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House and Senate Hold Hearings on EPA’s FY 2025 Budget Request

On April 30, 2024, the House Appropriations Subcommittee for Interior, Environment, and Related Agencies held a hearing on the fiscal year (FY) 2025 budget request for the U.S. Environmental Protection Agency (EPA). The Senate Appropriations Subcommittee for the Interior, Environment, and Related Agencies held a separate hearing on EPA’s FY 2025 budget request on May 1, 2024, and the Senate Committee on Environment and Public Works held its own hearing on May 8, 2024. On May 15, 2024, the House Energy and Commerce Subcommittee on Environment, Manufacturing, and Critical Materials held a hearing. EPA Administrator Michael S. Regan testified before both of the House Subcommittees, the Senate Subcommittee, and the Senate Committee (written testimony is hyperlinked).

April 30, 2024, House Subcommittee Hearing

During the April 30, 2024, House Subcommittee hearing, Ranking Member Chellie Pingree (D-ME) asked for an update on EPA’s risk assessment of per- and polyfluoroalkyl substances (PFAS) in biosolids. Regan stated that EPA is working on issuing it in final in 2024, and it will include a focus on certain PFAS to help EPA understand better the specific risks posed to farmers and the uptake in crops and livestock. Regan noted that EPA is working with the U.S. Food and Drug Administration (FDA) and U.S. Department of Agriculture (USDA) to research the risk from biosolids application. EPA intends to hold the polluters responsible for the PFAS accountable and does not want farmers, water systems, or taxpayers in affected communities to bear the burden of the contamination.

As reported in our November 3, 2023, blog item, on November 2, 2023, EPA announced that it granted a petition filed under Section 21 of the Toxic Substances Control Act (TSCA) to address the use of the chemical N-(1,3-Dimethylbutyl)-N′-phenyl-p-phenylenediamine (6PPD) in tires. Representative Derek Kilmer (D-WA) asked whether EPA still planned to issue an advance notice of proposed rulemaking (ANPRM) under TSCA Section 6 by the end of 2024 to obtain more information to inform a subsequent regulatory action. Regan stated that EPA expects to issue the ANPRM by fall 2024.

May 1, 2024, Senate Subcommittee Hearing

During the May 1, 2024, Senate Subcommittee hearing, Senator Martin Heinrich (D-NM) asked Regan to explain how EPA will address PFAS contamination under the FY 2025 budget request. Regan noted that EPA recently issued its first-ever National Primary Drinking Water Regulation (NPDWR), which will reduce PFAS exposure to over 100 million people. EPA also announced grants available to help smaller communities comply with the NPDWR. According to Regan, EPA needs the resources and staff to have a comprehensive approach to protect water quality from PFAS. Regan stated that EPA would use the funding to continue to collect scientific evidence and to study how to design technology and health-based standards to protect as many people as possible from different forms of PFAS.

Senator Gary Peters (D-MI) noted that during a 2023 Senate hearing, Regan testified that EPA had an additional 29 PFAS on its radar for a similar drinking water update and asked Regan about the status of the rulemaking. Regan stated that through the Unregulated Contaminant Monitoring Rule, EPA is monitoring drinking water in communities across the United Sates for these 29 PFAS and that EPA intends to pursue regulation for these PFAS.

Senator Patty Murray (D-WA), Chair of the Senate Appropriations Committee, asked Regan about the key funding increases included in the FY 2025 budget request for some of EPA’s core programs. Regan stated that the increases are intended to allow EPA to keep up with recent progress that it has made. While EPA recently issued the NPDWR for six PFAS, there are an additional 29 PFAS being monitored, and thousands more. EPA wants to ensure the safety of chemicals before they hit the market, and that is one of the places where EPA has a deficit in terms of staffing. According to Regan, EPA is getting more requests from agricultural communities about herbicides and pesticides.

Senator Katie Britt (R-AL) stated that EPA’s recent Endangered Species Act (ESA) proposals, such as the Herbicide Strategy, could impose hundreds of millions of dollars in new restrictions on farmers. Britt asked Regan how EPA would implement Congress’s bipartisan instructions in the FY 2024 appropriations report to consider best available data on pesticide usage, conservation practices, and real-world studies on spray drift and water concentrations. Regan testified that previous EPA decisions spanning decades and court rulings have put EPA in a precarious position. According to Regan, EPA is speaking with the farming and agricultural community and has come up with strategies that have received positive feedback. Britt asked whether EPA would consider appointing designated non-federal representatives to help EPA meet its ESA responsibilities. Regan responded that EPA needs more staff and resources to respond to court decisions and that the particular EPA office is down to levels from the early 2000s. Regan stated that he would need to talk through the use of non-federal representatives and agreed to discuss the issue with Britt.

Subcommittee Chair Jeff Merkley (D-OR) asked Regan what Congress can do to accelerate a solution to replace 6PPD with something that works as well without harming salmon. Regan stated that EPA intends to publish an ANPRM by fall 2024 and that EPA is also researching mitigation efforts to fill in the gap until it can take regulatory action.

Ranking Member Lisa Murkowski (R-AK) noted that in its FY 2024 budget request, EPA proposed a significant decrease in discretionary funding because of new revenues coming in from the Superfund tax, while the FY 2025 request includes additional funding for the program. Murkowski asked Regan for his view of the long-term funding outlook for the Superfund program. Regan testified that the tax collections for the first two years were lower than forecasted by the U.S. Department of the Treasury. Because of the gap, for FY 2025, EPA has requested additional funding.

May 8, 2024, Senate Committee Hearing

Senator Cynthia Lummis (R-WY) described EPA’s designation of perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) as flawed, stating that this would place the financial burden on passive receivers such as water utilities. More information on the designation and on EPA’s PFAS Enforcement Discretion and Settlement Policy Under CERCLA is available in our April 23, 2024, memorandum.

Committee Chair Thomas R. Carper (D-DE) asked Regan to describe the impact that the FY 2024 funding levels had on the TSCA program and what EPA could accomplish if it received the full amount requested in the FY 2025 budget request and maximized revenue collection through the recently updated TSCA fees rule. Regan stated that EPA received a small increase for TSCA in the FY 2022 and 2023 budgets, and it more than doubled the number of chemical reviews that it did each month. Without the funding in the FY 2025 budget request, EPA will see slower approval of new chemistries, especially for those companies in the semi-conductor, automotive, and battery sectors.

May 15, 2024, House Subcommittee Hearing

During the hearing held by the House Energy and Commerce Subcommittee on Environment, Manufacturing, and Critical Materials, Subcommittee Ranking Member Paul Tonko (D-NY) asked Regan what EPA is doing to address the backlog of new chemical reviews and what Congress can do to support EPA. Regan stated that with the budget increases that EPA received in 2022 and 2023, it more than doubled the number of new chemicals reviewed each month. According to Regan, EPA has reduced the backlog by half and prioritized new chemistries for the semi-conductor, automotive, and battery manufacturing sectors. According to Regan, without the funding in the FY 2025 budget request, EPA will see slower approval of new chemicals.

Representative Frank Pallone (D-NJ), Ranking Member of the Energy and Commerce Committee, noted that the reinstated Superfund tax has brought in lower receipts than projected by the Treasury and asked how EPA is adapting to the difference between the Treasury’s forecast and the actual funds collected. Regan testified that EPA is working with the Treasury Department to refine its estimates. According to Regan, the $300 million in the FY 2025 budget request will fill in the gap between the projected and actual tax receipts. Without the additional funding, Regan stated that there would be a slowdown in EPA’s ability to clean up Superfund sites. Pallone then asked Regan what the designation of PFOA and PFOS as CERCLA hazardous substances and EPA’s enforcement policy mean for different sectors. Regan responded that EPA is focused on the manufacturers responsible for the PFAS and will not pursue enforcement actions against sectors such as farmers or water systems.

Representative Randy Weber (R-TX) asked about EPA’s final rule amending the TSCA risk evaluation framework and its removal of the definition of “best available science.” Regan stated that he would have to get more context to respond to Weber. More information on EPA’s final rule is available in our May 14, 2024, memorandum.

Representative Dan Crenshaw (R-TX) asked Regan to comment on the almost 400 premanufacture notifications (PMN) awaiting a risk determination and the more than 90 percent that have passed the statutory deadline of 90 days. According to Regan, the issue predates the Biden-Harris Administration. Regan repeated that with the additional resources from Congress in 2022 and 2023, EPA has more than doubled the reviews completed each month.

Representative John Curtis (R-UT) noted that applications in EPA’s New Chemicals Program have dropped from 600 annually to just over 200 and that in the last two calendar years, EPA made 95 and 101 determinations, respectively. According to Curtis, although EPA is required by law to return fees if it misses deadlines, it has never returned the fee to an applicant when EPA has missed the deadline because applicants coincidentally suspend or withdraw their applications before the deadline. Curtis asked Regan to explain the coincidence of PMNs being suspended or withdrawn just in time to allow EPA to keep the money. Regan stated that he was unaware that applications were being withdrawn from EPA and committed to looking into it. Curtis stated that he has been told that EPA has effectively threatened applicants by phone to suspend or withdraw their applications and stated he would like Regan to look into this and report back. Regan committed to doing so. Curtis followed up by asking about EPA’s assumption that it can charge user fees covering 25 percent of the TSCA program’s budget, regardless of the cost. Regan responded that he is not sure that he agrees with the premise and that he needs to look at EPA’s performance with the budget that it did receive. Regan agreed to have a deeper conversation with Curtis on the topic.

Commentary

The hearings for EPA’s FY 2025 budget request were similar to the hearings for EPA’s FY 2024 budget request. Republicans pressed EPA on why it needs additional funding, criticizing the cost and reach of its current rulemakings, while Regan highlighted EPA’s obligations under federal statutes, including the Clean Water Act, the Safe Drinking Water Act, TSCA, the Federal Insecticide, Fungicide, and Rodenticide Act, and the ESA, as well as recent court decisions. On balance, no new information emerged.

Happy 25th Birthday, FMLA! 25 Years Later – Where Are We Now?

The Family and Medical Leave Act (FMLA) is celebrating its 25^thanniversary this month. On February 5, 1993, President Bill Clinton signed the FMLA into law guaranteeing certain employees up to 12 unpaid weeks off of work a year to care for children or ill family members, or to recover from one’s own serious health condition. During the time off, an employee’s medical benefits would remain intact.

When initially passed, the statute’s purpose was to address the rising number of American households with working parents who were concerned about losing their jobs when taking time off to care for a child or a sick family member. It was also meant to allow people who had serious health conditions to remain employed when taking time off work for temporary periods.

Since that time, the FMLA has become a source of contention for employers and employees alike. Employers often feel overburdened by the paperwork’s technical requirements, the ever-increasing threat of litigation, and the costs of complying with the statute. Employees and workers’ rights groups are concerned about the FMLA’s lack of coverage for part-time and small-business workers and the narrow definition of family. Either way you slice it, the FMLA is due for a revamp, but are the Trump administration’s budget proposal and tax cuts pushing the FMLA in the right direction?

FY2018 Budget Proposal

Although in its nascent form, President Donald Trump followed up on a campaign promise and included a proposal for paid parental leave in his FY2018 Budget Proposal. The Budget Proposal would give new mothers and fathers up to six weeks of paid parental leave. The funding for the proposal would come from the Unemployment Insurance system and be funded and run, at least in part, by the states. A reduction in improper payments, assistance finding new jobs, and the ability to keep reserves in the Unemployment Trust Fund accounts are listed as possible vehicles to fund the program.

As we previously reported, some state and local governments have already enacted their own Paid Family Leave measures. It is unclear at this point how the new proposal would affect these state and local laws. Although making coverage mandatory and taking the burden off of employers to pay for leave are attractive goals for many, there are practical concerns about how this proposal would be funded and which employees would be covered.

Tax Act

In December, a bill formally known as the Tax Cut and Jobs Act was signed into law. Beginning in 2018, employers who voluntarily provide paid family and medical leave are eligible to receive a tax credit of between 12.5 percent and 25 percent of the cost of each hour of paid leave based on the amount of compensation provided during the leave. The employer must provide at least two weeks of leave and compensate the worker for at least 50 percent of the worker’s earnings to be eligible. The tax credit will only be applied toward paid leave for employees who make less than $72,000. The employer must also make the paid leave available to both full-time and part-time employees who are employed at the organization for at least a year to receive the credit.

The tax act also broadens the scope of paid leave to cover part-time employees and may incentivize employers to voluntarily provide paid leave, but the act ends in 2019 and may not provide enough credit for all employers to buy into the program.

As the policy landscape shifts at the federal and state level towards paid leave, employers should consider which approach is best for their current situation. If relying on the tax incentive for purely financial reasons, an employer should analyze the numbers to make sure that the tax incentive is worth offering the paid leave, taking into consideration that the tax incentive may extinguish at the end of 2019 unless extended by Congress. Employers would also be wise to review state and local laws to make sure that their policies align with local paid leave mandates. Employers could proceed ahead of any mandatory change and voluntarily implement paid leave based on intangibles such as recruitment, retention, and worker productivity or wait and see if the family and medical leave winds change direction yet again.

This post was written by Taylor E. Whitten of Foley & Lardner LLP.

Tax Changes Implemented As Part of Revenue Package Supporting Illinois Budget

Yesterday afternoon, after months of wrangling and a marathon 4th of July weekend session, the Illinois House of Representatives voted to override Governor Bruce Rauner’s veto of Senate Bill (SB) 9, the revenue bill supporting the State’s Fiscal Year (FY) 2017-2018 Budget. The vote ended Illinois’ two year budget impasse and may avoid a threatened downgrade of Illinois bonds to junk status. The key tax components of the bill as enacted Public Act 100-0022 (Act) are as follows:

Income Tax

Rate increase. Income tax rates are increased, effective July 1, 2017, to 4.95 percent for individuals, trusts and estates, and 7 percent for corporations.

Income allocation. The Act contains a number of provisions intended to resolve questions regarding how income should be allocated between the two rates in effect for 2017.

Illinois Income Tax Act (IITA) 5/202.5(a) provides a default rule, a proration based on the days in each period (181/184), for purposes of allocating income between pre-July 1 segments and periods after the end of June when rates increase. Alternatively, IITA 5/202.5(b) provides that a taxpayer may elect to determine net income on a specific accounting basis for the two portions of their taxable year, from the beginning of the taxable year through the last day of the apportionment period, and from the first day of the next apportionment period through the end of the taxable year.

Note: This provision will create planning opportunities for taxpayers. For example, a taxpayer who paid bonuses to employees early in the year may wish to elect specific accounting, whereas taxpayers who paid bonuses out after the effective date of the tax increase may wish to pro rate under the default rule.

A new sub-section (IITA 202.5(c)(3)) provides that a taxpayer who elects a specific allocation different from the default rule must divide any Section 204 exemptions between the respective periods in amounts which bear the same ratio to the total exemption allowable under Section 204 as the total number of days in each period bears to the total number of days in the taxable year. We note that no mention is made regarding the treatment of credits.
Finally, another new sub-section (IITA 202.5(c)(4)) provides that a taxpayer who elects a specific allocation different from the default rule may not claim negative net income for one portion of the year and not the other. If a taxpayer’s net income otherwise would be negative for a portion of the year, the taxpayer is required to attribute all of its net income to the portion of the taxable year with positive net income and report net income for the other portion of the taxable year as zero.

Elimination of non-combination rule. For taxable years beginning on or after December 31, 2017, the definition of “unitary business group” is amended to eliminate the non-combination rule for group members that use different apportionment methods. There is no exception for insurance companies.

Note: For calendar year corporations, this change will take effect this year.

Expanded definition of “United States.” For taxable years ending on or after December 31, 2017, the definition of “unitary business group” is amended to include an expanded definition of “United States” to include the fifty states, the District of Columbia and “any area over which the United States has asserted jurisdiction or claimed exclusive rights with respect to the exploration for or exploitation of natural resources,” but not any territory or possession of the United States.

Note: For calendar year corporations, this change will take effect this year.

Decoupling from Domestic Production Activities Deduction (DPAD). The Act decouples from the federal domestic production activities deduction.

Research and Development Credit Extended and Reliance Protected. The research and development credit is restored retroactively (it had expired on January 1, 2016) and extended through December 31, 2021. The Act provides that all actions taken by taxpayers “in reliance on the continuation of the credit” are “hereby validated.”

Income Cap on individual taxpayer eligibility for certain exemptions and credits. Taxpayers with adjusted gross income for a taxable year in excess of $500,000 (in the case of spouses filing a joint federal return) or $250,000 (for all other taxpayers) may not claim the standard exemptions set forth in IITA Section 204. (IITA 5/204(g)). In addition, they may not claim a tax credit for residential real property taxes (IITA 5/208) or the education expense credit (IITA 5/201(m)).

Increased education expense credit. The education expense credit is increased to $750 for tax years ending on or after December 31, 2007. (See note above about limitations on taxpayer eligibility for the credit.)

Instructional materials credit. A new credit (maximum $250.00) is created for taxpayers who are teachers, instructors, counselors, principals or aides in qualified schools (for at least 900 hours during a school year) for instructional materials and supplies.

Sales Tax

Sales tax base not expanded to include services. The Act does not change the sales tax rate or expand the base to tax services.

Gasohol, majority blended ethanol, biodiesel and certain biodiesel blends. The Retailers’ Occupation Tax Act, Use Tax Act and Services Tax Act are amended to provide that gasohol is taxed at 100 percent of sales proceeds, effective July 1, 2017. Exemptions for blended ethanol, biodiesel and biodiesel blends are extended through 2023.

Manufacturing, Machinery and Equipment Exemption expanded to include graphic arts. The manufacturing, machinery and equipment exemption is expanded to include graphic arts machinery and equipment, effective July 1, 2017.

State Tax Lien Registration Act

The Act creates a central state tax lien registration system, which eliminates the requirement for the Illinois Department of Revenue (DOR) to post liens for taxes due in counties throughout the state. Taxpayers are required to pay any administrative fee imposed by the DOR by rule when creating the State Tax Lien Registry.

Revised Uniform Unclaimed Property Law

The Act includes a complete rewrite of the Illinois Unclaimed Property Laws, which we describe in a separate post.

This post was written byMary Kay McCalla Martire, Fred M. Ackerson and Lauren A. Ferrante of McDermott Will & Emery.

President’s FY18 Budget Proposes Historic Cuts to EPA Funding and Staffing

On May 23, 2017, the White House unveiled the full version of President Trump’s proposed budget for fiscal year (FY) 2018 entitled “A New Foundation for American Greatness.” As signaled in the President’s “skinny budget” released earlier this year, the proposed budget would fund the U.S. Environmental Protection Agency (EPA) at $5.7 billion — a more than 30 percent decrease from the current funding of nearly eight billion. EPA’s congressionally enacted budget has remained relatively flat since 2000, other than a significant boost in 2010 to $10.3 billion. The proposed FY18 budget also calls for an EPA staffing level of 11,611 — a thirty year low. The proposed decreased staffing level equates to a 20 percent reduction in the overall EPA workforce, which would eliminate approximately 3,000 employees. A portion of the staff cuts would come from programs proposed for elimination, including the Center for Corporate Climate leadership, the Coalbed Methane Outreach group, and greenhouse gas reporting programs. Some of the staff cuts may be accomplished by early retirement and lump sum voluntary separation payment incentives. On June 1, 2017, EPA Acting Deputy Administrator Mike Flynn sent an e-mail to EPA employees providing preliminary details and next steps on early retirement and separation incentive offers. Employees who accept offers will leave EPA by early September 2017.

Funding for state and tribal assistance grants (STAG) and other funds for state and regional initiatives is markedly decreased or zeroed out in the proposed budget, with cuts totaling $482 million, or 45 percent below the current enacted levels. According to the Environmental Council of the States, which represents state departments of environment, STAG monies support approximately 27 percent of state departments of environment annual budgets.

In the area of federal enforcement, the Office of Enforcement and Compliance Assurance’s (OECA) budget would decrease by nearly 25 percent below current funding. This decrease would reduce civil and criminal enforcement by 18 and 16.5 percent, respectively. Funding for laboratory and forensics costs that support enforcement cases, including monitoring, would decrease by over 40 percent. The corresponding reduction in enforcement efforts is likely to result in increased litigation from environmental advocates, particularly for matters governed by the Clean Air Act and the Clean Water Act which authorize citizen suits.

The budget requests $65 million for chemical risk review and reduction efforts under the Toxic Substances Control Act (TSCA), an increase of nearly $3.8 million from the current level. EPA’s budget document notes that TSCA fee collections, set to begin in the second quarter of FY18, will fund approximately 53 full-time employees to support the chemical review process that were previously funded by federal appropriations. This small boost in funding may not be sufficient enough to support the implementation of “new TSCA,” however, and the implementation could still result in delays.

The President’s budget provides $99.4 million in appropriated funding to support EPA’s pesticide registration review and registration program, including implementation. This amount would decrease funding by $20.4 million from current enacted levels. In addition to budget appropriations, EPA’s pesticide program is supported by Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) maintenance fees and Pesticide Registration Improvement Act (PRIA) registration application fees. These fees combined typically generate approximately $40-45 million in additional funding per year. Congress is currently considering the reauthorization of PRIA, which would increase application fees. Together, however, the total amount of funds available to operate the pesticide program (appropriations and industry fees) have declined over the past years and present a threat to the pesticide program’s ability to meet application review deadlines.

EPA Administrator Pruitt’s Back-to-Basics agenda includes addressing hazardous waste clean-up of the sites that have remained on the Superfund National Priorities List for decades. In spite of this priority action item, the proposed budget would fund the Hazardous Substance Superfund Account at $762 million, $330 million below the 2017 level. Instead of relying on the Superfund account to finance remediation, EPA instead would use existing settlement funds to clean up hazardous waste sites.

EPA’s Office of Water’s overall funding would decrease by nearly 20 percent. The Clean Water and Drinking Water State Revolving Funds (SRF) funding levels would remain funded at current levels. The SRFs support states’ administration of their drinking water and surface water programs and related infrastructure projects. Steep cuts to STAG grants, and zeroing out of the Section 319 Nonpoint Source program and regional initiatives like the Great Lakes and Chesapeake Bay programs will be felt at the state level. The Section 319 program targets nonpoint source pollution, including runoff from agricultural working lands. States use 319 program funds to support watershed improvement projects and incentivize voluntary installation of best management practices on farms (e.g., grass waterways and buffers).

EPA’s FY18 Budget in Brief provides more details on proposed budget allocations and priorities. The President’s budget is likely to face steep opposition in Congress, which has until September 30, 2017, to pass a budget for FY18, although this timeline will likely be extended through the use of continuing resolutions. The House is slated to finish its work on appropriation bills before the July 4, 2017, holiday break, which should provide more insights on how much influence the President’s budget will have with appropriations leadership.

This post was contributed by the Government Regulations practice group at Bergeson & Campbell, P.C.

Health-Related Programs Face Deep Cuts In President Trump’s “Budget Blueprint to Make America Great Again”

President Trump Budget Make America Great Again Hats

On March 16, 2017, President Trump Administration released his first budget outline for the 2018 fiscal year (FY 2018). In an effort to “shrink the role of government,” the $1.1 trillion budget proposal calls for a $54 billion increase in defense spending, with a corresponding $54 billion reduction in funding for many federal government programs. In particular, the Department of Health and Human Services (HHS) and the National Institutes of Health (NIH) would absorb double-digit budget cuts, in addition to other consolidation efforts involving those agencies.

President Trump is expected to release a full FY 2018 budget request in May of this year. Although the budget blueprint delivers on President Trump’s campaign promise for increased homeland security and military spending, opposition from both Democratic and Republican lawmakers suggests that the proposed cuts are unlikely to fully survive the congressional appropriations process.

Key Health-Related Spending Cuts Under the Budget Proposal

The NIH, a division within HHS, is the principal government agency for biomedical and health-related research. While 10% of NIH funding is used for research within its own facilities, the agency awards nearly 80% of its funding to outside universities, medical schools, and other research institutions. The Trump Administration proposes to reduce the NIH’s budget by $6 billion, or nearly 20%—back to its lowest level in 15 years.

The proposed budget cut eliminates $403 million in health professions and nursing training programs because the programs purportedly “lack evidence that they significantly improve the Nation’s health workforce.”

The proposal also calls for a “major reorganization” of the 27 NIH institutes and centers “to help focus resources on the highest priority research and training activities.” So far, the Administration’s only request with respect such reorganization is the abolishment of the Fogarty International Center, a $70 million program dedicated to training scientists in developing nations, particularly in Africa, to detect and control the spread of emerging infectious diseases.

The spending plan also consolidates the Agency for Healthcare Research and Quality (AHRQ) within the NIH. The AHRQ, which supports research on healthcare delivery cost, quality, and safety, could cease to exist under the proposed cuts.

Not surprisingly, President Trump’s budget proposal has been met with criticism from those in the biomedical research community. According to a statement released by the Association of American Medical Colleges, major cuts to the NIH would “cripple the nation’s ability to support and deliver” biomedical research. Likewise, according to Andrew Rosenberg, director of the Center for Science and Democracy with the Union of Concerned Scientists, “[w]hat this budget does is ignore evidence and undermine our very ability to collect it across the board.”

Other Important Budget Details

The budget blueprint also proposes to decentralize the Centers for Disease Control and Prevention (CDC), another agency within HHS, by establishing a state block grant program “to increase State flexibility and focus on the leading public health challenges specific to each State.” While this change would lessen categorical funding restrictions, like other block grant mechanisms, it likely would have the effect of reducing federal funding for such programs.

Notwithstanding the proposed cuts, the Administration plans to continue funding for the Global Fund to Fight AIDS, Tuberculosis and Malaria, and the President’s Emergency Plan for AIDS Relief. The budget outline also requests an additional $500 million for HHS to “expand opioid misuse prevention efforts and to increase access to treatment and recovery services.”

Trump Administration’s First Budget Battle; Implications for FY 2018 Proposal

While President Trump’s budget proposal sheds some light on his Administration’s priorities, it also faces an uphill battle in gaining acceptance in Congress. While lack of support for the budget proposal from congressional Democrats is unsurprising, several GOP leaders have already come out and voiced their opposition to the budget cuts. Rep. Hal Rodgers (R-KY), former chairperson of the House Appropriations Committee, has called the proposed cuts “draconian, careless, and counterproductive.” Rep. Tom Cole (R-OK), a member of both the House Appropriations and Budget Committees, described the cuts to NIH and CDC as “short-sighted.”

Still, some biomedical industry leaders have expressed confidence that Congress will not end up moving forward with the proposed cuts. “Congress has a long bipartisan history of protecting research investments,” noted Rush Holt, CEO of the American Association for the Advancement of Science (AAAS). “We are grateful and encouraged that members of Congress have already spoken out about the importance of keeping NIH funding at healthy levels,” added David Arons, CEO of the National Brain Tumor Society.

One additional development to keep in mind in connection with President Trump’s proposed budget for FY 2018 is how Congress will address the FY 2017 continuing resolution. The continuing resolution currently maintains government spending at FY 2016 levels, but is set to expire on April 28. By this date, Congress must pass an appropriations bill to keep the government running for the remainder of FY 2017. How President Trump and Congress address this issue could give an indication on whether Congress is willing to work with the President’s FY 2018 budget outline.

Tag: budget

House and Senate Hold Hearings on EPA’s FY 2025 Budget Request

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