Significant Budget Cuts Imminent For the National Institutes of Health

Guest Blog by Luke Bouvier, PhD

In a notice issued a few days ago on February 21, the NIH released some additional details about its contingency plans if sequestration goes into effect this Friday, March 1, as scheduled.  In order to hit the mandated 5.1% budget cut, the NIH “likely will reduce the final FY 2013 funding levels of non-competing continuation grants and expects to make fewer competing awards.”  Non-competing continuation awards, which have generally been funded this year at 90% of the previous commitment level because of the ongoing budget uncertainty, may see some restoration above the current level “but likely will not reach the full FY 2013 commitment level described in the Notice of Award.”  The NIH also confirmed that in the event of the budget sequester, each of the 27 NIH Institutes and Centers will detail its own approach to meeting the reduced budget level.

Science likewise reported that a press conference held at the NIH last week confirmed the bleak budget outlook.  NIH Director Francis Collins and Senator Barbara Mikulski (D-MD) warned that the coming sequester cut of $1.57 billion to the NIH’s $31 billion budget would “slow scientific progress, delay clinical trials, and put a generation of young researchers at risk.”  Collins reported that “everything will take a hit,” though Institute directors will be able to use their discretion in allocating cuts among programs such as single-investigator grants, centers, and intramural research.  Referring to NIH staff and intramural researchers, Collins added that “we will do everything we can to try not to furlough or to lay off employees.”  Nobel Prize winner Carol Greider, chair of the Department of Molecular Biology and Genetics at Johns Hopkins University, also appeared at the press conference and lamented that the looming cuts could reduce NIH’s grant success rate from an already-low 17-18% down to 15%, which would translate to a reduction of grants in the hundreds, forcing cutbacks in biomedical labs throughout the country.  Collins confirmed that many high-scoring grant proposals have not received any funding yet at all because of the lack of budgetary clarity, adding that “some of that science is being held up as we try to figure out what resources we actually have in fiscal year ’13.”  Though few observers now believe that the sequester cuts can still be averted by March 1, Senator Mikulski, chair of the Senate Appropriations Committee, hopes that the NIH cuts will eventually be remedied in a budgetary deal to fund the federal government through the remainder of the current fiscal year.  That deal would have to be reached before the current Continuing Resolution expires on March 27, or else a government shutdown could result.

Sequester Cuts to the NIH Budget Look Increasingly Likely

Guest Blog by Luke Bouvier, PhD

The day of reckoning is fast approaching as concerns the sweeping federal budget cuts known as “sequestration,” scheduled to go into effect on March 1.  Originally slated for January 1, 2013, the cuts were mandated by the Budget Control Act of 2011, which was enacted as part of that year’s fight over the increase in the federal debt ceiling.  In the hope that a long-term budget deal would make the automatic cuts unnecessary, their implementation was postponed by the New Year’s Day deal that averted the so-called “fiscal cliff,” but most observers now agree that there is little appetite for a political compromise that could avoid them once again.  On January 24, incoming chair of the Senate Budget Committee Senator Patty Murray (D-WA) released a memo outlining the history of the budget deals reached over the past two years as well as the current state of affairs.  The details are messy, but the consequences for the NIH are clear:  a cut of approximately 5.1% to the current year’s budget, or $1.57 billion, which would be all the more severe in that it would have to be squeezed into the remaining seven months of the fiscal year.

In an interview with Politico last month, NIH Director Francis Collins called the impending cuts “a profound and devastating blow” to medical research, adding that “there’s no sort of lever you can pull and all of a sudden everything will be fine” in the face of a cut of that magnitude.  Collins noted that over the past ten years, the NIH budget has been essentially flat, which means that inflation has whittled away about 20% of its value.  The looming cuts would greatly exacerbate that trend, at a time when cancer research is “just exploding with potential,” Collins said.  “We could go faster and faster; … it’s an incredibly exciting science, but it will go slower.”

Nature reported last week that scientists are already cutting back expenditures in anticipation of the cuts.  Senior officials at the science agencies are under White House orders not to discuss specific plans for implementing the cuts, but the Office of Management and Budget has directed them to minimize the impact of the cuts on their core missions and to give priority to concerns over life, safety, or health.  Nature reports that the cuts to the NIH budget would be spread over all of its 27 institutes and centers, with only its Clinical Center spared in order to avoid putting patients’ lives in danger.  Directors would have some discretion in apportioning the cuts, as long as the total adds up to 5.1%.  Given the uncertainty, the NIH has been paying only 90% of the promised amounts for previously awarded grants; if the sequester goes into effect, the final 10% of these grants would almost certainly suffer a significant cut, leaving principal investigators with difficult spending decisions to make.

As if sequestration weren’t enough, looming right behind it is another impending budget crisis, as the current fiscal year’s Continuing Resolution expires on March 27.  If no budget deal is reached by then, a government shut-down is a real possibility.  And following along close behind that deadline is the expiration of the debt ceiling suspension on May 19, which could lead to a US government default on its payment obligations in the absence of congressional action.

What does the FY13 NIH Congressional Justification Say?

Now that I have recovered (more or less) from some particularly hellish Cycle I submissions, I can turn my attention to other matters until the Cycle II crunch begins. February is the time that the Appropriation process begins at NIH. On February 13, the Administration released their Congressional Justification for FY13, which runs from October 1, 2012 – September 30, 2013. Click here for the full report.

President Obama is requesting $30.86 billion for FY13, essentially freezing the budget at FY12 levels. There is a great deal of language in the report concerning the economy—specifically, NIH’s efforts to reduce health care costs and disease burden on society, as well as the economic growth associated with the research enterprise supported by NIH. From the cover letter:

“With continued support, NIH investigators will help to revolutionize patient care, reduce the growth of health care costs, and generate significant national economic growth… NIH must continue to seek innovative solutions to ensure rapid advances in science even in these uncertain economic times. Strategic investments will support research with the highest potential for improving public health and to preserve the scientific workforce… Investment in the future of public health has never been more important. In addition to the health benefits to all Americans in the future, such investment can play a key role in reinvigorating the economy now. Numerous economic analyses have illustrated the role that NIH research plays in creating jobs and spurring economic growth. In the face of growing global competition investment in biomedical and behavioral research and the scientific workforce will propel scientific discovery for the benefit of human health and the U.S. economy, both now and in the future.”

A call-out box early in the report states:

Every dollar of NIH funding generates about $2.21 in economic output.” (In Your Own Backyard, Families USA, June 2008.) 

AND

In fiscal year 2010, NIH extramural research funding generated $68.035 billion in new economic activity nationwide and supported more than 487,900 jobs.” (An Economic Engine, United for Medical Research, Spring 2011.)

In a budget briefing on Feb 15, NIH Director Francis Collins stated that despite the budget freeze, the President’s budget proposal would allow a 7% increase in new and competing RPGs in FY13. He stated that this increase would be made possible because there was an increased turnover in grants (i.e., decrease in the duration of grants because “science is moving more quickly” than it has in the past), together with a 1% reduction to noncompeting grants.

Other items of interest in the report:

  • Funds are sought from the Public Health Prevention Fund (part of the Affordable Care Act) to make a significant increase in Alzheimer’s research.
  • The ratio of funding between basic and applied research (54% basic, 46% applied) remains constant -as has been the case for several years.
  • The National Center for Advancing Translational Sciences (NCATS) would receive an 11% increase to $639 million, which includes significant funding ($50 million) for the Cures Acceleration Network.
  • The overall Health and Human Services budget request is 8.5% lower than last year.
  • The request for the National Science Foundation is up 5% to $7.373 billion.
  • The request for the Agency for Healthcare Research and Quality (AHRQ) is up by roughly 1% to $408.8 million. However, the proposal cuts investigator-initiated research grants by more than 31%, and comparative effectiveness research grants by 41%.

The Administration’s Congressional Justification is drawing criticism from the research community, who are quick to point out that when adjust for inflation, NIH funding has been in decline since 2003. Yet up until now, NIH has been spared the devastating budget cuts seen in many agencies in the past few years. It is likely that their luck has run out, given that virtually all discretionary spending, and in particular all aspects of the Affordable Care Act, risk being slashed dramatically when the budget request reaches the Hill.

Click here for more coverage provided by the American Association for Dental Research.