By Lou Caputo
Congress has indicated that it may postpone the impending debt ceiling crisis as part of a compromise that would also extend the time for a budget resolution. HR 325 extends the last day to decide those issues until May 18, 2013. The Senate now has the bill. This is good news for those who wish to avoid a repeat shutdown like we witnessed over New Year’s. Congress’s announcement, however, did not include any discussion of the means to remove a significant portion of the FDA’s (and other agencies’) budget. Because the “sequestration” question was not addressed, the FDA’s budget remains in jeopardy.
Sequestration is a congressionally created tool that reduces the federal budget automatically through across-the-board cuts designed to curb government spending. To avoid those cuts on January 2, 2013, Congress passed the American Taxpayer Relief Act of 2012 that moved the sequestration deadline until March 1, 2013.
With word of cooperation on the debt ceiling and budget questions, the risk of sequestration seems to have increased, according to a comment by David Berteau, director of the International Security Programs at the Center for Strategic and International Studies, as reported by Joyce Tsai of the media outlet, Stars and Stripes. stripes.com/news/debt-deal-may-increase-risk-of-sequestration-1.205481. Berteau agrees with sources at the Wall Street Journal, who collectively agree that the sequestration matter is mired in uncertainty. online.wsj.com/article/ SB100014241278873238549045 78262423125972166.html?mod=googlenews_wsj. Although FDA advocacy groups are concerned with drastic cost-cutting measures (see e.g., Steven Grossman, Sequestration: Still the Wrong Direction, strengthenfda. org/2013/01/19/ sequestration-still-the-wrong-direction/), the FDA has yet to publicly comment this year. With only one month before the deadline, this may be the time for new strategy.
Congress could handle the sequestration issue several ways. First, House Republicans and Senate Democrats may agree to avoid sequestration altogether on or before March 1. With the budget decision seemingly connected to the debt-ceiling, an express agreement on sequestration is unlikely unless Congress can wrap sequestration within a broader political issue. Second, sequestration will become effective and remain in effect for an indefinite period. Wisconsin Congressman Paul Ryan, during a segment on Sunday morning’s Meet the Press, stated that sequestration will likely happen under the current climate. That scenario that would require FDA to institute a variety of cost-saving measures, which could include personnel reductions and/or realignments, furloughs, and cuts to any number of programs and services. The agency must judiciously pick and choose whom it investigates and prosecutes, focusing its enforcement priorities according to agency resources. FDA had previously sought an increase in funding to maintain inspection operations required under the FSMA enacted in 2011. A reduction in funding could limit the agency’s rapidly expanding inspection and compliance program. Third, Congress could agree that, despite what some members have stated publically, sequestration carries a prohibitive level of risk given the unknown impact on the nation’s safety and economy and from voter backlash. Accordingly, Congress could simply postpone the issue through new legislation. In a system and political atmosphere designed for inaction, this latter approach remains not merely possible, but at least somewhat likely. Especially considering that Congress has previously delayed this issue and there has been no material headway made up to this point, the latest comments this morning as reported by the WSJ come as no surprise. Democrats to Look at Further Sequester Deferrals, blogs.wsj.com/ washwire/2013/01/29/democrats-to-look-at-further-sequester-deferrals/,
We are at the end of January, and with increasingly more attention being paid to the sequestration issue by all sides, we will likely see rhetoric and debate pick up in the near-term. Whether that discussion will necessarily engender progress or answers remains to be seen. In the meantime, the FDA will be forced to examine how it will operate with less.