Federal Investment in Research

While JDRF plays a significant role in the effort to cure, treat, and prevent type 1 diabetes (T1D), investment in research from the federal government is essential to meeting these core objectives.  JDRF continues to monitor and advocate for strong federal funding for the National Institutes of Health (NIH) and the U.S. Food and Drug Administration (FDA).  These agencies maintain significant influence on the advancement of core diabetes research and therapies.

  • The National Institutes of Health (NIH) is the government agency that administers federal funding for medical research across the country and around the world.  Within NIH, the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK) is the lead institute for coordinating and conducting research to cure, treat, and prevent T1D and its complications.  In addition to administering the Special Diabetes Program (SDP) funds, NIDDK (and other institutes within NIH) awards grants on a competitive basis with funding the NIH receives from Congress annually through the appropriations process.  On April 26, 2013 a sign-on letter was circulated by Senators Casey (D-PA) and Burr (R-NC) to the Senate Appropriations Committee, calling for maintaining a strong commitment to medical research funding at NIH.  JDRF volunteers took action and 52 Senators signed on to the bipartisan final letter, asking for strong NIH funding in FY14.
  • The Food and Drug Administration (FDA) is tasked with assuring the safety, efficacy, and security of drugs, biologics, and medical devices, including Artificial Pancreas technology, and other new diabetes therapies.  JDRF and the T1D community have a vested interest in the actions of the FDA and its funding levels as new treatments will require FDA review and approval before becoming available.

 

Background on the Budget Process

Federal investment in research is determined by annual funding for federal agencies, known as ‘appropriations,’ through a series of negotiations between the President and the Congress.

  • Typically, in early February, the President delivers the Administration’s budget proposal to Congress outlining spending priorities for the next fiscal year, October 1-September 30.
  • By April, the House and Senate propose their own budget resolutions and then determine annual discretionary spending accordingly (known as ‘appropriating’).
  • By August, 12 appropriations bills should be passed by Congress, signed into law by the President.
  • If a formal appropriations bill not been signed into law by the end of the Congressional fiscal year (September 30th), Congress will often pass a Continuing Resolution (CR), a type of appropriations bill to fund existing federal programs at previously funded levels, and the President signs it. A CR extends until a specific date or until regular appropriations bills are passed, whichever comes first.

 

Budget Cuts and Sequestration

Over the past year, the term ‘sequestration,’ which refers to across the board cuts in federal spending, has been discussed in the context of an effort to control federal spending and address deficit reduction.  It was approved by Congress in the Budget Control Act (BCA) during the summer of 2011 after a ‘Super Committee’ of Members were not able to agree on at least $1.2 trillion in spending cuts over a 10-year period, by January 1, 2013.  Under the BCA, NIH and the FDA, along would the SDP, would see cuts.

In response to possible cuts, Congress delayed sequestration until March 1, 2013 as part of the American Taxpayer Relief Act of 2012.  That legislation, known as the fiscal cliff agreement, included a one-year renewal of the SDP through September 2014.

Starting on March 1, 2013, sequestration went into effect impacting FY 2013 budgets, including:

  • $30.899 billion for the NIH, $1.545 billion cut (5 percent).
  • $2.521 billion for the FDA, $126 million cut (5 percent).
  • $142 million for the SDP, $8 million cut (5.1 percent because it is mandatory program).

In December 2013, House and Senate Budget leaders came up with a budget deal known as the Bipartisan Budget Act of 2013 that set spending targets for FY 2014 and FY 2015 and restored some sequester cuts.  For FY 2014, this would mean a rollback of about half the cuts, split between non-defense (like the NIH and the FDA) and defense.  Rollbacks for FY 2015 are about 75 percent of the spending reduction required under sequestration.

In January 2014, Congress passed the Consolidated Appropriations Act of 2014 (Omnibus):

  • $29.926 billion for the NIH, $1 billion (3.5 percent increase) over the FY 2013 budget after sequestration (still $717 million less than FY 2013).
  • $4.34 billion total for the FDA, which includes $2.55 billion budget for the agency, a boost of $91 million above FY 2013, and $1.79 billion in user fees paid by industry that were sequestered previously.
  • $139 million for the SDP, $11 million cut (7.2 percent).

JDRF continues to monitor developments on budget sequestration and participates as part of several broad coalitions to support the highest funding levels possible for the NIH and the FDA.  In particular, JDRF serves as a member of the Ad Hoc Group for Medical Research, a coalition of over 500 patient and health advocacy organizations and research institutions, which advocates for increased funding for the NIH.  JDRF is also part of the Alliance for a Stronger FDA, which unites a broad group of patient groups, consumer advocates, biomedical research advocates, health professionals, and industry to increase appropriations for the FDA.  JDRF will also continue to advocate for the advancement of T1D research, treatments, and therapies at these agencies.

 

Fiscal Year 2015 Budget and Appropriations Process

The President’s budget is the formal start of the budget process.  Because of the late action on the Bipartisan Budget Act of 2013 that set overall spending targets for FY 2014 and FY 2015, and the Consolidated Appropriations Act of 2014, which funded the NIH and the FDA for FY 2014, Obama’s FY 2015 budget was released on March 4.   When it is delayed, other budget decisions for the next fiscal year, which starts on October 1, are delayed as well.  The President’s FY 2015 budget includes:

  • $30.4 billion for the NIH, $211 million (0.7 increase) over FY 2014
  • $4.7 billion for the FDA, which includes a boost of $358 million (8 percent increase) above FY 2014 – providing $2.6 billion budget for the agency and $2.1 billion in user fees paid by industry.

Typically, after a budget has been proposed, the House and Senate devise budget resolutions to set spending targets for the appropriations process.  Because the Bipartisan Budget Act of 2013 set overall spending targets for FY 2015, it is possible that the House and Senate Appropriations Committees will use those targets and start moving appropriations legislation with discretionary spending levels for federal agencies like NIH and the FDA before the beginning of the fiscal year, October 1, 2014.

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