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Potential Promise … But Storm Clouds on Horizon

May 10, 2019

Q: The House appropriations committee marked up the L-HHS bill this week and NIH (and other public health programs) did quite well. Is that a portent of good things for FDA?
A: Maybe. There appears to be renewed awareness that investing today in agencies such as NIH and CDC will pay off tomorrow. This is also true for FDA and over the last decade the Ag/FDA appropriations subcommittees have proven to be great supporters of the agency. That is reason for optimism. On the other hand,  the L-HHS subcommittee was allocated $11.8 billion over FY 19, a 6.6 percent increase. Ag/FDA was given only a 3% increase. However, there are a lot of variables involved in determining  how much money is available for agency increases. So, this comparison may be more dramatic than the reality of how much each subcommittee has to spend.

Q: None of these early House numbers matter if no agreement is reached to raise the spending caps for FY 19. How might that play out?

A: It would be easier to resolve (and to predict) if there were just two sides trying to find some middle ground to agree upon. However, both House and Senate know that the caps need to be raised, but the President has hinted he would veto such a deal. There are defense hawks who favor raising only the defense cap or raising it by a significantly greater degree than non-defense, while there is sentiment in the House to give a larger cap increase to non-defense programs. There are at least a few Members of Congress who would be okay if the OCO (overseas contingency operations, essentially war funding), which is off-budget, were used to increase defense spending. Democrats and some Republicans (including some defense hawks) feel that would be a dangerous budgetary precedent. If caps are to be raised, some constituencies in Congress are for bringing it only up to the FY 19 level, while others are looking for major increases in the caps, albeit with many groups proposing different target numbers.

It seems unavoidable that this will be resolved by leadership — House and Senate, Democrat and Republican. There is the will on the Hill for the budget deal to be done quickly. However, that seems unlikely given the number of different viewpoints and the  ideological bent of discussions.

Q: Is there any chance that the Congress will finish the FY 20 appropriations by October 1?

A: That seems unlikely. In several recent years, we thought Congress was going to achieve “regular order” appropriations and be done by the start of the new fiscal year. Those years were more promising than this one, but still all or some of the government was funded on a Continuing Resolution on October 1. There are a number of reasons why the process slows, but this year’s key one — the need to raise budget caps already in law — is going to be hard to resolve.

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

Advocacy at a Glance

May 10, 2019

No Budget Agreement: House Moves Forward, Senate Waits. Under “normal order” in the annual appropriations process, the House and Senate Budget Committees develop an early agreement on the total spending levels for the entirety of defense and non-defense discretionary spending. That topline spending number is known as the “302(a)” spending ceiling, and under normal order it is typically completed by the end of April. Once that agreement is reached, the Appropriations committees divvy up the 302(a) money, assigning a portion to each subcommittee. The subcommittee allocations are known as the “302(b) allocations”  and under normal order are typically determined in the May time frame.  Over the past several years, we have gotten used to the appropriations process not following the “normal order,” and this year is no different than the past several years.

Under the Budget Control Act of 2011, the ceiling number for FY 20 would require a $70 billion cut to defense programs relative to FY 19 and $50 billion less to non-defense programs relative to FY 19.  It is widely understood that Congress will need to lift the caps, or face the prospect of massive spending cuts. The key issue being: to what levels will the caps be lifted? The resolution of that may take weeks or maybe even more time and could delay the entire appropriations process. For a deeper look at how that might play out, see this week’s Analysis and Commentary.

Regardless of the lack of resolution on the 302(a) and a 302(b) numbers, the House has chosen to move the appropriations process forward. They have created a 302(a) level that they would like to see adopted by Congress and then made 302(b) subcommittee allocations. Numbers are likely to be different in the final budget agreement and in Senate subcommittee allocations, but at least some of the hard work of program funding will be started. It is possible that the Senate may wait for a House/Senate agreement on budget ceilings before deciding on their own subcommittee allocations. This is subject to change, especially if it appears that a budget agreement is unlikely in the near term.

The House Ag/FDA Appropriations Subcommittee Allocation Would Increase Spending Above the FY 19 Levels. As noted above, the numbers being used in the House appropriations process are meaningful, but have a high risk of revision as the House and Senate continue to negotiate budget numbers. Nonetheless, the House Ag/FDA allocation is $24.3 billion, a $700 million year-over-year increase. This is a 3% increase, comparable to the increase for defense, but less than a number of other subcommittees that were raised by 4% to 8%.

L-HHS and Defense Moving in the House, Ag/FDA Later in May or Early June. A key learning in the FY 19 process was that pairing the L-HHS and DOD funding bills made for smoother passage in Congress and was virtually veto-proof. Those two bills are now part of the first wave of funding bills in the House, along with the non-controversial Military Construction/VA and Legislative Branch bills. Ag/FDA may come up the week of May 13 (next week), but more likely the week of May 20 or in early June when the House returns from Memorial Day recess week.

Senate Minority Leader Schumer Advocates for Food Safety Funding. In a statement released by Sen. Chuck Schumer last week, he expressed support for $32 million for food safety funding that is included in the President’s FY 20 budget request. Half of this amount would be used to improve signal detection of foodborne illness and strengthen the FDA’s response to human and animal food contamination. The other half would be for improving food safety inspections using new technologies. He does not address other opportunities at CFSAN and CVM.  Taking a broader perspective, the Alliance requested that Congress appropriate $102 million for food safety programs. The text of the Alliance “ask” is here.

Federal Budgeting: A Brief Refresher Course

May 3, 2019

For all readers, both new and old, we are providing a refresher this week on the federal budget, with an eye on how it applies to FDA resources in the current FY 20 funding cycle. … READ MORE …

Advocacy at a Glance

May 3, 2019

House Appropriations Subcommittees Begin FY 20 Bill Approvals. Three subcommittees of the House Appropriations Committee this week began the FY 20 “markup” process, … READ MORE …

Gains and Gaps in Knowledge about Shutdown Processes

April 19, 2019

In early January, the Alliance put out an “FDA shutdown toolkit” that was well received. We were working on a revised version when the shutdown (thankfully) ended. … READ MORE …

Advocacy at a Glance

April 19, 2019

Budget and Appropriations: Progress But No Clear Path Forward. The budget and appropriations situation was extensively briefed in last week’s Friday Update (here and more here) and Congress has been in recess since then. … READ MORE …

FY 20: The “Ask”; the Possible; and the Realities

April 12, 2019

Q:  We know that the late arrival of the President’s budget made it difficult to put together the Alliance’s FY 20 “ask.” Where did the Alliance finally come out?

A: The top-line; the Alliance is requesting $418 million in additional FDA programming for FY 20. Of that amount: $316 million is for medical products activities (the same amount as the President’s request) and $102 million is for food safety activities ($60 million above the President’s request). Our “ask” is built around a total number of dollars FDA needs and some general priorities for justifying that amount. We encourage Alliance members to support the Alliance “ask” and the general priorities we lay out. For Alliance members who are advocates for funding specific programs and initiatives within FDA, please utilize the Alliance position and supplement it with your own advocacy positions. The text of the Alliance “ask” is here. It is also described in slightly greater detail in the testimony that the Alliance submitted to the House and Senate Ag/FDA Appropriations Subcommittee. House testimony is here and Senate testimony is here.

Q:  Since January, every Alliance Q&A on the FY 20 appropriations process has said how difficult it is going to be. Are things getting any better?

A:  Maybe. One of the purposes of having Congress pass a joint budget resolution is that it provides top-line spending numbers (section 302(a)). Working within that amount, the appropriations committees then allocate a certain amount to each subcommittee (the often-cited 302(b) numbers). Sometimes House and Senate allocate different amounts to subcommittees, which can create a stumbling block to reaching agreement on specific appropriations bills. That pales in comparison to times when — in the absence of a budget resolution — the House and Senate adopt different 302(a) spending ceilings.

That’s where the FY 20 process (the current one) was heading and still may go. It is a very hopeful sign that Speaker Pelosi and Majority Leader McConnell are talking about a budget deal that might fix several impediments to a smooth FY 20 appropriations process. Presumably, they are looking for an agreement that would prevent the massive spending cuts that would be required by the spending limits in the Budget Control Act of 2011.  Also, it has been reported that House Appropriation Chair Nita Lowey has said that her committee staff are already working on setting 302(b)’s numbers so that subcommittees in the House can at least can get started.

Beyond that, we would hope they would agree on a common 302(a) spending number, so both House and Senate start allocating dollars to subcommittees using the same bottom line. A deal might also resolve how much defense spending will be placed under the Overseas Contingency Operations (OCO), which is designed to support the cost of military operations, i.e. wars, and does not count against spending ceilings. For purposes of agencies like FDA — that are part of the non-defense discretionary portion of the budget — there is a risk that routine DOD expenditures will get passed through the OCO and weaken efforts to keep non-defense growing by the same amount as defense.

Of course, there is no guarantee that a deal will be reached. Democrats and Republicans have different ideas on how to resolve their differences. But there will also be great pressure to find common ground and avoid further government disruption.

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