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May 2012
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No major tax, spending and deficit votes expected until lame duck session
While the House and Senate continue to negotiate fiscal year 2013 spending bills, the upcoming presidential and congressional elections all but guarantee that Congress will not take any final votes on major tax, spending and deficit issues until the lame duck session, and possibly not until well into 2013. Addressing the daunting fiscal challenges facing the country will take compromise, and inevitably, unpopular spending cuts or tax increases, none of which interest lawmakers of either party as they prepare to face voters in November.
Specifically, Congress must approve deficit reductions totaling $1.2 trillion over the next 10 years. Otherwise, under current law, across-the-board cuts, known as sequestration, will automatically begin to take effect in January 2013.
Both parties want to find a way to avoid the automatic cuts, which would subject domestic programs such as the National Institutes of Health (NIH), the Centers for Disease Control and Prevention (CDC), the Department of Defense (DoD) and the Food and Drug Administration (FDA), among other agencies, to across-the-board cuts of 7 to 10 percent. Doing so, however, will require that lawmakers meet somewhere in the middle of a deep ideological divide over how to balance the budget. Republican negotiators insist on a measure that includes spending cuts only, while Democratic negotiators firmly believe revenue increases must be included.
NIH Director Francis Collins has warned members of Congress of the devastating impact sequestration would have on the agency, predicting the process would result in a cut of approximately $2.5 billion to the agency’s budget. Collins further indicated that such a cut means NIH would fund approximately 2,300 fewer grants in FY2013, accounting for almost a quarter of the new and competing grants.
Senate Majority Leader Harry Reid has stated that he will not stop the looming spending cuts unless Republicans accept a more “balanced” approach — plans recently embraced by the GOP would replace the sequester with even deeper cuts to domestic programs in order to spare the defense budget and prevent tax increases.
Meanwhile, appropriators continue moving forward with the regular fiscal year 2013 appropriations process, although the House and Senate are operating on different fiscal tracks. The Senate is writing appropriations bills at the levels specified in the debt limit law, while the House is using a lower, House-passed discretionary cap of $1.028 trillion.
Currently, the Senate plan provides appropriators with $157.7 billion to spend on programs funded in the Labor, Health and Human Services (Labor-HHS) bill, including NIH. This allocation is slightly higher than the FY2012 level, suggesting that Senate lawmakers may be able to at least protect current research funding levels for many programs, and possibly provide small increases for a select few. It is expected lawmakers will begin work on this important — and very controversial — bill in early June.
In contrast, however, the House is allocating $150 billion to spend on the Labor-HHS bill, which is more than a 4 percent cut below FY2012 spending levels, and more than $7.7 billion, or 5.15 percent, below the level that the Senate is able to distribute.
On the surface, the months ahead will be filled primarily with political posturing and symbolic votes, but lawmakers will still be laying the groundwork and determining their priorities for the decisions that will be made in the post-election frenzy. It is important to weigh in now and make sure biomedical research is a top priority.
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