2012-02-13

President Obama has released the details of his fiscal year (FY) 2013 budget proposal. While noting the importance of biomedical research to "improving the health of the American people as well as the economy," the President's proposed budget provides $30.7 billion for the National Institutes of Health (NIH), the same amount provided for NIH in the final FY 2012 budget passed by Congress in December. The budget estimates this will allow NIH to support a total of 35,888 research project grants, including 9,415 new and competing awards, in FY 2013. Additional details on proposed levels of funding for each of the individual Institutes and Centers at NIH will be released over the next several days.

The President's proposed budget also notes that "in 2013, NIH will implement new grants management policies to increase the number of new research grants awarded and continue to focus on resources for new investigators." To accomplish this, the proposed budget indicates that "NIH intends in FY 2013 to discontinue outyear inflationary allowances for competing and continuation grants; reduce non-competing continuation grants by one percent below the FY 2012 level, and negotiate the budgets of competing grants to avoid growth in the average award size. NIH will also continue the current policy to equalize success rates of new investigators to those of established investigators."

For public health initiatives, the President's proposal includes $5.068 billion in funding for the Centers for Disease Control and Prevention, a significant decrease from the $5.732 billion CDC received in FY 2012.

The budget proposal also includes language sharing the Administration's concern about the need to provide stability in payment rates for physicians who treat Medicare beneficiaries. Specifically, the President expresses his commitment to "working with the Congress to fix the SGR, providing predictable Medicare physician payments that incentivize quality and efficiency in a fiscally responsible way," but he does not identify particular legislative options.

It is important to remember that the President's proposal represents the opening bid in a lengthy federal budget process and that the proposal will be modified significantly by Congress. In the coming weeks, Obama Administration representatives will be called to testify before Congress on the President's proposals. Congress will then be tasked with drafting and passing its FY 2013 budget resolution, a nonbinding blueprint that provides a framework for the spending bills that the House and Senate Appropriations Committees will draft later this spring.

The FY 2013 measures, which cover spending starting October 1, 2012, are restricted by last year's budget control agreement, which caps spending at $1.047 trillion. Barring a change in the spending formula, major new spending initiatives this year are unlikely. Funding increases for most federal programs, including NIH, are also unlikely. Further complicating the appropriations process is the fact that FY 2013 spending bills are also subject to $97 billion in across-the-board cuts know as "sequestration" mandated by the failure of last year's Joint Select Committee on Deficit Reduction (commonly referred to as the "Super Committee") to reach agreement on a deficit-reduction proposal.

While programs such as NIH will face sequestration cuts, Medicaid is exempted from sequestration and Medicare cuts are limited to a two percent reduction in provider payments (which would be separate or on top of any potential SGR reduction for 2013). According to an analysis by the House of Representatives Appropriations Committee Ranking Member Norman Dicks (D-WA), the sequestration plan will likely include a 7.8 percent cut for NIH and other federal agencies. It is estimated that such a cut at NIH would mean the agency would be able to provide about 2,500 to 2,700 fewer research project grants per year.

Grassroots support for NIH funding will be critical to gaining any traction in the congressional budget process and ensuring that NIH does not receive significant cuts in funding. Please continue to visit the ASH website for updates on the FY 2013 budget process and information about how members can contact their Senators and Representative to generate interest in protecting NIH funding in FY 2013.

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