Big NIH Funding Boost Likely to Pass Despite Grumbling From Fiscal Hawks

Heritage Action for America on Tuesday called on conservatives to oppose bipartisan legislation that would increase funding for the National Institutes of Health and for medical innovation, saying it cannot support creating a new mandatory spending program.

It is the latest episode in a fight among fiscal hawks and conservatives over how the GOP-controlled Congress is—or isn't—cutting spending.

The bill, called 21st Century Cures, is expected to pass the House later this week, although not with the overwhelming majority sponsors have hoped for. The measure would establish a Medical Innovation Fund, giving NIH an additional $8.75 billion of mandatory funding over five years. It also reauthorizes normal NIH funding, although this is categorized as discretionary.

The mandatory spending is causing angst because it would put the spending outside of budget caps, said Dan Holler, Heritage Action's communications director. Many conservative budget-reform proposals have sought to put more of the federal budget into the discretionary budget process, meaning programs have to be examined annually.

"This goes in the exact opposite direction," Holler said. "This is creating a new mandatory spending program that is totally out of step with how the House Republicans got their majority."

It's unclear yet whether conservative House members will also oppose the legislation, but some have their reservations.

"We are still reviewing it, but have concerns—especially with the creation of a new mandatory spending program," a spokesman for Rep. Justin Amash of Michigan wrote in an email.

The legislation, championed by Energy and Commerce Chairman Fred Upton and Democratic Rep. Diana DeGette, aims to brings drugs to market faster, partly by increasing NIH spending. It sailed through committee with a 51-0 vote in May. Upton hopes to replicate this kind of success on the House floor to send a message to the Senate, which has no interest in moving at the same speed and is looking instead to have its version through committee around Thanksgiving.

In response to Heritage's opposition, a committee spokeswoman said the bill will actually reduce the deficit.

"While the Heritage Foundation has long been looked to for innovative policies and creative thinking, the Heritage Action alert takes a surprisingly short-sighted view of our plan to achieve meaningful reform in a fiscally responsible way," Noelle Clemente, the committee's press secretary, wrote in an email. "We continue to look forward to a strong House vote in favor of this bill to reduce the deficit, tackle the long-term costs of incurable disease, and improve people's lives."

With an end to the House effort in sight, Energy and Commerce began the week on the PR offensive. In an email on Monday, the panel emphasized that the innovation fund is temporary and fully offset, and that the bill includes entitlement reforms that will reap billions in savings.

"While the Innovation Fund is technically characterized by [the Congressional Budget Office] as mandatory spending, it's important to understand the difference between the Innovation Fund and the typical mandatory spending that occurs through many of the nation's entitlement programs," the committee email said.

Sponsors have tried to address the cost issue.

Last month, the Congressional Budget Office put a price tag of $106 billion on the House bill between 2016 and 2020. Around the same time, Budget Committee Chairman Tom Price began pushing back against the bill because of its cost.

Since then, a new draft of the legislation was released, decreasing the innovation fund from the original $10 billion over five years to $8.75 billion and tweaking the pay-fors, including dropping a controversial change to the Medicare prescription drug program.

But a mandatory spending program, even if it's cheaper, is still unacceptable to Holler, who doesn't buy the argument that it won't turn into another permanent entitlement program despite the five-year limit.

"Just saying it's going to go away is not a credible case to be made," he said. "Politicians in Washington in general have never shown a desire or willingness for a program to expire."

The House is not alone in its enthusiasm for medical innovation and precision drugs. President Obama mentioned the issue in his State of the Union address, after which the White House unveiled its Precision Medicine Initiative. And Sens. Lamar Alexander and Richard Burr released a white paper in January espousing many of the same programs.