Although we’re several days into sequestration, details about the full impact of funding cuts are still hazy. On Friday, the Office of Management and Budget (OMB) released a report to Congress, which details funding cuts required to offset $85 billion in the fiscal year (FY) 2013 budget. In order to reach this goal, the OMB report indicates that global health research and development (R&D) programs will be subjected to cuts of either 5 percent or 7.8 percent. But because the cuts must take place over a seven month period (instead of a full year) to fit within the fiscal year, OMB calculates that these cuts could actually be at a rate of 9 percent and 13 percent with the remaining funding for this year.
OMB’s report provides some specific details on how the cuts are calculated. It also provides illustrative examples of what the sequestration cuts might look like if applied equally within federal agency budgets. However, because agency heads will have discretion over how specific cuts affect their agencies, the exact implications of sequestration will be determined in the coming weeks.
While waiting for these details to come out, we are starting to see some estimates emerge regarding the impact of sequestration on the agencies that support global health R&D. For example:
- The National Institutes of Health’s discretionary budget will be reduced from $30,899,000 to $29,321,000 for FY13, a cut of over $1.5 billion.
- The sequester would equate to a $2.6 billion reduction to the State Department and US Agency for International Development (USAID) FY13 budget, translating to a $1.7 billion cut to foreign assistance programs. In particular, sequestration will cut over $400 million from global health initiatives at the State Department and USAID, including R&D initiatives.
- Global health programs at the Centers for Disease Control and Prevention are likely to be reduced by taking 5 percent from HIV/AIDS initiatives and then taking 5 percent from the remainder of the account.
- Discretionary spending for the Department of Defense (DoD) is subject to a 7.8 percent reduction, which would include any global health R&D initiatives embedded in DoD programs.
- Some reports indicate that the US Food and Drug Administration will lose about 9 percent of its budget for FY13. The Obama Administration is urging Congress to allow the agency to spend $41 billion-worth of user fees.
In the meantime, the government is currently running on a Continuing Resolution, which expires on March 27. Congressional leaders and President Obama have expressed hopes about successfully negotiating a new spending bill by March 27, in order to avoid a government shut-down. These negotiations may also provide an opportunity to reverse the sequester, before the full impact of the cuts are felt across the government. The President’s budget request for FY14 is also on the horizon, with reports indicating that it might be released on March 25. The House and Senate will begin to take up FY14 budget resolutions, which each Chamber must pass by April 15.
It’s becoming increasingly clear that sequestration is the wrong way to reduce the nation’s debt, especially when the impact would set back innovation and devastate global public health. Policymakers should use the upcoming budget negotiations as an opportunity to reverse sequestration and develop a long-term budget solution that protects and—where possible—increases funding for global health product development. Slashing funding will interrupt scientific progress and leave us without the urgent tools we need to address health needs now and in the future.
Kim Lufkin is the GHTC’s communications officer.