Alex Philippidis Senior News Editor Genetic Engineering & Biotechnology News

As elections approach, likelihood of a spending bill covering institute or deficit reduction plan seems bleak.

NIH may go the rest of this fiscal year without an approved budget. This adds to the uncertainty over the agency’s future spending given that a Congressional “supercommittee” failed to craft a deficit-cutting plan for the following decade by the November 23 deadline.

The Joint Select Committee on Deficit Reduction must now scramble to create a strategy that delivers at least $1.2 trillion in spending cuts over 10 years that will take effect three months into next fiscal year. If it misses this deadline as well, an across-the-board 7.8% budget reduction will be put in place.

At the same time, a more immediate budget hurdle has emerged for NIH in recent days. Congressional leaders have dropped earlier plans to agree on funding for NIH and the rest of the U.S. Department of Health and Human Services (HHS). The plan was to develop a Labor-HHS-Education spending bill that would either be combined with all remaining appropriations bills in an “omnibus” bill or with some appropriations bills in a “minibus” measure.

House and Senate are instead looking to fund Labor-HHS-Education and a separate Interior-Environment appropriations bill for FY 2012 through one or more stopgap continuing resolutions (CRs); the current CR expires on December 16. The move lets lawmakers bypass several political minefields standing in the way of a traditional spending measure during an election year for President Barack Obama, all House members, and one-third of the Senate. Those minefields range from HHS implementing President Obama’s healthcare measure and allowing federal funding for abortions.

The move to a CR would also allow Congress to wrap up FY 2012 appropriations in time for next year’s election. Congress also hopes to eliminate the risk of additional minibuses either stalling in the Senate—as the one covering Energy and State Department spending did—or advancing and further inflating spending.

That concern, voiced by House Republicans, explains how House Democrats enabled the first minibus to clear their chamber on November 17 despite their minority status. That minibus funded FDA at about the level proposed by the Senate, funded NSF and the National Institute of Standards and Technology at higher levels than either branch of Congress proposed, and cut funds for the Office of Science and Technology Policy.

Consequences of a CR

Jennifer Zeitzer, legislative director for the Federation of American Societies for Experimental Biology, told GEN that if Congress agrees to a CR, it would not necessarily mean funding equal to that of last fiscal year. The current CR cut 1.5% from FY 2011 spending.

“If they continue at the current CR level, then that’s going to be a percent and a half below 2011, so there would be a cut in 2012 plus the looming cuts coming in 2013,” Zeitzer cautioned. “That’s just going to be enormous for NIH.”

Zeitzer and Dave Moore, senior director, government relations for the Association of American Medical Colleges (AAMC), said the size of FY 2012 budget will be key to gauging how severe the automatic cuts, or sequestration, will be for NIH and researchers who depend on grant funding from the agency.

“Part of the difficulty of projecting the impact of sequestration on any budget, NIH specifically, is the fact we don’t know what the 2012 number is going to be,” Moore told GEN. “If we have to take 8% in an across-the-board cut, what base are we taking that from?”

Complicating efforts to gauge the effect of cuts in NIH, he said, are variations in the size of research grants and uncertainty over how NIH might carry out an across-the-board cut: Slice from center grants or individual research project grants? Reduce the size of grants?

Earlier this month, AAMC urged appropriations leaders in the House and Senate to fund NIH at the highest level possible. “I’m not terribly optimistic that we’re going to see much of an increase when all is said and done,” Moore said.

During their respective budget-crafting processes, the Senate Appropriations committee approved, on September 21, $30.5 billion for NIH, down 0.6%, or $190 million, from last fiscal year’s budget of about $30.68 billion. House Appropriations, however, proposed a $31.7 billion NIH budget, up about $1 billion from FY 2011, through an unusual draft Labor-HHS-Education spending bill championed by Rep. Denny Rehberg (R-MT). The House plan echoes President Obama’s budget proposal for a $200 million, or 3% increase, from FY 2011’s funding level of $30.5 billion.

The House tied its proposed budget hike to a pair of stipulations opposed by Moore and other NIH advocates as examples of micromanagement. The House Appropriations measure would require the agency to award at least 9,150 new and competing grants and maintain a 90–10% split between funding for its extramural and intramural research programs.

Impact of Sequestration

Under the sequestration provision NIH would be forced to live with a $28.3 billion budget. If sequestration does go through, discretionary appropriations would be cut across the board as of January 2, 2013, unless both chambers of Congress approve a deficit reduction plan without amendments by December 23. The committee’s Democratic co-chair hinted of an effort to meet at least that deadline and undo sequestration. “For me, this is not the end of a process; it is the beginning of one,” said Sen. Patty Murray (D-WA) in a Seattle Times guest column.

For FY 2013, the across-the-board cuts would be 10% for defense programs, resulting in savings of $55 billion; and 7.8% for nondefense programs such as NIH, resulting in a $39 billion savings overall but costing NIH more than $2.39 billion.

“About 2,500 to 2,700 fewer National Institute of Health research project grants would be made to universities and institutes throughout the country for research into the causes and treatments of diseases,” according to an October 13 letter to the supercommittee by the ranking Democrat on the House Appropriations Committee, Rep. Norm Dicks (D-WA).

Dicks noted that other science agencies would see reduced spending if sequestration were to occur:

  • NSF: The foundation’s budget would shrink by about $530 million from FY 2011, including $430 million from research grants and $67 million from science, technology, engineering, and mathematics (STEM) education programs. “At this level, NSF would fund nearly 1,500 fewer research and education grants, supporting approximately 18,000 fewer researchers, students, and technical support personnel than it did in FY 2011.”
  • CDC: The centers would have “about $440 million less” from the $5.6 billion in discretionary FY 2011 budget.
  • FDA: The agency’s budget would drop nearly $200 million from $2.452 billion in FY 2011, not counting revenue from user fees paid by industry. Dicks said the cut would “lead to a sharp reduction in the number of samples of food and medical products coming into our country from overseas.”

Dicks said the examples juxtaposed with his spending cut numbers “are by no means comprehensive but suggest the complications and challenges that sequestration would impose.”

Zeitzer added, “This is going to be devastating for NIH, and I don’t think it’s going to be much better for NSF. It’s just an incredible step backwards.”

Problems with Maintaining Status Quo

All those unappealing cuts should make Congress more likely, especially in an election year, to cobble together a spending-reduction package to avoid the mandatory across-the-board cuts. But the election also makes it less likely that House and Senate leaders will carry out a necessary compromise on a budget for FY 2012 that will include NIH, CDC, and the rest of a Labor-HHS-Education spending bill.

There is precedent for long-term funding of programs through CRs. For example, the Small Business Innovation Research program has operated on the same flat $2 billion per year budget through three years of CRs.

The plans taking shape to maintain similar status-quo funding for NIH and CDC through the election using a CR may be comfortable for Congress but is very discomforting to supporters. The agencies would need exemptions to allow new programs such as the National Center for Advancing Translational Sciences (NCATS), a priority of NIH director Francis S. Collins, M.D., Ph.D.

Even if it obtains exemptions, NIH will have the challenge of funding NCATS from its FY 2011 budget minus 1.5%; NCATS is no small project at a projected $721 million. The agency has said it would redirect funds from existing centers to be folded into NCATS, while pursuing $100 million in new funds for the center’s planned Cures Acceleration Network.

The future of NCATS and other NIH initiatives should be decided not by CRs but through legislative give-and-take, in a budget process that worked well enough for FDA and NSF a few weeks back. Unfortunately that process, like the rest of Congress, is showing more and more signs of dysfunction the closer and closer Election Day 2012 gets.

Alex Philippidis is senior news editor at Genetic Engineering & Biotechnology News.

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