FY2007 Budget Released
The President released his FY2007 budget Monday, recommending
$2.8 trillion in total spending. Discretionary spending would increase only
2.1%,
less than the projected rate of inflation. Defense spending would increase
4.8% and non-security discretionary spending is slated to decrease nearly
1%.
The White House attempts to gain big savings from entitlement programs, in
which spending rises and falls according to complex formulas that Congress
would have to change to meet Bush's demands. The president proposed cutting
Medicare by $36 billion over five years, and $105 billion over a decade - mainly
by cutting payments to providers such as hospitals. Medicaid and the State
Children's Health Insurance Program would lose $5 billion over five years and
$12 billion over 10 years.
All totaled, his proposals for entitlement programs - including cuts, tax
hikes and Social Security partial privatization - would actually increase spending
by $551 billion. But those costs are not reflected in Bush's deficit projections,
since the president did not deduct the Social Security costs from the bottom
line. Return to top
White House Data Shows Bleak Budget Outlook According to a Washington
Post report, additional cuts in key domestic programs
will be required if the president is to meet his goal of cutting the federal
budget deficit in half by 2009. White House documents, not released as part
of the budget, but obtained by the Washington Post, also indicate large cuts
for numerous programs by 2011.
To meet the deficit reduction goal, Congress would have to
cut many of the most sensitive programs over the next several years. For example,
the NIH budget
would remain essentially flat in 2007 at $28.59 billion, but would be reduced
to $27.5 billion by 2010 under the president’s plan. Student financial
assistance would be cut from $19.2 billion this year to $13.7 billion in 2010.
Higher education assistance would be cut nearly in half from $2 billion to
$1.1 billion. Even the Women, Infants and Children's (WIC) Supplemental Nutrition
Program would be cut in later years. The Agriculture Department's Food Safety
Inspection Service (FSIS), a favored program since September 11, 2001, and
the mad cow disease and bird flu scares, would see budget increases next
year to $863 million from $829 million, but are cut severely by 2011. The
loss of purchasing power from inflation would exacerbate the consequences of
these lower budgets.
Most homeland security and defense programs are slated for
steady increases through 2011. Programs included within the general science,
space and technology
function of the budget would also see increases through 2011. Within this budget
function, space flight, research, and supporting activities would increase
modestly over the next five years.
The White House argues these budget projections
should not be viewed as indicating actual future budget requests from the
Administration. However, as most budget
observers have noted, these projections call into question the ability of
the Administration to meet its deficit cutting goals.
Return to top President Recommends $5-Billion Reduction in USDA Spending
Explained by Agriculture Secretary Mike Johanns as “exercising
fiscal discipline” and “avoid(ing) passing on the deficit to our
children and grandchildren,” the White House this week rolled out its
budget proposal for FY2007, asking Congress to authorize USDA spending at nearly
$5 billion
less than FY2006.
The president’s budget proposal is traditionally used
only as guide by congressional appropriators, and most spending decisions are
made independent
of White House proposals.
Many of the proposals in the FY2007 budget echo proposals
made by the White House last year. Congressional critics of the president’s
budget said that $5 billion in cuts proposed by the Administration in FY2006
were defeated
in committee, and the same outcome is likely for most of the rresident’s
proposals this year. The White House formula is based in part on new user fees,
income generators designed to replace cuts or offset increases. There are also
assumed to be overall
reductions in program spending, and an assumption no more emergency disaster
or other emergency funding will be necessary.
Of the $96 billion in estimated spending in 2007, about 77% – $72.3
billion – goes to mandatory spending, programs required by law, including
commodity and export programs and conservation. This leaves $24.5 billion for
discretionary spending, about $1.2 billion less than in FY2006. Included in
discretionary spending are soil and water conservation technical assistance,
domestic marketing assistance, and research and education.
Return to top
NASA Budget to Face House Science Committee Scrutiny
House Science Chair Sherwood Boehlert (R-NY) said he is concerned
about the "slowed
growth" for space and earth science in NASA's proposed budget for FY2007
and plans to review it at a Wednesday hearing, according to CongressDaily.
NASA's overall budget would increase 3.2%, according to NASA Administrator
Michael Griffin, while the agency's science budget would grow by 1.5%.
Senate Commerce Committee, subcommittee on science & space
Chair Kay Bailey Hutchison (R-TX) issued a statement applauding the funding
levels as "an
important indication of administration support for NASA and the Vision for
Space Exploration.” The administration proposed spending $16.8 billion
overall for NASA in FY2007, of which $5.3 billion would be for science, including
programs on solar system exploration. Griffin contended that NASA cannot "afford
such growth for science within the context of a top-line budget that is growing
at essentially the rate of inflation." But Boehlert disagreed. "Science
missions have been NASA's most successful activities, and they are also the
activities at NASA that most enhance human understanding of our world [the
true meaning of 'exploration'] and that have the greatest potential to develop
new technologies," he said.
Return to top
FDA/CVM Budget Hiked $6 Million; Export, Reinspection User
Fees Proposed
FDA’s overall budget request of $1.95 billion is nearly 4% higher than
in FY2006, with the Center for Veterinary Medicine’s (CVM) portion proposed
at $95.4 million, nearly $6 million more than the year before. CVM’s
budget proposal includes two new user fees.
In addition to the overall agency’s emphasis on food
defense from bioterrorist attack, human drug safety, influenza pandemic preparedness,
and medical device
safety, FDA will ask Congress to authorize it to collect $25.5 million in new
user fees. The first new fee would collect $22 million for reinspection of
regulated facilities – including feed mills – when the facility
fails to meet FDA requirements such as Good Manufacturing Practices (GMP).
The second new fee, estimated to generate $3.5 million, would be paid by companies
for food and animal feed
export certificates. Currently, FDA has authority to certify drugs for export,
but not feeds. Return to top
DeLay Back on Approps Committee
Rep. Tom DeLay (R-TX), who was a member of the House Appropriations
Committee until becoming majority leader in 2003, is rejoining the panel
following the vacancy created after the resignation of Rep. Randy Cunningham
(R-CA)
pleaded guilty in November to charges relating to accepting $2.4 million
in bribes for government business and other favors.
DeLay was also given a seat on the subcommittee overseeing
the Justice Department and NASA, a top priority for DeLay because the Johnson
Space Center in Houston is in his district.
Return to top WTO Rules Against EU on GMO Ban, But Europe Says No Changes Coming
Despite a preliminary ruling by the World Trade Organization
(WTO) that the European Union’s (EU) former arbitrary ban on genetically
modified organisms (GMO) violated trade rules, the EU this week said it does
not plan
to change its
regulatory regime.
U.S. agriculture and food processing groups hailed the WTO
action, but immediately called on the Bush White House to mount a second complaint
against traceability and labeling laws still required in the EU.
The U.S., Canada, Argentina, which brought the 2003 WTO complaint, declared
victory. But EU officials said the WTO ruling didn’t question the economic
or political process involved in the new approval process adopted in 2004,
and that the WTO decision “vindicated” the Europeans.
The WTO decision said the ban on GMO that existed in the EU
from 1998-2003 violated trade rules, and issued a similar ruling on several
EU nation member
bans modeled on the broader EU action. After the 2004 change in EU
approval process, the government permitted member nations to maintain bans
if they could provide “sufficient scientific evidence” to justify
the action.
Return to top CAFO Water Permit Application Deadline Extended
EPA announced this week it will permit additional time for confined animal
feeding operations (CAFO) to apply for water permit coverage and to implement
nutrient management plans as required by the agency under its CAFO rules. The
new deadline for application is July 31, 2007, to see National Pollutant Discharge
Elimination System (NPDES) permit coverage. Details of the extension and CAFO
filing requirements can be found at
http://cfpub.epa.gov/npdes/afo/caforulechanges.cfm#dates.
Return to top Australian Wheat Board Head Resigns; Senate Unlikely to Reopen Probe
An independent Australian investigation into whether the Australian Wheat
Board (AWB) knowingly paid up to $221 million in illegal payments in the United
Nation’s (UN) oil-for-food program that wound up in the pockets of Iraqi
government officials claimed its first casualty this week when the head of
the AWB resigned.
At the same time, a meeting between Australian Ambassador Dennis Richardson
and Sen. Norm Coleman (R-MN), who chairs the Senate Homeland Security Committee’s
subcommittee on investigations, has apparently satisfied Coleman’s interest
in the brewing scandal for now. Coleman told Australian radio he does not intend
to reopen his panel’s investigation into the AWB payments at this time.
Coleman said he is convinced of the independence of the Australian investigation
and will await the outcome of that inquiry before he “sorts out” the
facts of the matter.
Return to top FY2007 Budget Overview
Overall Gains Proposed for HHS The
Department of Health and Human Services (HHS) proposed spending at
$697.7 billion, an overall 3.1% increase
over FY2006. Of that, $627.8 billion is in mandatory spending.
Highlights include the following:
Centers for
Disease Control (CDC) – The FY2007 budget requests a total
program level of $8.2 billion for the CDC
and the Agency for Toxic Substances & Disease Registry (ATSDR),
a net decrease of $179 million below FY2006. HHS will continue investing
$1.3 billion through the CDC and HRSA to improve State and local
public
health preparedness.
Health Professions – The budget recommends
eliminating most general health professions grants, a reduction of
$99 million.
This decision was based on a Program Assessment Rating Tool (PART)
assessment which found, "after
40 years of funding, Health Professions programs have not demonstrated
an impact on placing health professionals in underserved areas." The
budget proposes "directing resources to activities that are capable
of placing health care providers in medically underserved communities."
Return to top
FDA Sees Small Increases The Food & Drug Administration’s (FDA) FY2007 budget request
to Congress totals $1.95 billion, a 3.8% increase over FY2006. This
includes $1.55 billion in budget authority and $402 million in industry
user fees.
Highlights include the following:
Critical Path to Personalized Medicine – The
White House requests $6 million for the Critical Path to Personalized
Medicine, an investment
that aims to fund more efficient, less expensive clinical trials, and
more effective drugs for the American people. This targeted investment
seeks to provide for the approval of drugs tailored to individual molecular
traits.
Drug Safety – The FY2007 budget
includes an increase of $4 million to improve the safety of drugs already
on the market. FDA plans to
continue to modernize the Adverse Event Reporting System, including
integration with the Sentinel System, and acquiring access to large
population-based databases, such as those at the Centers for Medicare
and Medicaid Services (CMS).
Electronic Medical Records – The
FY2007 budget request includes $169 million, an increase of $58 million
over FY2006, to continue FDA’s
effort towards providing secure access to personal electronic health
records to most Americans by 2014. Funding will support strategic planning,
coordination, and analysis of key technical, economic, and other issues
related to public and private adoption of health information technology
(IT). The American Health Information Community (The Community) was
established in FY 2005 as a federally chartered commission. The Agency
for Healthcare Research & Quality (AHRQ) will continue to work towards
the development, adoption, and diffusion of interoperable information
technology in a range of healthcare settings with a new emphasis on
health IT in ambulatory care settings.
Food Defense – The budget requests
$20 million to expand the network of laboratories that would analyze
samples in the event of a terrorist
attack on our nation’s food supply. As part of this effort, the
FDA will also expand its program of targeted food defense research.
Pandemic
Preparedness – The FDA request for ongoing pandemic preparedness
activities and launching additional measures to safeguard the public
health is almost $30.5 million. Preparedness activities include the
development of viral reference strains that manufacturers require
to
produce influenza vaccines; acceleration of manufacturing capability
to produce and deliver sufficient quantities of safe and effective
vaccines; collaboration with the international public health community
on recognizing and responding to emerging pandemic threats; and the
development of measures to address the potential pandemic-related
impacts on FDA-regulated food and animal feed.
Return to top
NIH Budget Flat-Lined
The National Institutes of Health (NIH) budget
would remain essentially flat in 2007 at $28.59 billion.
Highlights include the following: Biodefense – The
NIH total biodefense budget level is $1.891 billion, an increase of
$110 million and 6.2%
over FY2006. Within this increase,
NIH will direct $160 million, an increase of $110 million over the
FY2006 program level, to an Advanced Development fund in the NIH Office
of the Director. This initiative will support efforts to work with
academia and industry to develop candidate countermeasures from the
point of Investigational New Drug Application (INDA) to the level
that these candidate countermeasures could be eligible for acquisition
by
Project BioShield.
NIH will increase funding by $110 million to support the advanced
development of medical countermeasures for the Strategic National Stockpile
(SNS).
Enhanced Support for New Investigators– In the FY 2007 Request, NIH will invest $15 million in a new “Pathway
to Independence” program
to provide increased support for new investigators.
Pandemic Influenza – The NIH FY 2007 President's Budget requests $17
million to support specific initiatives in pandemic influenza research.
Roadmap for Biomedical Research -
NIH will direct $443 million towards the Roadmap initiatives, an increase
of $113 million over the FY2006
appropriation. Of this amount, $111 million will be provided by the
NIH Director’s Discretionary Fund (DDF), and the remaining $332
million will be contributed by the Institutes and Centers (ICs). The
IC contribution to support these trans-NIH research goals is estimated
to be 1.2% of each individual budget request for FY2007. The NIH Roadmap
is the result of an ongoing series of consultations with scientists
charged with thinking broadly about the future. The Roadmap has three
themes – New Pathways to Discovery, Research Teams of the Future,
and Re-engineering the Clinical Research Enterprise – comprising
28 trans-NIH research initiatives. NIH began implementing the initiatives
in FY2004.
Return to top
USDA Programs See Cuts
Total USDA expenditures are estimated to be $93
billion in FY2007, nearly $3 billion below the 2006 level. Roughly
77% of expenditures, or $71.3 billion in 2007, will be for mandatory
programs that provide services required by law, which include many
of the nutrition assistance, commodity, export promotion and conservation
programs. USDA's discretionary programs account for the remaining 23
percent of expenditures or $21.5 billion in 2007, a decrease of $1.2
billion from 2006. Discretionary programs include the Women, Infants
& Children (WIC) program; rural development loans and grants; research
and education; soil and water conservation technical assistance; management
of National Forests and domestic marketing assistance.
Programs seeing increases included funding for
programs related to food emergencies and plant and animal disease;
funding for
pathogen
identification and vaccine development, and a program that monitors
and detects animal and plant disease threats to improve response capabilities.
Highlights include the following: Animal & Plant Health Inspection Service (APHIS) – Animal Care
- The 2007 budget proposes a little more than $19 million for Animal
Welfare Act activities and $0.5 million for the Horse Protection Act
- an increase of about $2 million over 2006 for enforcement of the
Animal Welfare Act. The budget also proposes new user fees for inspections
which the agency expects will raise $8 million for Animal Welfare activities.
Agricultural Research Service (ARS) – The budget recommends approximately
$1 billion for ARS. It includes recommendations for eliminating $146
million in funding for congressional earmarks and about $50 million
in project terminations. These reductions would allow for increases
in other agency priorities totaling $57.7 million. Additionally, $49
million in unrequested projects have been redirected to high priority
Administration initiatives.
ARS/Human Nutrition – The budget requests an increase of $4.7 million
for health and obesity prevention research to address the efficacy
of the healthful eating and physical activity patterns set forth in
the Dietary Guidelines, with particular attention focused on preventing
obesity in children (i.e. nutrition survey research). The budget also
redirects $6.6 million to research that will focus on understanding
the dietary patterns that contribute to obesity in low socioeconomic
and minority populations.
Avian Influenza – The 2007 budget includes nearly $82 million for
avian influenza to enhance surveillance and response to pandemic flu
threats. Not counting emergency monies appropriated last year, this
is a $66-million increase.
Commodity Credit Corporation (CCC)/Milk Income
Loss Contract (MILC) Program – The
CCC budget reduces crop and dairy program
payments to farmers by 5% across the board, including the MILC program,
and lowers the payment limit on program payments to $250,000 per farm. Commodity Supplemental Food Program (CSFP) – The
budget eliminates funding for CSFP which is only available in certain
areas, and according
to the budget documents, “overlaps with two of the Nation’s
largest Federal nutrition assistance programs—Food Stamps and
WIC.” USDA intends to pursue a transitional strategy to encourage
those eligible for WIC to apply for that program, and to encourage
elderly CSFP recipients to apply for the Food Stamp Program.
National Research Initiative Competitive Grants (NRI) – The
budget proposes $247.5 million for the NRI program within the Cooperative
State Research, Education & Extension Service (CSREES),
an increase of $66.3 million above 2006. The increase will fund initiatives
in agricultural genomics, emerging issues in food and agricultural
security, the ecology
and
economics of biological invasions, plant biotechnology and water security.
According to USDA, NRI makes a major contribution to developing the
next generation of agricultural scientists.
Crop Insurance – Net expenditures for crop insurance have grown nearly
50% since 2001, but farmers still receive ad hoc emergency disaster
payments. The White House proposes higher minimum insurance coverage
levels – up from 27.5% to 50% of crop value, tying commodity
payments received by farmers to the purchase of insurance and changes
in fees, premium rates and delivery expenses, saving nearly $140 million
a year.
Farm Service Agency (FSA)
• Dairy Price Support Program – The proposed budget requires
the dairy price support program to “minimize expenditures” by
changing the payment calculation formula to reduce payments; imposing
a 3 cents
per cwt. assessment
on milk marketed by producers, and a 1.2% sugar marketing assessment
to be paid by processors on all processed sugar.
•
Conservation Reserve Program (CRP) – The budget proposes
more than $4 billion to implement CRP and support enrollment of an
additional
23 million acres, most in the Environmental Quality Improvement Plan
(EQIP). The largest program receiving funding is CRP at $2.1 billion,
with an additional $83 million set for the Conservation Security
Program (CSP); Food & Agriculture Defense Initiative – The budget
proposes $5 million for a Higher Education Agrosecurity Program as
a component
of the Food and Agriculture Defense Initiative.
Food Safety & Inspection Service (FSIS)/Meat And Poultry Inspection
– Costs of federal meat and poultry inspection would be offset through
a proposed user fee, designed to generate $105 million; this is a plan
that has been sent to Congress numerous times and failed numerous times.
Foreign Agricultural Service (FAS)
•
Market Access Program (MAP) – Funding for MAP came in for a 50%
proposed cut, dropping the program to $100 million from the 2002 Farm
Bill authorization of $200 million.
•
Foreign Market Development (FMD) – Funding for the FMD
program was continued at the FY2006 level of $34.5 million. Grain Inspection, Packers & Stockyards Administration (GIPSA) – Funding for grain inspection services through the GIPSA is increased
by $2 million, with user fee levels proposed at current levels.
School Lunch & Breakfast – The budget funds the Child Nutrition
Programs at $13.9 billion, an increase of approximately $700 million
above 2006. These programs include the National School Lunch, School
Breakfast, Summer Food Service, Special Milk, and Child and Adult Care
Food Programs. The budget includes a $300 million contingency fund
to cover unanticipated increases in participation or meal reimbursement
rates. The School Lunch Program projects over 5 billion reimbursable
meals in 2007, an increase of 1.3% over the 2006 level.
WIC – The budget requests $5.4
billion for the Special Supplemental Nutrition Program for Women, Infants,
and Children (WIC), approximately
the same as the 2006 program level. A $125 million contingency fund
is also proposed to ensure adequate funding if program participation
or costs exceed estimated levels. The budget includes proposed legislation
(re-proposed) to limit WIC nutrition services and administration to
25% of total costs. The Administration estimates this change would
result in savings of $152 million. Also, re-proposed is a legislative
proposal to limit automatic eligibility for the program to individuals
unless their family income falls below 250% of the federal poverty
guidelines (participation in Medicaid and certain other programs currently
results in automatic eligibility for WIC).
The budget also includes a new legislative proposal
that would require a 20% state match of federal nutrition services
and administration
spending to begin in 2008. This proposal would raise $265 million beginning
in 2008.
Return to top
Additional Programs
National Science Foundation (NSF) - As part of the
President’s American Competitiveness Initiative, the budget requests
an increase of 7.9% for the National Science Foundation (NSF), initiating
a 10-year commitment to double NSF’s investments in science and
engineering. NSF is a leading agency in the National Nanotechnology
Initiative, funding nanotechnology investments at $373 million in 2007,
an increase of 8.6 % from 2006 and of nearly 150% since 2001. The 2007
budget would fund approximately 50 new nanotechnology interdisciplinary
research teams. NSF is also a leading agency in Networking and Information
Technology Research and Development (NITRD). The budget provides $904
million of NITRD funding, an increase of 11.5% from 2006.
National Aeronautics and Space Administration (NASA)
- NASA’s
budget would increase by 1%, bringing its budget to $16.8 billion.
Increases would be seen in solar system
exploration, Earth-Sun science, exploring systems and technology. Decreases
are set for education and business partnerships.
Return to top
New Bills
A number of new bills have been introduced. Click
here to send a request for a copy of the text or more information about
the bill.
S.2263
Sen. Mark Dayton (D-MN) offered a bill to require automobiles
and light trucks manufactured after model year 2007 be able to operate
on a fuel mixture that is at least 85 percent ethanol.
H.R.4713
Legislation proposed by Rep. Leonard Boswell (D-IA) to make it unlawful
for a packer to own, feed, or control livestock intended for slaughter.
H.R.4726
Rep. Darrell Issa (R-CA) introduced a bill to enhance the adoption
of a nationwide interoperable health information technology system.
Return to top
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