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Research Budgets Face Austerity in 2012

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – The National Institutes of Health and other life sciences and biomedical research funding agencies will need to trim their budgets for 2012, which are to be planned over the summer, to satisfy a White House that is now stressing deficit reduction and belt-tightening after two years of stimulus funding-boosted research budgets.

As the proposed $32.2 billion NIH budget for 2011 awaits its early mark-up sessions in Congress, and will likely wait through the mid-term elections in November for passage, the Office of Management and Budget has asked for 5 percent budget cuts at all agencies that receive non-military discretionary funding for 2012.

In addition to the 5 percent budget cuts, President Barack Obama’s OMB Director Peter Orszag has asked that all agencies, including the military, identify low-priority or poorly performing programs and submit them to OMB. Those poorly performing programs would comprise 5 percent of their agencies' total budgets.

Orszag, who is stepping down from his post next month, and White House Chief of Staff Rahm Emanuel said in a memorandum to all agencies earlier this month that the nation faces a number of “extraordinary challenges” but that “the nation’s finances are on an unsustainable course, and it is imperative that we restore fiscal responsibility” and support a three-year freeze in non-security discretionary spending.

Currently, the agencies within the Department of Health and Human Services are involved in pre-decisional negotiations about their budget requests that are not made public, HHS’ Director of Budget Policy, Execution and Review Andrew Baldus told GenomeWeb Daily News this week.

Orszag said in one memo that the 5 percent budget cuts will allow the Federal budget “to accomplish an overall non-security discretionary freeze even while providing funding for new initiatives and any contingencies that arise over the coming months.”

To comply with the 5 percent directive, agencies are not expected to simply reduce spending across the board, but to eliminate low-priority programs to free up other resources, to re-engineer staffing plans and improve procurement and grants management processes, and to focus attention on high-priority performance goals.

In order to identify programs and sub-programs that have the lowest impacts on agencies' missions, the budget-makers are expected to take actions based on several criteria.

Agencies are expected to identify discretionary programs and subprograms that make up at least 5 percent of their budgets. Mandatory programs are excluded from the rule, but agencies should include lists of “low-impact” mandatory programs in a separate list.

Agencies should evaluate programs based on their impact in fulfilling each agency’s mission, and should consider whether a program has “an unclear or duplicative purpose, uncertain Federal role, completed mission, or lack of demonstrated effectiveness.”

According to OMB, the agencies’ final budget submissions, which are due in September, should highlight the top funding and policy priorities; should have at least five “significant terminations, reductions, and administrative savings initiatives;” and should include analysis of how to better integrate tax and spending policies, and include other efforts.

The agencies are expected to continue to pursue sets of High Priority Performance Goals that were established in 2009

“The bottom line is that we do not have the luxury of simply spending more; we must continually review all spending to make certain every dollar addresses a clear need or problem,” according to the Orszag/Emanuel memo.

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