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THE BLACK HOLE

Looking South: the NIH’s 2016 fiscal outlook

By JONATHAN THON | SEP 15 2015

It’s time again for what has become (much to my dismay) an annual article series that began in fiscal year 2012 on the uncertain health of National Institutes of Health’s fiscal outlook (see 2015, 2014, 2013, 2012). Again, we find ourselves in a now common stalemate as the United States’ Senate and House Appropriations Committees have approved two separate versions of a FY 2016 spending bill for the NIH. The larger Senate bill seeks $3.2 billion for the NIH, or $2 billion (6.6%) more than the FY 2015 enacted level. The House bill seeks ~$900 million less than the Senate bill ($1.1 billion).

The president, who submits a budget of his own, has previously called for a $1 billion increase in NIH funding (3.3% more than the FY 2015 enacted level). In 2013, the NIH’s budget was cut by 5%, meaning the proposed changes would bring the NIH’s budget approximately back to FY 2012 levels – and so we come full circle. Or might have, except that between FY 2012 and FY 2015 there was a cumulative rate of inflation of 3.9%. That means that in the best of cases the NIH will be funded at between 2-5% lower levels than in FY 2012.

And here’s the catch: the Budget Control Act of 2011 puts hard limits on total expenditures (this is known colloquially as “the sequester”), meaning that any increases in NIH funding (however small) must ultimately come at a cost to other public health and education programs. As a result, Senate Democrats have threatened to filibuster any spending bills that adhere to sequester budget caps – a position supported by President Barack Obama, who has also promised to veto spending bills that adhere to restrictive spending caps. This implies that the proposed increases to NIH funding will need to come alongside a corresponding increase in discretionary spending. The president has therefore proposed a $71 billion (7.2%) increase in the overall budget (currently at the ~FY 2014 level of ~$1.016 trillion). The increase would apply to both defense and non-defense discretionary spending.

If Senate Democrats’ and the president’s commitments are the rock, then the Republican’s insistence that any non-defense increases come as a part of a deficit-neutral package is the hard place. Planned Parenthood, which is more a rallying point to galvanize partisan support than a national issue, has been offered up as the sacrificial lamb. Whatever your position on Planned Parenthood, you can see where this fight is headed.

Overall, the Senate bill seeks $146.4 billion for R&D (up 6.5% from FY 2015), the House bill seeks $142.1 billion for R&D (up 3.4% from FY 2015), and the president’s bill seeks $146.4 billion for R&D (up 6.5% from FY 2015). For context, FY 2014 R&D funding was $136.6 billion and FY 2015 R&D funding was $137.4 billion.

As with previous years Congress has until October 1 to reach a decision, after which it is left with the same two options it’s faced in prior years:

  1. Pass a temporary continuing resolution that extends federal agency and program funding at existing levels. This is the most likely scenario this time around, but far from a sure thing, or
  2. Shut down the government until an agreement is reached. Less likely, but employed in 2013 to delay the Affordable Care Act and repeal a tax to pay for it. No one wants this.

A continuing resolution would mean that the NIH will remain funded at ~9% lower levels than in FY 2012. What’s important to remember is that the cost of running a lab has not decreased, nor has the overwhelming expectation of those scientists to hold tenure-track jobs (An impactful scientific career). In fact, the number of academic scientists we’ve trained over these last 4 years has increased! and the only way the math adds up is for the number of academic faculty to remain unchanged, or perhaps shrink to offset the cost of doing science. While the implications are significant, they are also the status quo (PhD ‘overproduction’ is not new and faculty retirements won’t solve it). Again, I find myself quoting Melonie Fullick that “the wave of upcoming retirements is a myth and PhD numbers have little to do with the academic job market anyway.”

In spite of this poor outlook (for federal research funding and academic career trajectories, not for the tech or R&D industry as a whole), my upcoming series of posts will describe the value and pursuit of a Tenure-Track Faculty career, coloured by my experience. I’m sure David Kent will want to share his own experience, and I invite you to do the same.

ABOUT JONATHAN THON
Jonathan Thon
Dr. Thon is the CEO and chief scientific officer of Platelet BioGenesis, and a faculty member in the hematology division at Brigham and Women’s Hospital, and Harvard Medical School in Boston.
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