US President Releases FY18 Budget Proposal
On May 23 the White House released the President's proposed budget for the U.S. Government for Fiscal Year 2018 (FY18), titled A New Foundation for American Greatness. The budget emphasizes defense spending over non-defense discretionary spending and proposes significant cuts affecting agencies across the board, including many federal health agencies and programs.
The budget includes a proposed 16 percent overall cut, or $12.7 billion, to the U.S. Department of Health and Human Services and a $5.8 billion reduction in funding for the National Institutes of Health (NIH), including a $575 million cut to the National Heart, Lung, and Blood Institute. Additionally, it would eliminate the Agency for Healthcare Research and Quality as a separate agency and fold it into the NIH as an institute. The significant NIH cuts to direct funding for research would be a serious detriment to the nation's scientific growth. The Office of the National Coordinator for Health Information Technology (ONC) faces a proposed cut of $22 million, with a number of administrative changes, but more importantly significant reductions in funding for the infrastructure for interoperability. Interoperability is one of ONC's main priorities because it is fundamental to the electronic exchange of patient health information and clinician use of electronic health records. The Centers for Disease Control and Prevention would be cut by $1.3 billion, largely affecting immunization and influenza preparation and chronic disease prevention and health promotion. The budget also changes how prevention programs, including tobacco use cessation and heart disease prevention, are funded and does not require the newly created state block grants to be spent on the aforementioned prevention programs.
The U.S. Food and Drug Administration proposed cuts total over $850 million, with an increase in user fees by $1.3 billion, resulting in a program increase of $450 million. This offset, however, is dependent on Congress's willingness to risk jeopardizing carefully-negotiated agreements with industry that spell out the user fees paid by industry to fund the review of medical product applications. The user fee agreements were designed to provide the Agency with the additional resources necessary for reducing the timeline for the review of innovative drugs and devices. The current five-year agreement is set to expire in September unless a new agreement is reached.
The Centers for Medicare and Medicaid Services would also face funding cuts, including a $610 billion cut to Medicaid spending over the next decade and $5.8 billion in cuts to the Children's Health Insurance Program. Medicare will not face any direct cuts. Other notable items include the proposal to repeal the Independent Payment Advisory Board responsible for submitting recommendations to Congress for specified savings in Medicare, and specified medical liability reforms, including a safe harbor for physicians following clinical guidelines.
This proposed budget is an annual exercise that serves as a starting point for the federal budget process before Congress begins to draft FY18 appropriations bills. The budget is meant to communicate the current administration's policy priorities and holds no binding power over the budgetary process, which lies entirely within the purview of Congress. As is often the case with presidential budget proposals, members of Congress on both sides of the aisle have noted that this plan will not be adopted. Read more on the proposed budget here.
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