Senate Appropriators Echo House Concerns about the FY2017 Budget Request’s Reliance on Mandatory Funding; Senator Alexander Proposes a “Path Forward”

Legislative Update
March 4, 2016

On March 3, Health and Human Services (HHS) Secretary Sylvia Burwell testified before the Senate Labor, Health and Human Services, and Education (LHHS) Appropriations Subcommittee about the President’s Fiscal Year (FY) 2017 budget request for her Department, which was submitted to Congress on February 9. As in the February 25 hearing at which she testified before the House Subcommittee, a major issue was the budget’s reliance on mandatory funding, especially the $33.1 billion National Institutes of Health (NIH) budget that includes mandatory funding of $1.825 billion, reflecting $1 billion of that which was previously discretionary funding—essentially supplanting the discretionary base—and $825 million for new and existing trans-NIH initiatives, including the National Cancer Moonshot, Precision Medicine Initiative PMI), and the Brain Research through Advancing Innovative Neurotechnologies (BRAIN) Initiative.

LHHS Subcommittee Chairman Roy Blunt (R-MO)

In his opening statement, Subcommittee Chairman Roy Blunt (R-MO) said:

“This is a precarious submission for the Department. The request leans heavily on new, mandatory spending proposals to bypass current budget caps. It cuts almost $2 billion for programs currently funded by discretionary spending in the LHHS bill, and expects new, unauthorized mandatory funding to fill those holes…. If this Subcommittee accepted the Department’s request, this would mean a $1 billion cut to the NIH.”

Full Appropriations Committee Chair Thad Cochran (R-MS) joined Chairman Blunt in expressing these concerns, as did a number of their Republican colleagues.

LHHS Subcommittee Ranking Member Patty Murray (D-WA)

In her opening statement, Subcommittee Ranking Member Patty Murray (D-WA) said:

“There is a lot to like in the bill which builds upon funding that was made possible through the budget framework in the Bipartisan Budget Act of 2015. We need to build on last year’s accomplishments by working together to handle the challenges that the request identifies. The Subcommittee needs an allocation that enables it to address these problems.”

Full Appropriations Committee Vice Chair Barbara Mikulski (D-MD) stated, “Like the Chair, I am concerned about the mandatory funding and what could get cut.”

Secretary Burwell defended the President’s request, stating that the mandatory funding is already paid for through the budget’s proposed cuts and revenue increases.

Chairman Blunt recognized past efforts by Democratic colleague and Subcommittee member Richard Durbin (D-IL) regarding predictable and sustained NIH funding increases: “If the funding goal was five percent real growth plus biomedical inflation, it would get us to where we need to be at NIH, per Senator Durbin. We did that last year and, if you want to develop a pattern, then the second year is not the time for a potential cut. FY2017 funding should be five percent plus biomedical inflation.”

Senator Lamar Alexander (R-TN)

Senator Lamar Alexander (R-TN), who chairs the Senate Health, Education, Labor and Pensions Committee, on which Senator Murray also serves as Ranking Member, described the President’s budget request as “throwing a curve,” as it includes lower discretionary levels for the NIH after the Senate leadership worked to increase its discretionary funding in FY2016 appropriations by $2 billion. He offered a “path forward” that would provide bipartisan support for mandatory funding for key NIH initiatives (PMI, BI, Cancer Moonshot and early-stage investigators) while continuing to grow its discretionary base, that is, supplemental mandatory funding as a “surge” with a defined timeframe and amount to address the initiatives. Recognizing his Committee’s work on a series of fifty proposals included in the Senate Biomedical Innovation bill—a companion to the House’s 21st Century Cures Act passed in June 2015, which NAEVR supported—he proposes that:

• With bipartisan support, the Senate approves the fifty proposals, while also developing consensus on the mandatory “surge” funding for key NIH initiatives, with a defined timeframe and funding amount.
• The Senate would work with House colleagues to conference a bill that could pass and be signed by the President.

In a February 10 statement on the President’s budget request, NAEVR expressed its disappointment in its use of mandatory funding to supplant the discretionary base, especially at it relates to most of the Institutes and Centers (I/Cs) which are flat-funded, including the National Eye Institute (NEI). The President requests NEI funding at $708 million—the same as its FY2016 operating budget, which was reduced from its enacted level of $715.9 million due to pass-throughs. The flat-funding relies, however, on mandatory funding—without it, I/Cs would be funded at the level proposed in the President’s FY2016 budget request. For NEI, that would be $687 million. The budget proposal essentially reduces the discretionary funding base for I/Cs.

In FY2016, the NEI budget finally had minimal growth (0.8 percent) above its FY2012 funding level for the first time in four years after the devastating impact of the $36 million sequester cut in FY2013. That trend to rebuild the NEI budget must continue through an increase in the appropriated base for the Institute. As a result, NAEVR is urging Congress to appropriate at least $34.5 billion for NIH and $770 million for the NEI in FY2017, a 7.5 percent increase over FY2016 for each that reflects five percent real growth above the projected 2.5 percent rate of biomedical inflation.