House and Senate budget conferees have passed a budget resolution for FY 2016 that effectively locks in sequestered spending caps mandated under the Budget Control Act (BCA) of 2011. The budget deal would, over ten years, cut non-defense discretionary spending $496 billion below the originally agreed BCA level by FY 2025. To bolster defense spending, funds were used from a dedicated fund, the Overseas Contingency Operations fund that is off-budget. The budget resolution is non-binding and merely a blueprint, but does forecast another contentious partisan battle over FY 2016 spending bills. Congressional appropriators must now begin the process of looking at passing real legislation that would fund the NIH and other federal agencies and departments. The budget resolution is a partisan political document. Senate majority Leader Mitch McConnell (R-KY) commented that “I’m sure the Democrats will complain that we’re not spending enough on the domestic side, but all of that can be sorted out in the appropriations process.”

The budget resolution also provided overall spending allocations to the Appropriations Committee of $1.017 trillion in total (defense and non-defense) spending and is consistent with the spending caps imposed by the BCA of 2011. Each of the Appropriations Subcommittees receives their own allocation from which specific programmatic spending decisions are made. The House allocation for the Labor-HHS-Education subcommittee that funds NIH is $153.05 billion, a decrease of approximately $3.7 billion (2.4 percent) from the FY 2015 level. This funding allocation would essentially make any increase for NIH very unlikely and increases the chance of a budget cut.

In spite of this bleak prospect, there is congressional momentum to fix the spending caps for non-defense spending in general and NIH in particular. Rep. Duncan Hunter (R-CA) told San Diego Union-Times, "As Congress prioritizes spending under federal budget caps, one area that deserves a bigger slice of pie is NIH, which leads in medical advancement and innovation. There are plenty of things that should see less funding, but NIH isn't one of them." The Capitol Hill newspaper The Hill reported that House Energy & Commerce Committee Chair Fred Upton (R-MI) commented that he believes there will be a "pretty significant increase” to the NIH’s research budget. Upton is a co-sponsor on the 21st Century Cures Initiative.

The 21st Century Cures draft legislation includes significant funding increases for the NIH. But the funds are simply authorizations for appropriations to fund. This legislation sends another positive message to more fully fund the NIH but as noted above it will be up to the appropriators to fulfill “Cures” authorizations. The legislation would create a new NIH Innovation Fund that would be funded at $2 billion for five years. 21st Century Cures legislation would make this a mandatory fund and would not be subject to the annual appropriations process. The appropriations committee would also not be able to lower the NIH annual appropriation under the assumption that funding from the mandatory program would replace the funding shortfall. Of course, the Innovation Fund can only be created if the appropriations committee can find offsets from other programs under its jurisdiction and that becomes problematic.

With the new fiscal year beginning on October 1, it will be up to Democrats and Republicans this summer to agree on some type of sequester relief that lifts spending caps and provide momentum for future funding increases for NIH. How to get there is the question.