BREAKING NEWS: Trump Administration’s Proposed Federal Budget Includes a 17.9-Percent Budget Cut to HHS
The federal budget proposal that the Trump administration announced on March 16 includes major cuts to non-defense spending, including a $15.1 billion cut to the annual budget of the Department of Health and Human Services (HHS). It also includes a provision folding the Agency for Healthcare Quality and Research (AHRQ) into the National Institutes of Health (NIH). At the time of the publication of this news article, it was not known what the proposed budget would be for the Office of the National Coordinator for Health IT (ONC), which resides within HHS alongside the Centers for Medicare & Medicaid Services (CMS).
Released publicly early on Thursday morning, the Trump administration’s budget proposal carries the title “America First: A Budget Blueprint to Make America Great Again.” A qualitative title itself is a break from past practice. The budget proposal aims at increasing defense spending by $54 billion, to $639 billion in FY 2018 over $587 billion in FY 2017, while cutting the vast bulk of domestic spending, through $54 billion in cuts to non-defense spending. With regard to HHS, the 2018 budget proposal requests $69.0 billion for that department, which represents a $15.1 billion, or 17.9-percent, decrease from fiscal year 2017.
With regard to the 21st Century CURES Act, that program is excluded from cuts, and actually sees additional funding.
As the White House’s “Blueprint” notes, the administration’s proposal “[r]educes the National Institutes of Health’s (NIH) spending relative to the 2017 annualized CR level by $5.8 billion to $25.9 billion. The Budget includes a major reorganization of NIH’s Institutes and Centers to help focus resources on the highest priority research and training activities, including: eliminating the Fogarty International Center; consolidating the Agency for Healthcare Research and Quality [AHRQ] within NIH; and other consolidations and structural changes across NIH organizations and activities. The Budget also reduces administrative costs and rebalance federal contributions to research funding.”
The “Blueprint” includes no specific information regarding CMS or ONC, and it was not possible to obtain information on those agencies’ proposed budgets. One informational source who is not inside the federal government but who has extensive contacts with the government, told Healthcare Informatics that OMB officials had prepared the budget without any consultation with anyone within CMS or ONC. It was not possible to have that confirmed or denied by anyone in the federal government.
With regard to the $54 billion in proposed cuts to domestic spending that are intended to offset $54 billion in proposed increases in defense spending, President Donald J. Trump said in a statement, “The core of my first Budget Blueprint is the rebuilding of our Nation’s military without adding to our Federal deficit. There is a $54 billion increase in defense spending in 2018 that is offset by targeted reductions elsewhere. This defense spending is vital to rebuilding and preparing our Armed Forces for the future. We must ensure that our courageous servicemen and women have tools they need to deter war, and when called upon to fight, do only one thing: Win. In these dangerous times, this public safety and national security Budget Blueprint is a message to the world—a message of American strength, security, and resolve.”
Meanwhile, Mari Savickis, vice president of federal affairs at the Ann Arbor, Mich.-based College of Healthcare Information Management Executives (CHIME), told Healthcare Informatics Thursday morning that “We are in the process of going through the just-released ‘skinny budget,’ but there isn’t anything about ONC in there, at first glance. The thing is, ONC has been given a tremendous amount of responsibility in the 21st Century Cures Act, so this ‘interoperability’ thing we are dealing with is something that’s needed to support the healthcare industry as a whole. So it’s hard to imagine ONC would just completely disappear; that seems fairly unlikely,” the Washington, D.C.-based Savickis said. “But it’s also hard to tell [what will happen], when you are seeing such sizable proposed cuts coming out of the administration. Right now, CHIME has cause for optimism. There are a lot of health IT provisions in the Cures Act, and it speaks to the larger issue—that the Administration wants to see savings. And in part, that’s driven by having a good technical infrastructure. It’s hard to see anyone disagreeing with that.”
But the Bethesda, Md.-based American Medical Informatics Association (AMIA) issued a statement by its vice president of public policy, Jeffrey Smith, that was more openly critical. “Specific to the HHS proposals, this budget would hinder our national capacity to advance discovery and deploy better cures for patients, faster,” Smith said in the statement. “The NIH cuts undermine the promises Congress made as part of the 21st Century Cures Act, and the dissolution of AHRQ severely hampers our collective ability to improve care delivery at a national level,” the AMIA statement continued. “It’s hard to see how programs like Precision Medicine, the Cancer Moonshot or the BRAIN Initiative can deliver on their potential with a 20 percent cut to NIH. Basic research done at the bench in universities across the country is interconnected to treatments delivered at the bedside. So, even targeted cuts at one end of the discovery spectrum will impact the whole.”
The statement went on to say that “AMIA is committed to working with the White House and with Congress to ensure they keep their commitments to fully funding research at the levels outlined in the Cures Act, and to ensure policymakers understand the vital role research at the NIH, FDA, CDC, and AHRQ plays in improving the health of all Americans. We believe that gains in efficiency and cost savings can be achieved without such drastic cuts, and we look forward to demonstrating the role informatics can play towards the goals of improved care, better outcomes and lower costs. AMIA will be hosting a briefing on Capitol Hill in early April for policymakers to learn about the role we play in advancing our nation’s healthcare priorities and what additional steps are needed to accelerate the promise of health IT.”
Major conflict may be ahead on Capitol Hill
Of course, the “Blueprint” proposed by the White House is inevitably just a starting point, as Congress will get to work developing a full federal budget. And this particular budget blueprint, with its very large increase in defense spending offset by an equally large set of cuts to domestic spending, will inevitably face some opposition—some of it from both parties in Congress.
As Damian Paletta and Steven Mufson noted in their Washington Post news article Thursday morning, “Many of Trump’s budget proposals are likely to run into stiff resistance from lawmakers on Capitol Hill, even from Republicans, whose support is crucial because they must vote to authorize government appropriations. Republicans have objected, for example, to the large cuts in foreign aid and diplomacy that Trump has foreshadowed, and his budget whacks foreign aid programs run by the Education, State and Treasury departments, among others.” Paletta and Mufson quoted Sen. Marco Rubio (R.-Fla.) as saying, “The administration’s budget isn’t going to be the budget. We do the budget here. The administration makes recommendations, but Congress does budgets.”
Paletta and Mufson also note in their article that “Trump’s budget would not take effect until the new fiscal year on Oct. 1, but the president must still reach a separate agreement with Congress by the end of April, when a temporary funding bill expires. If they can’t reach an agreement, and if Trump’s new budget plan widens fault lines, then the chances would increase for a partial government shutdown starting on April 29.”
Meanwhile, in their news report for The New York Times, and Alan Rappeport Glenn Thrush note, “The chances of Mr. Trump’s first budget passing Congress in its current form are slim. Many of the proposals would be nonstarters for Democrats, and some would be problematic for Republicans. The proposed $54 billion increase in military spending — a 10 percent increase — would also require a repeal of spending caps imposed by the 2011 Budget Control Act; Democrats oppose such a move without equal spending increases for domestic programs.”
And the Post’s Paletta and Mufson write that “Parts of the budget proposal also appear to contradict Trump's agenda. Trump has said he wants to eliminate all disease, but the budget chops funding for the National Institutes of Health by $5.8 billion, or close to 20 percent. The brunt of the cuts at the Department of Health and Human Services would be at the National Institutes of Health, the country’s medical research hub. The $403 million currently used for training nurses and other medical professionals would also be eliminated.”
There is much that is not yet known, as this “skinny budget,” as it is being called, includes far less information than is normal in a White House budget proposal. Much will have to emerge over time. In that context, and with regard to Medicare spending, Treasury Secretary Steven Mnuchin had told Fox News Channel’s “Sunday Morning Futures” program on Feb. 26, that the administration’s budget would make no cuts to the Medicare or Social Security programs. As David Lawder of U.S. News reported that day, via Reuters, Mnuchin said, “We are not touching those now. So don't expect to see that as part of this budget. We are very focused on other aspects and that's what's very important to us. And that's the president's priority,” Mnuchin said, according to a transcript provided by Fox News. During the presidential election campaign, then-candidate Trump had promised not to cut Social Security, Medicare, or Medicaid.
Healthcare Informatics will continue to update readers as this developing story unfolds.
