The 21st Century Cures Act: Another form of appropriation and another congressional win-win

Spending decisions long have been tricky. Joseph Keppler, "The opening of the congressional session," Puck, 1887. Source: Senate.gov

Spending decisions long have been tricky. Joseph Keppler, "The opening of the congressional session," Puck, 1887. Source: Senate.gov

By Tony McCann

Congress is increasingly caught between two powerful desires. First, there is the historic role of discretionary annual appropriations to fund agencies and exercise the “power of the purse” in our checks and balances system. Second, there is the wish to avoid annual appropriations via mandatory funding to lock-in predictable financial support of their priorities.

The result has been the proliferation of forms of appropriations as one side or the other prevails, or compromise is reached, in individual congressional actions.[1]This conflict was exacerbated by the advent of appropriations caps in the 1990’s that strengthened the resolve of interest groups to circumvent the budget process and weakened the Appropriations Committee’s ability to resist the end runs.

The 21st Century Cures Act (Public Law 114-255, 130 Stat. 1033 (2016)), the most recent example of this phenomenon, created yet another hybrid form of appropriation.[2]

The Cures Act authorizes a series of “Innovation Accounts” for the National Institutes of Health (NIH), and the Food and Drug Administration (FDA). For the NIH, the law creates accounts for the Beau Biden Cancer Moonshot and NIH Innovation Projects. For the FDA, the statute authorizes accounts for innovative projects under the agency’s existing authorities. The legislation also establishes an “Account for the State Response to the Opioid Abuse Crisis.”

In total, the act “transfers” (appropriates) $6.3 billion from the general fund to these “Innovation Accounts,” and provides specific amounts for each account for each fiscal year 2017-2026.[3] The Act then provides a series of budget offsets, totaling $6.3 billion, through reductions in Medicare, Medicaid, and other programmatic and managerial accounts.[4]

Funds, however, are not available until appropriated in annual appropriations acts. Thus, the Act transfers (appropriates) $6.3 billion into the various accounts, provides $6.3 billion in offsets and contemplates $6.3 billion in annual appropriations to fund the authorized activities. To assure full funding, the legislation forbids the Congressional Budget Office from scoring appropriations from the funds against the Appropriations Committee’s budget cap.[5]

This complex formulation is the result of the interplay of competing forces inside and outside Congress.[6] According to Kaiser Health News, “The 21st Century Cures Act… is one of the most-lobbied health care bills in recent history, with nearly three lobbyists working for its passage or defeat for every member on Capitol Hill.”[7]

As originally introduced by Congressman Fred Upton, R-MI, the Cures Act (H.R. 6) both authorized and appropriated funds to the Innovation Accounts (i.e. they were mandatory) and this approach was strongly supported by the various advocacy groups. The Senate, however, was concerned by the overall level of mandatory funding and, along with conservative Republicans in the House, wanted the funding made subject to annual appropriations.[9]

In a classic congressional compromise, the advocates got their funding reasonably assured since the appropriation does not count against an appropriations committee’s budgetary caps. The budget and appropriations committees got at least the fig leaf of having the final funding available only after enactment in an annual appropriations act.

S. Anthony (Tony) McCann serves on the faculty of the University of Maryland teaching courses in Public Policy and Budgeting. In addition to his extensive executive branch experience, Tony has congressional experience as the clerk and staff Director of the subcommittee of the House appropriations committee that funds most of the federal government’s discretionary programs in health, education and labor.

Notes

[1] Kevin R. Kosar, “How many types of appropriations are there?” LegBranch.com, March 29, 2017, http://www.legbranch.com/theblog/2017/3/29/how-many-types-of-appropriations-arethere

[2] https://www.congress.gov/114/plaws/publ255/PLAW-114publ255.pdf 

[3] S. Anthony McCann, “Forms of Appropriations, A Typology,” Public Budgeting & Finance, Vol. 36, #2 (Summer 2015) p. 125.

[4] https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/costestimate/hr34.pdf

[5] 21st Century Cures Act, P.L. 114-255, 130 Stat. 1033, 1039 (Title I).

[6] http://www.sciencemag.org/news/2016/02/amid-funding-dispute-senate-biomedical-innovation-effort-teeters-ahead

[7] Kaiser Health News, “‘Cures’ Act in Congress Heavily Influenced by Lobbyists,” https://www.nbcnews.com/health/health-news/cures-act-congressheavily-influenced-lobbyists-n689531

[8] https://www.congress.gov/bill/114th-congress/house-bill/6

[9] https://www.congress.gov/amendment/114th-congress/house-amendment/656