FY 2018 Federal Funding Update

On September 8, 2017, President Trump signed legislation to extend current funding levels for all federal agencies and programs through December 8, 2017. Passage of the continuing resolution (CR) avoided the threat of a shutdown that was looming if Congress failed to meet the October 1st deadline for completing fiscal year (FY) 2018 appropriations bills. The legislation also temporarily suspended the debt ceiling and replenished a disaster relief account needed to deal with the aftermath of Hurricanes Harvey and Irma.

With the threat of a government shutdown avoided for the time being, Congress continues to work toward completion of FY 2018 appropriations legislation. Committees in both the House of Representatives and the Senate have proposed funding levels for research at the NIH, NSF, VA and NASA (see table 1).

Table One
Agency Current Level (FY 2017) House Proposed Level Senate Proposed Level
NIH $34.08 B $35.41 B (+3.2%) $36.23 B (+5.6%)
NSF $7.47 B $7.34 B (-1.8%) $7.31 B (-2.2%)
NASA $19.65 B $19.87 B (+1.1%) $19.59 B (-0.6%)
VA Medical and Prosthetic Research $673 M $698 M (+3.7%) $722 M (+7.3%)

Of particular note, appropriators in both chambers proposed sizable increases for the NIH for what would be the third consecutive year. The Senate bill also included language that would prohibit the agency from making changes to facilities and administrative (F&A) cost reimbursement rates. That was a response to the Trump Administration’s FY 2018 budget proposal to cap NIH’s F&A reimbursement to research institutions at 10%. The Senate also added language to require NIH to determine whether fetal tissues obtained from spontaneous abortions and still births would be adequate for research needs. This is in contrast to the House version of the NIH funding bill, which would prohibit funding for research using tissues obtained from induced abortions. Because the House and Senate language differs, compromise fetal tissue language will have to be worked out in negotiations between the two legislative bodies.

The Medical and Prosthetic Research Program at the VA would receive a significant increase in FY 2018 under the proposals from both the House and the Senate. (See also the related article on language passed by the House that would restrict VA research with dogs.)

Unfortunately, appropriators were less generous with funding for the NSF and NASA. In budget hearings earlier this year, appropriators had noted that the current budget caps prevent them from proposing larger increases. These caps were put in place by the Budget Control Act of 2011 (BCA) with the goal of restraining discretionary spending over a period of ten years. If Congress approves spending bills that exceed the limits in the BCA, sequestration is triggered and funding for federal programs will be reduced to the level specified in that year’s cap. In recent years, Congress acted to raise the caps in order to increase funding for priority programs. Given the current political dynamics, it will likely need to do so again to finalize FY 2018 spending.