Illustration: Maura Losch/Axios
The debt ceiling bill marks the end of big annual increases for NIH, but overall it avoids the worst scenarios for health care funding, health policy experts tell Axios.
Why it matters: If this bill passes both chambers of Congress, it will outline how the next two fiscal years of federal spending for health agencies will proceed — and reduce the threat of a government shutdown as well as prevent a default.
Details: The bill would raise the debt limit through Jan. 1, 2025, and keep non-defense discretionary spending levels essentially flat for fiscal year 2024, with a 1% increase in fiscal year 2025.
- COVID rescissions amount to about $30 billion being taken back, according to a White House official. However, the official said $5 billion of the rescissions will be saved for Project NextGen, which will focus on developing next-generation COVID vaccines and therapeutics.
- A source familiar said $15 billion of the COVID clawbacks is coming out of the public health bucket. The remainder of the funds will be taken back from a variety of programs, including from the State, Treasury, Labor and Justice Departments as well as the EPA.
- The bill isn't specific on the exact programs those COVID public health rescissions will hit, but does list funds from the CDC, NIH and CMS.
What they're saying: Health policy experts told Axios the bill is almost a best-case scenario for appropriations funding of health agencies like the NIH and CDC, given the realities of the political situation.
- "This improves the chances that Congress would write appropriations bills, and if that happens, NIH has a very reasonable chance of getting an increase. That might not have happened if there was a yearlong CR," said Erik Fatemi, a principal at Cornerstone Government Affairs and a former Senate Democratic Labor-HHS appropriations staffer.
- Fatemi said NIH watchers' biggest concern this year, going into a divided Congress, was that Republicans wanted to cut non-security spending by billions of dollars and Democrats wouldn't agree to that — which could have resulted in two straight years of CRs.
Though the debt ceiling bill sets the top lines for spending, it doesn't have a specific number for how much money will be set for specific appropriations bills.
- "We’ll probably see Democrats warring to get a little more for Labor-HHS even if it’s at the expense of some of the other appropriations bills," said Fatemi.
- "NIH more than practically any other non-security program in the bill, could benefit under that scenario, since there's still a lot of bipartisan support for the agency."
Between the lines: Chris Meekins, a health policy analyst at Raymond James and a former House Republican staffer, noted that NIH has averaged 5.6% funding increases over the last seven years. "This budget deal cements that those days are likely over," he said.
- The good news, Meekins said, is that the outcome for NIH is likely to be better than in the 2011 deal between then-President Obama and House Republicans. After that deal, NIH funding fell by 5% in two years.
- "Worst case is the 1% automatic cut for NIH if they do not pass a Labor-HHS bill. That is manageable even if not ideal," said Meekins. "It is plausible NIH could see an increase if they can pass a Labor-HHS bill, but disagreements over policy riders will make that a heavy lift in my view."
- Darbin Wofford, a health policy adviser at Third Way, noted that "following a worldwide pandemic, we’d love to see more investment in pandemic preparedness and public health — not flat levels or rescinded funds. But the reality is that we’re in divided government and simply cannot get everything. At the end of the day, this bill is a win."
Of note: Don't forget that the bill dropped Medicaid work requirements, which were a big topic of contention between House Republicans and the White House.
- Even during negotiations last week, Republicans appeared insistent on keeping that measure, which was in the original GOP debt limit bill. But in the end, it fell out.
- "It's quite significant that Medicaid is untouched," said Larry Levitt, executive vice president for health policy at KFF. "This shows once again that the political power of Medicaid should not be underestimated."
- "Medicaid is symbolically important because of its connection to Obamacare, but it also has powerful interests behind it," added Levitt.
- Both Republicans and Democrats have also promoted how they didn't touch Medicare when negotiating out the contours of the debt ceiling bill.
What we're watching: The House is scheduled to vote on the bill on Wednesday.
- With complaints from the House Freedom Caucus and pushes from House Democrats to sell the bill to their caucus, as well as potentially a contentious House Rules hearing, the debt deal still has a long way to go.
- And don't forget the Senate, where Majority Leader Chuck Schumer has told senators they "should prepare for potential Friday and weekend votes."
