President’s February 9th Release of the Fiscal Year (FY) 2017 Proposed Budget

President Issues FY2017 Budget Request with NIH Increase, NEI Flat-Funded

Legislative Update
February 9, 2016

NIH Director Francis Collins, M.D., Ph.D.
NIH Director Francis Collins, M.D., Ph.D.
said that, “Because of very little difference between the FY2017 and FY2016 spending caps, the budget process needs to be creative. But there is wide enthusiasm in Congress to put NIH on a pathway of predictable and sustainable growth.”

On February 9, the President sent a $4.1 trillion Fiscal Year (FY) 2017 spending plan to Congress. It requests National Institutes of Health (NIH) funding of $33.1 billion, an $825 million or 2.6 percent increase over FY2016. The budget request 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 [see below].

The President’s proposal would fund the National Eye Institute (NEI) 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 President proposes to flat-fund all of the Institutes and Centers (I/C) at their FY2016 operating budget levels, except for the National Cancer Institute (NCI) and the Office of the Director (OD) due to new initiatives [see below]. The flat-funding relies, however, on mandatory funding—without it, the 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 the ICs.

The new and enhanced trans-NIH initiatives include:

The latter two initiatives account for the $145 million OD funding increase.

NIH states that Research Project Grants (RPGs) remain a high priority. NIH estimates that it will support 10,753 new and competing grants in FY2016—the largest amount since FY2003. In FY2017, NIH estimates that it will support 9,946 new and competing RPGs in FY2017, a decrease of 807 from the FY2016 estimate, and 24,608 noncompeting RPGs, an increase of 1,241 from the FY2016 estimate. These levels reflect the impact of a large increase (more than 1,200) in new and competing RPGs in FY2016—those grants become noncompeting in FY2017. The average cost of new and competing RPGs, approximately $469,000, is essentially the same as the FY2016 estimate.

Per NEI’s Congressional Justification, it will support a total of 1,119 RPGs in FY2017. Noncompeting RPGs will increase by 30 awards and $9.7 million, while competing RPGs will decrease by 35 awards and $13.5 million.

Since the President’s FY2017 budget supplants discretionary funding with mandatory funding, it will face intense Congressional scrutiny, especially since the mandatory funding needs to be offset by “pay-fors.” Additionally, since the House-passed 21st Century Cures Act includes $1.75 billion over five years of mandatory funding for a new NIH Innovation Fund to address priorities that include support for early-stage investigators [and the Senate Health, Education, Labor , and Pensions (HELP) Committee is currently developing its own versions of the bill that could include mandatory funding], the Congressional authorizers and appropriators must determine whether mandatory funding is approved at all and, if so, identify priorities.

NAEVR is disappointed in the President’s use of mandatory funding to supplant the discretionary base, especially at it relates to the I/Cs, including the NEI. 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.