is adopted to cover the remainder of the fiscal year.

Amid all the maneuvering and interplay between budget, appropriations and reconciliation, Congress and the Administration will also need to address the impending need to raise the debt ceiling, a process which will inevitably color political calculations even more as we head into September.

Consider this commentary as the first installment of what is likely to be a complicated 8 weeks between now and the end of the fiscal year. Ag/FDA funding will be affected, and we will continue to provide updates and explanations.