Legislative Updates


Congressional Budget Office Issues its Analysis of the President's FY2005 Budget

Legislative Update
March 1, 2004

Late last week, the Congressional Budget Office (CBO) issued its analysis of the President's Fiscal Year (FY) 2005 budget proposal. CBO estimates that, in the President's budget, the deficit would increase by $737 billion beyond CBO's January projections, amounting to $2.75 trillion between FY2005-2014. This would be a 67% increase on top of the existing $4.1 trillion deficit.

Although CBO notes that the President's budget would reduce the deficit from $478 billion in the FY2004 budget to $252 billion in the FY2008 budget, it would still fall short of the 5-year goal of reducing the deficits by half (e.g. $239 billion by FY2009). It is primarily the out-years of FY2010 to FY2014 in which CBO notes greater deficit growth, based on current assumptions about economic growth. CBO has also noted that the estimates do not include defense expenditures associated with Iraq and Afghanistan, which are not budgeted beyond this year.

CBO has also scored the President's FY2005 budget discretionary spending total at $822.7 billion, which is a slight increase over the Office of Management and Budget's (OMB) estimate of $818.4 billion. Although the Budget Committees have not arrived at a specific target number, there has been discussion of a discretionary spending budget cap of $814 billion?and even discussion about potential cuts in defense/homeland security to make up the difference. No decisions have yet been made, however.

With the issuance of the CBO's analysis, the House and Senate Budget Committees will be working this week to arrive at a draft resolution. In this process, the Republican leadership must address differences between the conservative Republican Study Group, which is calling for discretionary spending cuts to speed deficit reduction, and the more moderate Tuesday Group's recognition of the need to adequately fund domestic programs, such as education and health care.

This week, the Function 550 Coalition will be releasing an advocacy campaign calling for a 12% increase in Public Health Service spending in FY2005 (including NIH). NAEVR is a supporter of this effort, which can be found at http://www.aamc.org/advocacy/healthfunding/fundpublichealth.htm . The FY2005 budget proposal is calling for a 2.6% increase for the NIH, as well as a 2.9% increase for the NEI (or $19 million dollars, increasing the NEI budget from $653 million in FY2004 to $672 million in FY2005.)

NAEVR, on behalf of the eye and vision research community, has been steadfast in advocating for $711 million for the NEI in FY2005 (an 8% increase, as compared to the budget proposal's increase of 2.9%), which would reflect a doubling of the NEI budget since FY1998 and bring it into parity with the budget-doubling that occurred at the NIH and many Institutes between FY1998 and FY2003. With its FY2004 programmatic budget of $653 million, the NEI is still only at 1.84 times its FY1998 budget of $355 million, or 91.9% of its budget-doubling goal of $711 million. Click here to access NAEVR's position paper.

Although the budget challenges that Congress and the Administration face are significant, NAEVR contends that adequately spending now for eye and vision research is cost-effective, since it can save and ultimately prevent costs to the Medicare and Medicaid programs.