publication date: Jan. 19, 2018

News Analysis

As government shutdown looms, don’t lose sight of bigger battle over appropriations, sequestration

By Paul Goldberg

As the rancor in Washington continues to escalate from bickering to a war on many fronts, the deadline approaches for the end of a continuing resolution that keeps the federal government open until Jan. 19.

Government operations for the fiscal year, which began on Oct. 1, have been funded through a succession of three CRs.

At this writing, the House has passed a four-week stopgap CR that doesn’t include a provision to allow children of undocumented residents to stay in the country. When the bill got to the Senate, Democrats balked, setting off a feverish last-minute round of negotiations with the White House.

At 1 p.m. Jan. 19, NCI staff members were told to monitor a website for news—and to plan to return to work on Monday.

“The current Continuing Resolution ends at midnight today and we are currently awaiting guidance on whether the federal government will shut down,” the email reads. “We anticipate additional information later this afternoon. Regardless of whether there’s a shutdown, anticipate that you will need to report to work on Monday morning, January 22, as normal.  We will also post important information on myNCI.”

Under the best-case scenario for NIH and NCI, the House and Senate leaders would set their battles aside to pass the fourth CR and finalize a deal on a bipartisan budget agreement that would take the first steps toward an “omnibus” appropriations bill to fund federal agencies for the rest of the FY 2018.

Nobody likes CRs. For government programs, CRs mean flat funding. That’s a problem for NIH, which is poised to get a $2 billion raise.

Congressional leadership and the White House have been negotiating a two-year budget agreement that would cover the rest of fiscal year 2018 as well as 2019. At this writing, that deal seems more elusive than ever.

Allowing a shutdown to happen would be a gamble for both parties, with mid-term elections only nine months away, and election-year posturing has lent intensity to the budgetary debates.

The fortunes of military and civilian discretionary programs seem to be intertwined tighter than ever before. Both sides seem to agree that in the short term (meaning the waning hours of the current CR) and in the long term (a real budget deal), Congress must raise the spending caps imposed under the 2011 Budget Control Act.

However, the sides cannot agree on which side—civilian programs or the military—would get more from the raise. Democrats want the money from the raised caps to be apportioned dollar for dollar. Republicans want more money for the military.

If they fail to come to an agreement, sequestration would set in and cuts to military and civilian programs would be made across the board.

This battle is playing out in short-term battles over the CR as well.

Several Republican hawks in Congress have indicated that they are reluctant to vote for another CR, because CRs keep budgetary increases from getting to the military. According to their logic, forcing a shutdown would lend new urgency to deal-making, which could at the very least include raises—called “anomalies”—being built into the CR on the military side.

Today, legislators are in an uproar over Deferred Action for Childhood Arrivals program that affects children brought to the U.S. by parents who had immigrated here illegally. The fight was further fueled by President Trump’s recent comment about immigration from “shithole countries,” and neither party seems to be showing the will to set aside their disagreements.

In addition to DACA, Congress is divided over disaster relief, measures to stabilize the Affordable Care Act, and the Children’s Health Insurance Program, which is set to expire in March.

The administration first said it would be willing to sign a stopgap bill that includes CHIP, but on Jan. 18, Trump tweeted that “CHIP should be part of a long term solution, not a 30 Day, or short term, extension!” The tweet, naturally deepened the state of disarray in the negotiations. Later in the day, the president said “it’s up to the Democrats” to avert the shutdown.

NIH has a lot at stake. The research institution is poised to receive its third-in-a-row $2 billion raise. If assurances from Congressional leaders are to be believed, the support for the measure to continue to boost NIH funding remains strong and bipartisan.

Congressional leaders, including both House Appropriations Labor-HHS-Education Subcommittee Chairman Tom Cole (R-OK) and Senate Appropriations Labor-HHS-Ed Subcommittee Chairman Roy Blunt (R-MO), have assured biomedical research groups that Congressional resolve to continue to grow NIH hasn’t gone away.

The divide in Washington is more than just partisan and more than just civilian vs. military. The divide is also between Republican-controlled Congress and the Trump White House. Last March, the Trump Administration budget proposal sought to slash the NIH budget by 21 percent (The Cancer Letter, March 17, 2017; April 7, 2017; May 26, 2017). Under the proposal, indirect costs would have been capped at 10 percent, a level that would have crippled research at academic institutions (The Cancer Letter, March 2, 2017).

The proposal energized the NIH supporters on both sides of the aisle, and instead of the cut, Congressional bills ended up giving NIH a $2 billion increase (The Cancer Letter, June 23, 2017; March 17, 2017; May 5, 2017). The indirect costs provision didn’t make it into the bill.

With the 2019 budget proposal two months away, it would be unrealistic to expect that the Trump administration will propose a raise or even flat funding, which means the schisms in Washington will deepen.

In a guest editorial last July, Michael Caligiuri, president of the American Association for Cancer Research and president of City of Hope National Medical Center, urged that spending caps be removed and that spending for domestic and research programs be increased dollar for dollar for military and domestic discretionary programs (The Cancer Letter, July 21, 2017).

“The medical research community is also facing a complicated and worrisome challenge in the form of the spending caps that are currently in place for FY 2018,” Caligiuri wrote. “If the NIH, NCI, the FDA, and other vitally important scientific agencies are to receive the resources that are necessary to drive advances across the clinical cancer care spectrum and save an increasing number of lives from cancer, it’s going to require that Congress negotiate a bipartisan budget deal to raise the discretionary budget caps for FY 2018.

“There’s an effort to break the caps on the defense side of the budget, while leaving the non-defense side of the budget caps in place. With regards to this proposal, we agree with Rep. Nita Lowey (D-NY), the top Democrat on the House Appropriations Committee, who said, ‘It is clearly time to lift the budget caps in FY 2018, but for more than just the Pentagon.’

“As Rep. Lowey has stated, the non-defense discretionary side of the budget ledger should grow at a comparable rate in order to support vital research and patient needs, as these and other programs ‘need attention just as badly as we need new jets, tanks, and ships.’ ”

While Trump’s budget proposal for the current year has slated biomedical research for draconian cuts, the administration’s appointments for key posts in areas affecting cancer have been sound and widely praised: Ned Sharpless for NCI, Francis Collins for NIH, and Scott Gottlieb for FDA.

He has appointed Alex Azar, a former Eli Lilly executive, to lead HHS. The Senate Finance Committee Jan. 17 approved Azar’s candidacy in a 15-12 vote and clearing the way to a vote by the full Senate.

Trump’s first HHS secretary, Tom Price, a former House member, resigned under pressure in the midst of an investigation of his use of charter planes.

In an earlier hearing, Azar acknowledged that drug prices are a genuine problem.

Copyright (c) 2018 The Cancer Letter Inc.