Budget and Appropriations Watch; Indirect Costs
Budget and Appropriations Watch: CQ reported that during a recent press briefing at Office of Management and Budget (OMB) Director Mick Mulvaney shared some insights into the administration's current thinking on fiscal policy:
- Debt Ceiling: The Trump administration will be flexible on the debt ceiling during summer negotiations, and Mulvaney is looking at reconciliation as a potential path to lift the debt limit without Democratic support.
- Budget Deal: The White House is open to a new budget deal that raises the caps. The President's main goal is to increase defense spending, and he'll support raising domestic spending if it helps achieve that goal.
- Continuing Resolution: Rep. Graves’ idea to pass all 12 spending bills before August is one the White House supports. The administration would prefer to avoid delaying the administration's spending priorities into the next fiscal year.
Senate Majority Leader Mitch McConnell told Politico this week that he has instructed appropriators to temporarily rely on spending limits from fiscal 2017 as they write new bills rather than the sequestered BCA caps for FY 2018. Leader McConnell added that he hopes to reach a deal with Democrats to set new spending levels "sooner rather than later." Speaker Paul Ryan told lawmakers that he plans to lay out the possible scenarios for this year's budget cycle at another members-only meeting next week, according to Politico. Meanwhile, some experienced Republican appropriators are suggesting that it may be time to abandon the budget resolution process in favor of a simple spending level spreadsheet. Several GOP insiders expect leadership to urge the Republican Conference to support the idea, advocating for what's known as a "shell" budget that focuses only on the reconciliation tool and discards the rest; the same tactic used for the fiscal 2017 budget to allow measures aimed at repealing the Affordable Care Act (ACA).
As previously reported, without congressional action to provide sequestration relief the spending levels for nondefense discretionary programs will be $2.9 less than FY 2017 and defense will be $2 billion less. Domestic spending would be capped at $516 billion and defense spending would be capped at $549 billion; levels both parties have protested.
In the absence of a deal to raise the caps, an across the board cut would be required to comply with the caps if Congress were to pass and POTUS were to sign an omnibus or year-long CR at FY 2017 levels.
HHS Secretary Tom Price Testifies before Senate Labor-HHS Subcommittee on Budget, Indirect Costs, and Opioid Epidemic: Tom Price, Secretary of U.S. Department of Health and Human Services (HHS), testified this week at a Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies hearing about the FY2018 HHS Budget Request.
The hearing focused primarily on Medicaid and opioid and substance abuse, but there was also discussion about the proposed $7.2 billion cuts to the NIH in President Donald Trump’s FY2018 budget proposal released May 23. “The Budget institutes policies to ensure that Federal resources maximally support the highest priority biomedical science by reducing reimbursement of indirect costs (and thus focusing a higher percentage of spending on direct research costs) and implementing changes to the NIH’s structure to improve efficiencies in the research enterprise.”
Senator Dick Durbin (D-IL) said proposals to reduce indirect costs in efforts to meet budget cuts at the NIH would ultimately reduce the amount of research that is performed nationwide. Indirect costs include operating expenses such as utilities, security, radiation disposal, phone lines, and many other resources that are essential to the research process.
You can find Chairman Blunt's opening statement, and Secretary Price's statement.