Congress Approves Federal Budget Outline

Congress narrowly approved a fiscal year (FY) 2006 budget resolution on Thursday, April 28, that cuts projected spending on the Medicaid program by $10 billion over four years, locks in $106 billion in tax cuts, and cuts the federal deficit in half by 2008. The vote on the FY 2006 Budget Resolution was 214-211 in the House and 52-47 in the Senate. Although the Congressional Budget Resolution is nonbinding, it establishes critical parameters for Congress as it begins the annual appropriations process and protects the tax and spending legislation approved as part of the budget from Senate filibusters. The budget parameters approved by Congress will make it difficult to appropriately fund many programs in FY 2006.

Congress’ budget outline lays out plans and priorities for spending $2.6 trillion in fiscal 2006, projecting a federal deficit of $383 billion. Spending parameters include $1.6 trillion for entitlement programs and $843 billion for discretionary programs ($439 million for defense and $404 million for non-defense programs). The $843 billion in discretionary spending is a 2 percent increase from FY 2005 and is consistent with the president’s FY 2006 budget recommendations.

Within the $843 billion in discretionary spending, the president’s FY 2006 Budget Blueprint recommended spending $28.845 billion on the National Institutes of Health (NIH) in FY 2006, a $196 million or 0.7 percent increase over FY 2005. If the FY 2006 budget parameters set by Congress hold up in the appropriations process, NIH could be looking at what is effectively a cut in funding (in FY 2006, medical inflation is estimated to be at 3.5 percent, so an 0.7 percent increase is, in reality, a funding cut). The $843 billion ceiling in discretionary spending will force lawmakers to make tough decisions about FY 2006 funding for many programs, including NIH.

ASH will keep members informed about each step in the debate toward the completion of the FY 2006 Federal Budget, with frequent updates posted on the Society’s Web site. The Society will also alert members about future opportunities to advocate for increased FY 2006 NIH funding.