Congressional Budget Update

FY11 Budget Agreement

Congress narrowly averted shutting down the government on April 8 by finally agreeing to an FY11 budget.  At the time of the pending shutdown, a gulf of more than $50 billion in cuts separated the two parties. The Republicans showed few signs of backing down from demands for deep spending rollbacks, while Democrats opposed changes in policy that affected women’s healthcare facilities.

The final budget agreement included a 0.2% across-the-board cut for all non-defense discretionary spending. Also most program budgets, including those of the NIH and the NSF, received additional cuts beyond the 0.2%. The NIH will receive $30.7 billion in funding for FY11, down a total $260 million from the previous fiscal year. Of the funds to be cut, $210 million will be reflected in a pro rata reduction across all of NIH’s 27 institutes and centers, and the Office of the Director. The remaining $50 million will come from cutting in half the agency’s budget for buildings and facilities.

The NSF will be funded at $6.9 billion, which is $52 million below—or 0.8%—the FY10 enacted level. Programs affected by this reduction include, the Research and Related Activities Account that is cut by $42 million for a total of $5.6 billion, and the Education and Human Resources account that is cut by $10 million to $862 million.

FY12 Budget Forecast

On the same day that Congress passed the final FY11 budget, the House of Representatives passed the budget outline for FY12. According to one projection, the livelihoods of scientists, technical workers, and other lab support will be in jeopardy under the proposed House FY12 Budget Resolution. According to the projection, the spending plan would reduce the aggregate science budgets of the Office of Science, NSF, National Institute of Science and Technology, and NASA by $2 billion, causing major damage to the U.S.’s innovation enterprise and our nation’s ability sustain its global scientific leadership.[1]

Other alternative budgets have since been introduced. The President introduced a deficit reduction plan in mid-April. The details of the new plan are limited; in some areas—such as tax reforms—it mirrors the earlier FY12 budget proposal. His proposal aims to cut $4 trillion from deficits over 12 years through a combination of spending cuts and increased revenues generated by a tax code overhaul.

What is new is the suggested “debt failsafe trigger,” which would prompt across-the-board spending reductions if by 2014 the projected debt-to-GDP ratio is not stabilized and is declining toward the end of the decade. The trigger would not apply to Social Security, low-income programs, or Medicare benefits.

A third long-term budget vision is being prepared by a bipartisan “Gang of Six,” three of whom are current members of the Senate Budget Committee and four of whom participated in the President’s National Commission on Fiscal Responsibility and Reform last fall. No timeframe has been given for the release of that plan, but it might be part of the Senate budget resolution.

The six senators—Mark Warner ( D-VA), Saxby Chambliss (R-GA), Majority Whip Richard J. Durbin (D-IL), Michael D. Crapo (R-ID), Budget Chairman Kent Conrad (D-ND), and Tom Coburn (R-OK)—have been working to draft legislation based on the 2010 recommendations of the President’s fiscal commission to address the deficit. That means not just discretionary spending and entitlement program changes, but elimination of many tax incentives and a broader overhaul of the tax code. It is expected to be a plan that puts everything on the table—and that will draw criticism from all sides.

What You Can Do To Help

It’s going to take a vigorous defense in order to protect the NIH and NSF FY12 budgets. We will constantly have to remind Congress that the NIH and NSF serve as urgent national priorities.

The CLS, through the Congressional Liaison Committee’s grassroots network, will continue to alert you when it is an appropriate time to act. There is always a generic letter posted on the CLS Take Action site to enable you to contact your Member at any time throughout the year.

One thing that would help our cause more than any other would be if every CLC participant recruited at least one new CLC member. So ask one of your colleagues to join today by going to the CLC website and registering. It’s free to join and the CLC never shares or sells information provided to us.

With Congress’ support, the biomedical enterprise can continue to lead the way with unprecedented advances and economic prosperity.