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Washington Highlights

President Releases FY 2012 Budget Request

February 18, 2011—President Obama Feb. 14 submitted his FY 2012 budget to Congress. The budget proposes $3.7 trillion in spending and $2.6 trillion in revenues, resulting in an estimated deficit of $1.1 trillion, approximately $500 billion less than the projected FY 2011 deficit. The budget proposes to reduce the deficit by $1.1 trillion over ten years, with two-thirds of the reductions coming from spending cuts. These cuts include a five-year, non-security discretionary spending freeze, described as an extension of the three-year freeze proposed last year, and therefore based on FY 2010-enacted levels. The freeze is projected to save more than $400 billion over ten years.

For the Department of Health and Human Services, the budget includes $79.9 billion in discretionary funding, an increase of $115 million (0.1 percent) over FY 2010 funding.

AAMC President and CEO Darrell G. Kirch M.D., Feb. 15 released a statement regarding the president’s FY 2012 budget. Dr. Kirch lauds increased support for the National Institutes of Health (NIH) that will “help drive progress in medical research and ultimately result in innovations that will provide new treatments, cures, and improvements in the quality of life for American families and patients everywhere, as well as spur economic growth and development.”

National Institutes of Health: For NIH, the budget proposes $31.748 billion in budget authority through the Labor-HHS-Education Appropriations Subcommittee, an increase of $745 million (2.4 percent) over the FY 2010 funding level. According to an update released Feb. 14, NIH projects the Biomedical Research and Development Price Index (BRDPI) will increase by 3.0 percent in FY 2011 and 2.9 percent in FY 2012.

The budget also includes an $81.085 million transfer from the Interior Subcommittee for the National Institute of Environmental Health Sciences, $150 million in funding for Type I diabetes research, and an $8 million transfer to the National Library of Medicine, for a total program level of $31.987 billion for FY 2012.

The budget emphasizes four areas for investment:

  • Advancing Translational Sciences, including the creation of the National Center for Advancing Translational Sciences (NCATS);

  • Accelerating Discovery Through Technology;

  • Enhancing the Evidence Base for Health-Care Decisions; and

  • Encouraging New Investigators and New Ideas.

NIH projects the budget would support 9,158 new and competing research project grants (RPGs) in FY 2012, with the total number of RPGs expected to be 36,852.The average cost of a new and competing RPG in FY 2012 will be about $433,000.

The budget proposes several policies to limit inflationary cost increases in FY 2012, including a 1 percent increase in the average cost of competing and non-competing RPGs; a 1 percent increase in Research Centers and Other Research; and a 1 percent increase for Intramural Research and Research Management and Support.

The budget includes $100 million for the Cures Acceleration Network (CAN), authorized by the Affordable Care Act (P.L. 111-148).

As part of the president’s initiative in FY 2012 to emphasize support for science, technology, engineering, and mathematics (STEM) education programs, the budget proposes a 4 percent stipend increase for pre- and post-doctoral research trainees supported by NIH’s Ruth L. Kirschstein National Research Service Awards program. A total of $794 million is requested in FY 2012 for this program.

As in previous years, the budget proposes to limit what NIH, the Agency for Healthcare Research and Quality, and the Substance Abuse and Mental Health Services Administration can pay for the salary of an individual, through a grant or other extramural mechanism, at a rate equal to Executive Level II ($179,700 in 2011).Salaries are currently capped at Executive Level I ($199,700 in 2011).

An overview of the president’s budget and the Congressional Justifications for NIH and the individual institutes and centers are available at the Office of the Budget's website.

Health Professions Training: For the Title VII and Title VIII health professions trainings programs, the president requests a total of $762.53 million, a $264.6 million (36.2 percent) increase over FY 2010-enacted levels. The president’s budget funds the Title VII and Title VIII programs through both the regular appropriations process and through transfers from the Public Health Service Act (PHS) evaluation tap, with program increases funded primarily through the PHS evaluation transfer. The president requests $449.45 million for Title VII, a $195.4 million (76.9 percent) increase over FY 2010. The primary care medicine programs, public health and preventive medicine programs, as well as the workforce information and analysis program would receive substantial increases over the FY 2010-enacted levels. The president’s request includes $313.1 million for Title VIII, a $69.2 million (28.4 percent) increase over FY 2010 levels.

National Health Service Corps (NHSC): The president’s budget requests $124 million for NHSC, an $18 million (12.7 percent) decrease from the FY 2010 discretionary level and a return to the FY 2008 discretionary level. The budget estimates $295 million in NHSC obligations, assuming full use of the NHSC Fund created under the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152).

Agency for Healthcare Research and Quality (AHRQ): The president proposes $366 million for AHRQ in FY 2012, $31 million (8.5 percent) less than FY 2010, when it received $397 million. In FY 2012, AHRQ is scheduled to receive $24 million from the Patient-Centered Outcomes Research Trust Fund established in the Affordable Care Act (P.L. 111-148 and P.L. 111-152), bringing the total request for AHRQ to $390 million.

Children’s Hospital Graduate Medical Education: The president’s budget proposes to eliminate the Children’s Hospitals GME program, funded at $318 million in FY 2010.

National Health Care Workforce Commission: The president’s budget requests $3 million for the National Health Care Workforce Commission established as an independent advisory body in the Affordable Care Act. Although the Government Accountability Office appointed commissioners Sept. 30 [see Washington Highlights, Oct. 1, 2010], Congress has not provided an appropriation to fund the commission’s activities.

State Workforce Development Grants: The president’s budget proposes $51 million for grants to support state and local health care workforce planning and to carry out planned workforce strategies. The grant program was authorized under the Affordable Care Act and an initial round of awards ($5.75 million) was supported in FY 2010 through the Prevention and Public Health Fund.

Emergency Preparedness: The president’s budget proposes $1.3 billion through the Public Health and Social Services Emergency Fund for the Office of the Assistant Secretary for Preparedness and Response (ASPR), $411 million (46 percent) more than the funding provided in FY 2010. Within the ASPR total, the budget requests $665 million from the BioShield Special Reserve Fund to fund the Biomedical Advanced Research and Development Authority (BARDA), accounting for the bulk ($345 million) of the increase over FY 2010.

The president proposes to reduce funding for the hospital preparedness grants to $375 million, a $42 million (10 percent) decrease below the FY 2010 funding level. In an accompanying explanation of the president’s proposed terminations and reductions, the budget notes that the remaining funding “will enable maintenance of adequate staffing and the ability to plan, exercise, and respond to terrorism or other emergencies,” and that the reduction reflects “the overall need for fiscal discipline in the current economy.”

Department of Education (ED): Beginning in the 2012-2013 academic year, the president proposes to eliminate subsidized Stafford loans for graduate students, and would redirect those funds to sustain Pell grants for undergraduate students.

The president proposes increasing Perkins Loan funding from the current $1 billion to $8.5 billion; however, the president also proposes legislative changes that would increase the Perkins interest rate from 5 percent to 6.8 percent that would accrue while the student is in school ― matching unsubsidized Stafford Loan terms.

Consistent with the president’s FY 2011 budget, in 2012 the Department of Education is scheduled to assume responsibility for the administration of the Health Education Assistance Loan (HEAL) program.

National Institute on Disability and Rehabilitation Research (NIDRR): The president’s budget proposes $110 million for the NIDRR, a $1 million (0.9 percent) increase over the comparable FY 2010 level.

Department of Veterans Affairs (VA): The president’s budget proposes to cut the VA Medical and Prosthetic Research program to $509 million, a $73 million (12.4 percent) decrease from the FY 2010-enacted level. The president’s budget assumes a commensurate decrease in Veteran Health Administration support for VA research as well as decreased funding from other federal resources (e.g., NIH).

For the VA medical care accounts, the president proposes a total of $52.541 billion in advanced FY 2013 funding, a $1.69 billion (3.32 percent) increase over FY 2012.

National Science Foundation (NSF): For NSF, the president requests $7.768 billion, an $895 million (13 percent) increase over FY 2010 levels. For research and related activities, the president’s budget requests $6.254 billion, a $69 million (12.4 percent) increase over the FY 2010-enacted level.

Food and Drug Administration (FDA): For FY 2012, the president proposes $2.744 billion for FDA, a $380 million (13.8 percent) increase over FY 2010-enacted levels.


Tannaz Rasouli
Sr. Director, Public Policy & Strategic Outreach
Telephone: 202-828-0525

Matthew Shick, JD
Director, Gov't Relations & Regulatory Affairs
Telephone: 202-862-6116


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