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Debt ceiling package: Research agencies could lose billions

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If Congress approves the package to raise the debt ceiling, health and research agencies should avoid steep cuts that some had feared.

President Biden’s team and House Speaker Kevin McCarthy’s negotiators brokered a package that puts the brakes on non-defense spending for the next two years.

The agreement does not gut spending for health programs or research. The House of Representatives approved the deal Wednesday night, sending it to the Senate. The White House says the agreement prevented cuts in Medicaid that would have deprived millions of healthcare, and the package provides funding for veterans’ medical care.

However, federal research agencies could lose billions of dollars in the agreement.

The American Association for the Advancement of Science projects an $8 billion decrease in research and development spending across the entire federal government. Lawmakers have also said the Centers for Disease Control and Prevention will lose some money for global health efforts.

While the agreement sets broad limits on discretionary, civilian programs, lawmakers will eventually decide how much money should go to agencies such as the National Institutes of Health, the prime source of federal aid for medical research.

While lawmakers could give a bigger bump to NIH, they would have to find money from some other source, and that won’t be easy with caps on spending, says Eleanor Dehoney, senior vice president of policy and advocacy for Research!America.

“The bottom line is, we’re not seeing growth,” Dehoney tells Chief Healthcare Executive®. “It’s very unlikely that we’re going to see growth in the next two years.”

“It’s a really uncertain funding environment,” Dehoney adds. “But one thing they can do is they can increase NIH and decrease someplace else.” (See part of our conversation with Eleanor Dehoney in this video. The story continues below.)

The agreement would keep nonmilitary spending flat in 2024, with a 1% increase in 2025, the Associated Press reports. However, Dehoney notes that the administration may have to tap supplemental spending to maintain flat funding in 2024, and those funds may not be available in 2025.

Essentially, discretionary spending on health, research and education could see minimal or no growth for two years.

NIH outlook

The NIH has typically enjoyed strong bipartisan support in Congress, and some lawmakers may want to do as much as possible for the agency, Dehoney said.

However, some Republicans in Congress still hold bitter feelings toward the recently retired Anthony Fauci, who had been the government’s top infectious disease expert and the director of the National Institute of Allergy and Infectious Diseases.

Beyond partisan preferences, Dehoney says there are some experts who feel that under the NIH’s model, “scientific progress isn’t moving as quickly as it should.”

“Hopefully, our champions will know that you don’t starve an agency to improve it,” Dehoney says. “You figure out how to improve it, and then you decide what happens with the money.”

Given the NIH’s popularity in the past, Dehoney is hopeful that lawmakers don’t reduce federal aid for its medical research programs.

“For NIH, it is uncertain, but a betting person would say they’re more likely than others to get flat-funded instead of cuts,” Dehoney says. “And, you know, they could get a nominal bump up.”

CDC loses aid

The agreement does claw back some money from the Centers for Disease Control and Prevention, including hundreds of millions of dollars toward global pandemic efforts. House Republicans say the agreement cuts $400 million from the CDC’s Global Health Fund.

Some healthcare advocates have derided such cuts in the wake of the COVID-19 pandemic, saying it could end up weakening efforts to detect and respond to future threats. Dehoney notes some in Congress remain angry over the CDC’s work in the pandemic.

Dehoney says she hopes some lawmakers Congress can keep Congress from “scapegoating one agency, and then punishing every American, all the American people because of it.”

She fears the CDC could be targeted for additional cuts as lawmakers decide on spending down the road.

“Punishing them by starving them is just a recipe for hurting the rest of us,” Dehoney says. “But I do think …  CDC is at risk.”

Other agencies

The federal government’s newest research agency, the Advanced Research Projects Agency for Health (ARPA-H), could be in danger of facing cuts, Dehoney says.

The Biden administration created the agency with the idea that it would engage in novel research that is high-risk and potentially high-reward in finding cures for cancer and other diseases. The agency is conceived as a civilian version of the Defense Advanced Research Projects Agency (DARPA), which did critical work in developing the internet and voice recognition technology.

As a new agency, the ARPA-H budget is modest (about $1.5 billion), but lawmakers facing tough decisions may want to direct research dollars elsewhere.

“I think advocates for ARPA H, and folks that really want to see the kind of bold, DARPA-like thinking, have got some work to do on the hill,” Dehoney says.

Research! America is one of those advocates, she notes. “If folks can kind of give them a little chance to breathe and prove themselves, you know, I think that that would be a very smart thing to do,” Dehoney says.

The Agency for Healthcare Research and Quality is another key agency with a modest budget. In his 2024 budget proposal issued in March, Biden sought $584 million, which would actually be a 20% increase. Dehoney says AHRQ could offer a lot of bang for the buck if the agency can offer a strategic plan to Congress.

“That’s where I really believe advocacy can make a difference, because it’s not a lot of funding,” she says.

“I think they have this incredible role to play again in the wake of COVID, in helping make sure that healthcare lives up to the promise of medical progress,” Dehoney says. “And so I think they need to explain to the hill how they’re going to contribute to that. And then I think they can get an increase because, again, their baseline is low.”