President Obama signed a deal to raise the debt ceiling Tuesday, avoiding a U.S. government default on its loans for the first time in history by just a few hours, by agreeing to cut the federal budget by nearly $2.5 trillion over the next decade. It is not likely global health programs will survive unscathed, but how large could the cuts be? Last week Science Speaks reported on the fiscal year (FY) 2012 foreign operations spending bill proposed in the House, which aims to cut global health funding by $700 million and blocks support for clean needle programs, cutting overall foreign aid by $3.5 billion. But with the new debt deal, is the foreign ops bill a moot point? It is still unclear, but the full Appropriations Committee vote on the House foreign operations bill was postponed indefinitely, and congressional efforts to meet the spending targets agreed to in the debt limit negotiations could spell even worse funding outcomes for global health than proposed in the initial House funding bill.
In the debt ceiling agreement, foreign aid was grouped under “security,” which includes the Department of Defense, Department of Veterans Affairs, and the National Nuclear Security Administration. According to reports, the additional programs including international affairs were added to “security” at the eleventh hour during the negotiations to provide some protection against deep defense cuts.
“Under this new budget agreement, the International Affairs Budget could face very deep cuts given how security and non-security spending are capped for FY 2012 and FY 2013, though the full impact will be determined by House and Senate appropriators this fall when they return from August recess,” according to an article by the U.S. Global Leadership Council.
The budget cuts agreed to in the debt ceiling deal will happen in two phases, the first of which was part of Tuesday’s deal and cuts $917 billion via caps on discretionary spending for the next 10 years and will not affect entitlement programs (e.g. Medicaid, Medicare and Social Security). In the immediate term, discretionary spending for FY 2012 will be capped by $1.042 trillion, and at 1.047 trillion in FY 2013. In FY 2012, “security” spending is capped at $684 billion and non-security spending is capped at $359 billion. Global health advocates are concerned that cuts in the “security” portion of the budget to meet the caps could fall disproportionately on foreign assistance programs, including development and global health. It is important to note that biomedical research funding at the National Institutes of Health and the U.S. Centers for Disease Control & Prevention, including global health initiatives, will be vulnerable to reductions under the non-security spending cuts.
A special joint committee consisting of 12 members – three members of each party from each chamber appointed by the party leader in each chamber – will be agreed upon in the next few weeks. The committee is tasked with making recommendations by November 23 on how to reduce the deficit by an additional $1.5 trillion in the next decade—beyond the savings garnered from the spending caps discussed above and recommending a package of budget savings of at least $1.2 trillion over the next nine years which can include cuts to entitlement programs.
If an agreement cannot be reached on where the cuts should be made by December 23, automatic cuts that exclude entitlement programs will begin starting January 2013, falling equally on defense and non-defense spending. However, foreign affairs does not fall under security spending for this round of cuts.