Breakthroughs Blog: US budget

Next week marks a significant step in this year’s presidential elections, as Mitt Romney will become the official nominee for the Republican Party at its convention in Florida. Science and research will likely not appear on the agenda, as Romney, expected Vice Presidential candidate Paul Ryan, and others will instead focus on topics like reducing federal spending. It’s unfortunate that research will not be a part of the conversation, as new predictions coming out this week indicate that if Romney and Ryan win the election in November, changes could be coming for health research and efforts to develop much-needed new tools for global health. As a Nature article this week points out, Ryan—in his current position as chair of the House Committee on Appropriations—has created a federal budget plan that would, according to the American Association for the Advancement of Science, cut spending on non-defense research and development (R&D) by five percent, or $3.2 billion, below President Obama’s fiscal year 2013 request. Over the long term, Ryan’s approach would reduce funding for R&D to “historically small sizes,” according to Nature. Equally concerning, Ryan’s approach to federally funded R&D could alter US government support for the later-stages of research to develop new health products, including clinical trials. While Ryan’s federal budget plan calls out support for basic research, it would reduce spending for projects deemed “best left to the private sector.” As Nature points out, some advocates “worry that this might include research such as clinical trials sponsored by the National Institutes of Health for therapies from which the drug industry would be unlikely to profit.” Global health R&D is an issue that Republicans and Democrats need to start talking about on the campaign trail. This is an issue that Republicans and Democrats alike need to address. Research to develop new vaccines, drugs, diagnostics, microbicides, and other tools for neglected diseases unquestionably falls under the category of products from which private industry is unlikely to profit. For this reason, the US government has long worked with other partners to bridge this gap. Indeed, global health R&D has historically been a bipartisan issue in Congress that also spans Republican and Democratic presidential administrations, making the US government the largest funder of global health research in the world. And no matter the party in power, the US government can do more to maximize its investments in global health R&D by increasing its support for the later stages of research, as more global health products are moving into the final stages. This makes any proposal to reduce US spending for clinical trials even more worrisome. It’s not just health advocates who want the candidates to talk about R&D issues. A new poll released this week by Research!America finds that voters want to hear about health research funding on the campaign trail. Ninety percent of voters said candidates should speak about medical research, in addition to issues such as tax reform and public education. It’s important that the candidates—from Obama and Vice President Biden to Romney and Ryan—start talking about these issues head-on. And no matter which party takes the White House in November, support for global health R&D must continue.

In this feature on Breakthroughs, we provide an update on what’s currently happening with global health in Congress and an outlook for future legislative activity. As Congress starts the August recess, there have been a few developments in the fiscal year (FY) 2013 appropriations process, and both House and Senate committees have completed debate on nearly every account. Additionally, both the Administration and Congress have intensified their discussions about the upcoming sequestration cuts, and Congress has proposed continuing resolution to keep the government running at least until March. Below, we provide an overview of recent activity. FY 2013 Appropriations In the past two weeks, the Senate appropriations committee approved its Department of Defense appropriations bill, funding the department at a level $5 billion below President Obama’s request. Language and funding was included in the bill to establish a Peer-Reviewed Medical Research Program, which will set research priorities across the defense department for certain conditions and diseases, including malaria, and the neglected tropical diseases dengue fever, and leishmaniasis. The program is funded at $50 million in the legislation. Additionally, another $50 million was allocated to the Joint Warfighter Medical Research Program, which would accelerate health research for solutions and treatments in projects that the defense department is already funding, including some priority diseases for global health. With the passage of this bill, the Senate appropriations committee completed its work on individual appropriations bills for the year. The only account it did not approve funding for was the Labor-HHS account, which includes funding for the National Institutes of Health and Centers for Disease Control and Prevention, both of which fund global health research programs. On the House side, the full House of Representatives passed its own legislation funding the Department of Defense, which its appropriations committee approved back in May. That legislation approves a funding level above the amount agreed to in last year’s Budget Control Act agreement. Eventually, the differences between the House and Senate versions of the defense legislation will have to be rectified to fund the department for FY 2013. FY 2013 Continuing Resolution It’s been clear for a few months that Congress would not complete FY 2013 appropriations before the next fiscal year begins. In an interesting turn of events, Congress has agreed that it will need a Continuing Resolution (CR) in order to keep the government running into October and beyond, and members have already agreed on the terms of the CR, which will provide $1.047 trillion in discretionary spending. This will prevent further budget debates leading up to the presidential election, and takes one item off of Congress’ to-do list for the post-election session in November and December. Congress will write the agreement during August, and will vote on the deal in September. Sequestration There are roughly 20 days left in the congressional calendar, given the election and upcoming recesses. When the Budget Control Act was passed, Congress was expected to develop a plan to reduce spending or face severe, automatic cuts starting January 2, 2013. As Congress has not been able to agree on an alternative and has very little time left to do so, in January these, roughly, 8.5 percent cuts will likely take place.However, since the CR will delay FY 2013 budget levels from actually being finalized until March, the rate of the cuts for the last part of the FY 2013 fiscal year (March 1-September 30) could be higher—possibly as high as 14 percent. This scenario is still months away, and is dependent on several factors, including an election that could change the Presidential administration and the leadership in Congress. A deal could still be reached that would delay or eliminate sequestration, although there is very little time left to do so. New OMB Guidance Office of Management and Budget (OMB) Acting Director Jeffrey Zients recently sent a memo to department and agency heads with guidance on federal agency submissions for FY 2014. In the memo, Zients asked agencies to cut their bottom-line FY 2014 requests by 5 percent below spending levels appropriated for FY 2013. Zients sent another memo on July 31, informing agency leads of upcoming discussions on the implications of sequestration. Under current law, agencies are restricted in how much they can plan ahead of time for sequestrations. However, without an agreement from Congress on an alternative to the cuts, and with Congress’ insistence, the Administration has started to take steps to plan for the cuts.

George Fistonich is a recent graduate of the University of Southern California with a Master of Public Health degree, and currently serves as a research and policy fellow at amfAR, The Foundation for AIDS Research. He wrote this guest post about a new amfAR analysis that details the human impact of possible federal budget cuts on global health programs. amfAR recently released a new analysis that outlines the potential effects of budget sequestration on global health programs, using updated figures to reflect recent and accurate estimates. As our analysis illustrates, cutting funding for global health programs—including those that support access to lifesaving HIV and AIDS, tuberculosis (TB), and malaria tools and programs that fund research for the next generation of global health products—would barely make a dent in reducing the US federal deficit. However, cuts to global health and health research programs would have a crippling impact on people around the world. “Sequestration” is a fiscal process by which automatic, indiscriminate, across-the-board cuts would be made to most budget line-items at a certain set percentage. This process was included as a provision in the Budget Control Act of 2011, which would trigger sequestration at the start of the 113th Congress in January, unless Congress is able to pass $1.2 trillion in deficit reductions by the end of this year. The Center on Budget and Policy Priorities estimates that sequestration would lead to an 8.4 percent reduction in funding for non-entitlement federal programs, including all global health and health research and development programs. Under the rules of sequestration, a total of $109.4 billion would be cut for fiscal year 2013, of which nearly $690 million would be taken from global health programs. This cut to global health represents a negligible 0.6 percent of the total deficit reductions for that year, but would lead to devastating human impact worldwide. Secretary of State Hillary Clinton and President Obama both set an ambitious goal last year by announcing the United States’ intent to create an AIDS-free generation. Sequestration would not only undermine this achievable goal, but would undermine the progress we have made so far in providing treatment and care for millions of people worldwide, restrict funding for groundbreaking AIDS research, and ultimately result in thousands of unnecessary deaths in the next year alone. amfAR’s analysis estimates that an 8.4 percent cut to bilateral funding through the President’s Emergency Plan for AIDS Relief (PEPFAR), the President’s Malaria Initiative (PMI), and TB programs would lead to the following in 2013: 273,000 fewer people receiving AIDS treatment. 62,000 more AIDS-related deaths. 122,500 more children becoming orphans. 111,000 fewer HIV-positive pregnant women receiving services to prevent mother-to-child transmission. 21,000 more infants being infected with HIV. 354,000 fewer children receiving food, education, and livelihood assistance. 2.2 million fewer insecticide-treated nets procured. 3.7 million fewer people receiving malaria treatment. 6,000 more malaria-related deaths. 65,000 fewer people receiving TB treatment. 8,000 more TB-related deaths. Sequestration would also lead to the following in 2013 alone due to cuts in multilateral investments: 1.2 million fewer pentavalent vaccines procured through the GAVI Alliance, leading to 13,000 child deaths due to diphtheria, tetanus, pertussis, Haemophilus influenza type B, and hepatitis B. 2.8 million fewer insecticide-treated nets procured; 7,500 more malaria deaths; 102,000 fewer people receiving TB treatment; 12,000 more TB deaths; and 114,000 fewer people receiving AIDS treatment through the Global Fund to Fight AIDS, Tuberculosis, and Malaria. Sequestration would not only limit access to currently available treatment and prevention tools, leading to an increase in HIV and AIDS, TB, malaria, and childhood deaths—it would also hinder research into new tools that are critically needed to fight these diseases. Cutting these programs would do nothing to reduce the federal deficit, and Congress must therefore work to prevent sequestration and protect funding for global health and research and development. Full text of the analysis, including methods for determining these estimates, can be found here.

In this feature on Breakthroughs, we provide an update on what’s currently happening with global health in Congress and an outlook for future legislative activity. Following the August recess and Labor Day Holiday, Congress is now back for a very brief time before it takes another break to focus intensely on campaigning ahead of the November elections. We don’t expect much action on legislation specific to global health or research programs. Instead, Congress will focus on passing a Continuing Resolution (CR) for fiscal year 2013 in order to keep the government running through the end of March 2013, as members juggle the remaining legislative tasks on their plate. The CR actually includes a tiny 0.6 percent increase across the board for all federal programs, including those that fund global health research. However, the resolution will expire long after the looming budget sequestration goes into effect in January 2013 and will also run into the fiscal year 2014 budget process, effectively creating a budgeting perfect storm. Advocates for a wide range of federal programs are in high gear to convince Congress to delay sequestration or to pass a balanced budget in its place. Some of those advocates have found congressional allies willing to take on their cause. Also this week, we’re looking for a report from the Obama Administration on the potential impact of sequestration on federal agencies. As we outlined in our last update, sequestration could result in cuts ranging from 8.5 percent to 14 percent to most federal programs, depending on the outcome of the budget negotiations in Congress and the November elections. Sequestration would undoubtedly have a significant impact on global health and research programs at agencies like the Centers for Disease Control and Prevention, the Department of Defense, the US Food and Drug Administration, the National Institutes of Health, and the US Agency for International Development. We’re eager to see this report and learn more about how sequestration might impact efforts supported by these agencies to develop new lifesaving global health tools. Global health research and development (R&D) programs span the breadth of the US budget. Congress needs to work to protect these essential R&D programs from disproportionate cuts and ensure that funding is sustained—and increased if possible—for the coming years. Although the elections may be on the top of everyone’s to-do list for now, temporary budget fixes that leave these activities vulnerable to indiscriminate cuts and similar actions will not work forever. We need a plan that protects global health R&D and other key programs for the long-term, and right now, that job starts with Congress.