Policy Corner: Congress Raises Debt Ceiling, Lays Out Deficit Reduction Plans


Just hours before the U.S. Treasury Department was set to reach the end of its borrowing authority, Congress reached a deal to raise the debt ceiling and also provide for major reductions in long-term federal spending. Although plans for where reductions in federal spending will occur will not be ironed out until a special 12-member Congressional "Super Commission" completes its work in November, the final bill provided for raising the debt ceiling through early 2013 and mandated at least $2.1 trillion dollars in deficit reduction over the next decade. After lengthy battles, the House and Senate finally approved the bill by wide margins.

Speculation about which federal programs will be targeted for the deepest cuts is already underway in Washington. Under the deal, discretionary spending—which funds the NIH, NSF, CDC and other science agencies—will be slashed by $21 billion in 2012. Over the next ten years, discretionary spending levels will be further reduced by nearly a trillion dollars, forcing every federal agency to look hard at its priorities.

As one example, the substantial majority of the NIH’s $30 billion annual budget supports multi-year research grants, rather than administrative expenses, meaning that budget reductions will lead to cuts in the number and size of future grant awards. The same is true of most research programs at CDC and other science agencies.

The Obama administration has stated that support for scientific research and innovation-related investments is one of its highest priorities, but everything will have to be on the table in the coming years as Congress will continue to grapple with reducing the federal budget deficit. To learn how you can become more involved in engaging your federal legislators on budgetary issues, please email policy@acsm.org.