Bush Administration Introduces FY 2005 Budget Plan; Proposed NIH Increase is 2.7 Percent

President George W. Bush released his proposed fiscal year (FY) 2005 Budget on Monday, February 2. The $2.4 trillion spending proposal includes a request to make the 2001 and 2003 federal tax cuts permanent law, sharp increases in FY 2005 spending for the Departments of Defense (7 percent) and Homeland Security (9.7 percent), and a record $521 billion deficit. Overall, the President's plan calls for $818 billion in discretionary spending in FY 2005, an increase of $31 billion or 3.9 percent. However, without including the large increases for programs related to Defense and Homeland Security, President Bush's plan increases discretionary spending only 0.5 percent over FY 2004.

For NIH, the President recommends spending $28.8 billion in FY 2005, a $764 million or 2.6 percent increase over last year. The Bush Administration's plan for NIH proposes $15.5 billion to fund 39,986 total research project grants (RPGs), the highest level in the agency's history. Of these RPGs, 10,393 would be new and competing renewal grants. NIH estimates that the grant success rate will be 27 percent in FY 2005, equivalent to FY 2004's success rate. Other estimates from NIH maintain that, in the aggregate, the average cost of research project grants will increase by 1.3 percent in FY 2005.

Within NIH, the President proposes: $4.87 billion for the National Cancer Institute, a $134 million or 2.8 percent increase; $2.96 billion for the National Heart, Lung, and Blood Institute, a $86 million or 2.9 percent boost; $1.88 billion for the National Institute of Diabetes and Digestive and Kidney Diseases, a $55 million or 3.0 percent increase; and $1.06 billion for the National Institute on Aging, a $31 million or 3.0 percent boost.

The 2.6 percent proposed NIH increase falls short of the cost of inflation and may force the Institutes to choose between ongoing basic research efforts and new clinical research activities, which may result in a general slowdown in medical discoveries.

With ongoing military commitments around the world, and more emphasis on homeland security programs, many discretionary funding programs are not receiving the same level of support that they previously enjoyed in more booming budgetary environments. In addition, many officials in Washington, DC, feel that NIH received more than its share of a limited amount of discretionary dollars during its five-year doubling period between FYs 1998-2003 (when its budget was doubled from $13 billion annually to more than $27 billion per year), and other programs are due to receive increases in lieu of more funding for NIH. When the NIH doubling project was completed in FY 2003, policymakers anticipated that the Bush Administration would curb its commitment to significant biomedical research funding increases.

In the coming months, the House and the Senate will each compile their own budget proposals that will differ with the Bush Administration's plan for FY 2005. Moreover, the Appropriations Committee will soon begin to develop their individual spending bills. The federal budget and appropriations process this year is already marked by intense election-year partisan politics. President Bush's budget has encountered dissatisfaction from all sides of Capitol Hill; not only are Congressional appropriators contending that the President's plan shortchanges too many domestic discretionary programs, many Republicans are arguing that his plan is too costly and contributes to the growing federal deficit.

In fact, House Republicans – including moderates as well as conservatives – are united in an effort to hold the line on federal spending at or below the levels proposed by President Bush in his FY 2005 Budget – in other words, pushing for the President's budget number to be the ceiling, rather then the floor for FY 2005 federal spending.

ASH anticipates an uphill battle in advocating for increased FY 2005 NIH funding. The Society will continue to advocate on Capitol Hill and in the Bush Administration for the NIH research enterprise and ASH will be calling on members of the ASH Grassroots Network to contact their members of Congress on the FY 2005 Budget. The Society will need hematology researchers and scientists to appeal to Congress about the benefits of funding biomedical research and sustaining the momentum created by NIH's five-year doubling effort to ensure that the progress made in basic research findings is translated into new treatments.

More detailed information about the President's FY 2005 Budget Request for the Department of Health and Human Services is available online.