FDA Funding At Risk In Current Budget Negotiations

In June, as part of the Fiscal Responsibility Act (FRA), the debt limit was suspended until January 2025 and total discretionary spending levels were set for FY 24 and FY 25. No one was particularly happy with the final legislation. However, it appeared that Congress had bought 18 months of budget peace, deferring future funding battles until after the 2024 election. (see our analysis after the FRA passed, here). 

That went sideways for a few months because then-House Speaker Kevin McCarthy decided that the spending levels in the FRA were ceilings and that the House could choose to spend less. Many of the House funding bills reflect those lower spending levels.

It now appears the House has informally acknowledged that the FRA agreement incorporated spending levels, not spending ceilings. 

We now have the status quo ante, but clearly, we do not have budget peace. Why not? 

Using the FRA spending levels, the Senate negotiated bipartisan agreements on the specifics of FY 24 appropriations bills. Their view: with some belt-tightening, it is possible to increase defense spending and maintain something approaching FY 23 spending levels for non-defense programs. 

In contrast, House Republicans are still looking for ways to shrink government spending by leveraging the FRA provisions that are operative if Congress fails to pass all 12 appropriations bills. The situation is extraordinarily complex and the Alliance thanks Erik Fatemi, of Cornerstone Government Affairs, for sharing his highly-detailed “FAQ” that analyzes the relationship of FRA to the current budget negotiations.”  

Once these negotiations conclude with a topline number (and a defense/nondefense split), each appropriations subcommittee will be given its share. (see discussion of the macro- and micro-budgets here). Eventually, that drives the amount of spending available to FDA from the Ag/FDA appropriations subcommittees. 

What is the range of outcomes for FDA’s FY 24 funding? 

If the Senate position (topline and major details) prevails, then FDA will probably receive level funding in FY 24 with a range of +/- $35 million (+/- 1%). 

This is the most likely outcome and, at this point in the process, the best case. 

However, that is not the only possible outcome. The House Ag/FDA spending bill that was defeated on the House floor incorporated across-the-board cuts of about  14%. That would place FDA funding at about $3 billion, not quite a $500 million cut from the FY 23 levels. 

House Speaker Johnson is approaching the negotiations urging the adoption of a “date-change, full-year CR.”  According to Senate Appropriations Committee Chair Patty Murray,  “for domestic programs (excluding VA medical care), such a CR would mean as much as a 9.4% cut).” For FDA, that would be about a $300 million cut. 

FDA and its stakeholders should be very concerned about the outcome of the current budget negotiations. While not the most likely outcome, large cuts might occur. If so, they will be across-the-board cuts, rather than any assessment of FDA’s resource needs or the value to the American people.

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