Breakthroughs Blog: US budget

  “I’d be careful not to break something that would be hard to put back together,” Alan Magill—director of Malaria at the Bill & Melinda Gates Foundation—said this week at the GHTC’s annual congressional briefing. Sequestration, just days away, was a primary concern for Magill and others at the event, which focused on how US policymakers can protect the nation’s investments in global health research in upcoming budget discussions. As Magill and others stressed, sequestration and federal budget cuts would severely hamper research taking place across the US government to develop new vaccines, drugs, and other tools for global public health. According to moderator Lisa Cohen, executive director of the Washington Global Health Alliance, more than 350 health innovations are in the research pipeline. She added that 200 of these are supported by the US government through agencies such as the Centers for Disease Control and Prevention (CDC), the Department of Defense (DoD), the US Food and Drug Administration (FDA), the National Institutes of Health (NIH), and the US Agency for International Development (USAID). (from right to left) Lee Hall from the National Institute of Allergy and Infectious Diseases, Caroline Ryan from the President's Emergency Plan for AIDS Relief, and Alan Magill from the Bill & Melinda Gates Foundation. Photo credit: PATH. Widespread budget cuts would stop scientific progress in its tracks—progress that cannot be seamlessly picked up again if funding were to resume in the future. “Many biomedical studies cannot survive cuts in funding in the middle of their work. It would be an irreversible mistake to halt these ongoing global health research efforts,” Cohen said, adding, “Halting funding would mean that the world may never benefit from these tools that are so close to development and delivery.” As the panelists stressed, there are several compelling humanitarian reasons to protect US investments in global health research. “Scientific advancements have brought us to a tipping point in the fight against HIV and AIDS,” Caroline Ryan, deputy coordinator for Technical Leadership at the President’s Emergency Plan for AIDS Relief (PEPFAR) said. She added that “science has set us on a new path—a path to achieving an HIV-free generation.” Lee Hall, chief of the Parasitology and International Programs Branch at the National Institute of Allergy and Infectious Diseases, said that the NIH is supporting research for an array of new, lifesaving health tools—including drugs, diagnostics, and vaccines for malaria, Chagas disease, and tuberculosis. “We’re standing at a very promising moment,” Hall said. “Looking at what’s on the horizon, it’s clear that a lot will come out of our support for global health research. We need new tools if we are to realize the benefits of US support for global health.” Speakers also emphasized that there are countless domestic benefits that come with US investments in global health research. “We live in a globalized world, whether we like it or not,” Magill said. “This presents us with the choice to exert America’s leadership role and shape the world how we’d like to see it—or let someone else do it for us.” Magill added that with the ease and speed of airline travel, “what’s happening in the middle of Africa today could be happening at Dulles tomorrow.” Hall also highlighted that many areas in the United States are vulnerable to tropical infections, and that diseases like Chagas are appearing throughout some Southwestern states. Lee Hall (left) and Alan Magill (right) at the GHTC's annual congressional briefing. Throughout the event, all three panelists underscored the importance of partnerships to advancing research and science for new health tools. According to Ryan, PEPFAR “gets more bang for our buck” by working in partnerships with other US agencies, such as the NIH and FDA, as well as philanthropic groups like the Gates Foundation. As an example, Ryan cited that PEPFAR and USAID are supporting the development of microbicides with a research infrastructure established by the NIH. Hall also cited NIH’s numerous partnerships with US academic institutions, nonprofit groups, and other federal agencies like the CDC and DoD. Magill stressed that from the Gates Foundation’s perspective, the US government is a critical partner in global health. “The Bill & Melinda Gates Foundation can only provide a small fraction of what the US can bring to the table,” he said, adding that investments in global health research should not only be seen as humanitarian aid—they are investments in science that provide “a lot bang for a little buck. We should save programs that are investments in the future.”

We have long known that Washington is operating under a remarkably unorthodox budgetary process. Sequestration threatens to reduce funding for most federal programs by at least five percent. More than halfway through the current fiscal year, policymakers still haven’t completed work on the 2013 budget. They will likely be finishing budget negotiations for this year as they start the process all over again for 2014. These tense and uncertain budgetary circumstances in Washington are placing enormous constraints on research and development (R&D) efforts to develop new and improved vaccines, drugs, and other tools for global public health. In the midst of these critical federal budget decisions, the Global Health Technologies Coalition (GHTC) is releasing our fourth annual policy report. We believe that sequestration and the federal budget present the United States with the opportunity to take two decidedly different paths. Policymakers can renew the nation’s longstanding role as a leader in supporting global health R&D by preventing sequestration and protecting research funding in the federal budget. Alternatively, policymakers can place this leadership role at risk by allowing sequestration to take place and reducing investments in global health R&D in the federal budget. The fourth annual GHTC policy report provides actionable steps that US policymakers can take to protect global health R&D in the upcoming budget negotiations. Congress and the Obama administration are not in an enviable position—they are facing incredibly challenging decisions regarding the budget. They must set priorities for the country and provide funding for them. In these times of fiscal constraint, policymakers need to be even more discerning and invest in essential activities that not only save lives and improve health worldwide, but also provide jobs and reap other rewards at home. Our policy report proves that global health R&D unquestionably meets all of these goals. Previous US investments in research to develop new vaccines, drugs, diagnostics, microbicides, devices, insecticides, and other tools have led to some of the greatest advances in global health to date, saving countless lives and resulting in billions of dollars in cost savings. With increased investment and support from the US government, further gains are within reach for HIV and AIDS, malaria, tuberculosis, neglected tropical diseases, maternal and reproductive health, and childhood survival. Global health research also drives US job creation and economic growth, while protecting the health of American citizens who are increasingly at risk of global infectious diseases. For instance, there are an estimated five million impoverished Americans who live with neglected tropical diseases, including a previously hidden burden of neglected diseases among the poor in the southern United States. Supporting research to develop new vaccines and drugs will help fight these diseases both at home and abroad. Our report provides actionable steps that Congress and the administration can take to protect global health R&D in the upcoming budget negotiations. The report also provides clear recommendationsfor how the US government can increasingly coordinate its global health research activities—which stretch across multiple agencies, branches, and departments—around a cohesive strategy. In the coming months, policymakers have the opportunity to set a course for renewal by ensuring that the nation’s fiscal policies and international development programs support research and innovation for global health. The reasons are clear, and there is too much to lose by pulling back now. The GHTC’s fourth annual policy report can be found online. The report will be released today at a Capitol Hill briefing.  

During last week’s State of the Union address, President Obama called on policymakers to find a solution to the federal budget debate before sequestration—or widespread and indiscriminate cuts to all federal programs—takes place next month. “These sudden, harsh, arbitrary cuts would jeopardize our military readiness. They’d devastate priorities like education, and energy, and medical research,” he said, adding, “They would certainly slow our recovery, and cost us hundreds of thousands of jobs. That’s why Democrats, Republicans, business leaders, and economists have already said that these cuts, known here in Washington as the sequester, are a really bad idea.” The GHTC and others in the global health and research communities have long stressed the importance of preventing sequestration in order to stop the devastating cuts it would have on US programs that—among other lifesaving activities—are helping to develop and deliver innovative vaccines, drugs, diagnostics, and other tools to benefit global public health. US policymakers must prevent sequestration in order to stop the devastating cuts it would have on US programs that—among other lifesaving activities—are helping to develop and deliver innovative vaccines, drugs, diagnostics, and other tools to benefit global public health. Photo credit: PATH Sequestration would not only hinder efforts to save lives and improve health around the world. As President Obama emphasized last week, US investments in research also contribute to a wide range of domestic benefits—such as job creation and economic growth—that would be diminished by sequestration. “Now is not the time to gut these job-creating investments in science and innovation,” Obama said during his address. “Now is the time to reach a level of research and development not seen since the height of the Space Race. We need to make those investments.” Also last week, several federal agencies released new details about the impact of sequestration on their budgets and programs. For instance, in a letter to Senate Appropriations Chair Barbara Mikulski (D-MD), Health and Human Services (HHS) Secretary Kathleen Sebelius outlined the harmful effects of sequestration on agencies within HHS that “protect the health and enhance the well-being of all Americans.” As just one example, medical research at the National Institutes of Health (NIH)—the largest supporter of global health research in the world—would be severely hindered by sequestration. Cuts to the NIH would delay progress on the treatment and prevention of debilitating conditions that affect people both at home and abroad. “In general, NIH grant funding within states … will likely be reduced due to both reductions to existing grants and fewer new grants,” Sebelius wrote. “We expect that some existing research projects could be difficult to pursue at reduced levels and some new research could be postponed as NIH would make hundreds fewer awards. … With each research award supporting up to seven research positions, several thousand research positions across the nation could be eliminated.” Congress also came out with its own estimates on the level of federal budget cuts that would result from sequestration. Democratic members of the House Appropriations Committee released a report that finds sequestration would have far-reaching consequences for domestic growth and employment. Sequestration could slow US economic growth by half in 2013 and cut more than 2.14 million domestic jobs. Additionally, the report outlines the potential effects of sequestration on agencies that fund global health and research programs. “A sequester would force cuts to global health and development funding of over $432 million, severely hindering the United States government from taking advantage of opportunities to dramatically change the face of disease and, in some cases, permanently reduce suffering,” the report claims. It adds that sequestration would cut the US Agency for International Development’s (USAID) global health budget by $139 million. Cuts to USAID’s global health programs would hinder progress in the development of game-changing new technologies, such as research to develop an HIV and AIDS vaccine. The report also finds that the Centers for Disease Control and Prevention and the Food and Drug Administration would be cut by $350 million and $120 million, respectively. The NIH would be cut by $1.6 billion under sequestration. Last week saw a chorus of voices from across the US government, demanding that policymakers do everything they can to ensure that sequestration does not take place. Such widespread cuts would severely hinder US programs that are finding more effective tools to prevent and treat disease worldwide. These programs are also creating jobs and spurring the economy at home. It’s critical that policymakers come up with a federal budget plan that not only prevents sequestration, but also protects US investments in global health research and other successful programs.

Going into December 2012, Congress had neither completed its work on the federal budget for fiscal year (FY) 2013 nor decided how to avoid sequestration—widespread and indiscriminate cuts to all federal programs. On January 1, just before sequestration was scheduled to take place, a deal was finally reached between the White House and Congress. However, instead of approving a long-term balanced solution, policymakers have transferred and delayed sequestration only temporarily. Below, we provide a summary of what the compromise means for the federal budget, and what might happen to global health and international development programs. Sequestration Just after the New Year, President Obama signed into law and Congress enacted the American Taxpayer Relief Act (ATRA). The legislation delays sequestration for over two months. It also reduces the level of the total cuts that would occur under sequestration from $109 billion to $85 billion. The new ‘fiscal cliff’ date is March 27, which is when the new FY2013 sequester is now scheduled to occur. Not coincidentally, that is the same day that the FY2012 continuing resolution, now funding the government, expires. And it will also be about a month after the United States will reach its debt ceiling. Negotiations on raising the debt ceiling will no doubt be tied to the debate over a long-term budget plan to avoid further sequestration cuts. For now, we don’t know exactly what the impact of the new sequestration would be on global health research and development programs. Assuming that all programs are cut proportionately, most global health and research programs would likely be cut by 5.9 percent in fiscal year 2013. The fiscal cliff deal instructs the Administration to release a report on sequestration on March 1, before the cuts occur. For now, we don’t know exactly what the impact of the new sequestration—which is looking more and more likely—would be on global health research and development (R&D) programs for FY2013. Assuming that all programs are cut proportionately, most global health and R&D programs would likely be cut by 5.9 percent in FY2013 (instead of the previous value of 8.2 percent). As an example, global health programs at the State Department and US Agency for International Development (USAID) would see an estimated cut of $482 million, and the overall National Institutes of Health (NIH) budget could be cut by an estimated $1.8 billion. During the discussions in March, it’s possible that Congress will make any number of decisions regarding the budget and sequestration—including constructing a long-term budget deal that nullifies sequestration, or delays it yet again. Given the lack of transparency around the budget negotiations, any attempt to quantify the impact on agencies and programs is just speculation at this point. FY2013 & FY2014 The difference between the old sequestration level and the new one is paid for through changes in retirement savings and tax laws, as well as a reduction in the federal budget caps for FY2013 and FY2014. FY2013’s budget cap is now $4 billion lower than it was two weeks ago. Therefore, if Congress creates a new spending package for the rest of FY2013 in March, a total of $4 billion will need to be cut from the total federal budget. This would translate to roughly a 0.4 percent cut across global health programs—if the cuts are distributed proportionately. However, Congress also has the option to extend the continuing resolution FY2013 through the rest of the fiscal year, which would result in cuts higher than 0.4 percent. During December 2012, congressional appropriations staff did agree on most of the FY2013 appropriations legislation. It appears that funding for global health programs at USAID fared well, and could be as high as $8.4 billion. This compares with USAID’s funding level of $8.167 billion for FY2012. However, until Congress debates these issues in March, we won’t know for sure if that agreed level will stick. For other global health and R&D programs at NIH, the Centers for Disease Control and Prevention (CDC), and the US Food and Drug Administration (FDA), it’s less clear whether there has been agreement in Congress. The legislation that funds NIH, FDA and CDC, for example, is always one of the most contentious budget debates in Congress. Adding one more wrench to the usual appropriations process going forward, the Obama Administration needs more time to prepare its budget request for FY2014. While normally we would expect this in early February, it is more likely that this will be at least a month late, which could result in a contracted appropriations season. The sweeping, indiscriminate cuts that sequestration—both old and new—would entail will ultimately damage progress in global health R&D. As the March debates over the federal budget begin, Congress should find a way to get the appropriations process back on track and commit to a balanced, thoughtful, long-term plan that protects smart, effective, life-saving investments in global health R&D and other humanitarian programs.