NIH, FDA facing budget cliff

Legislation passed by the U.S. Senate on Monday and by the U.S. House of Representatives late Tuesday addresses tax issues associated with the "fiscal cliff," but it does not resolve questions about the budgets of NIH, FDA and other government agencies. Instead, the American Taxpayer Relief Act of 2012, which is expected to be signed shortly by President Obama, defers implementation of budget sequestration for two months. The delay "will give Congress time to work on a balanced plan to prevent the automatic spending cuts," according to a White House statement.

If sequestration goes into effect, $2.5 billion would be slashed from NIH's $30 billion budget. Because the agency has committed most of its budget to grants that have already been awarded, the cut could force it to reduce new grant awards in 2013 by 25%, according to NIH Director Francis Collins. Sequestration would cut FDA's budget by $319 million, according to a report from the White House Office of Management and Budget, or by $320-$350 million, according to the Alliance for a Stronger FDA (see BioCentury, Sept. 17, 2012). ...