108th Congress

Appropriations for the National Institutes of Health, Fiscal Year 2004

H.R. 2660/H. Rept. 108-188, S. 1356/S. Rept. 108-81, H.R. 2673/H. Rept. 108-401

Background

The President’s budget request for the National Institutes of Health (NIH) for fiscal year (FY) 2004 to the House Appropriations Subcommittee on Labor, Health and Human Services (HHS) and Education was $27,664 million. The FY 2004 total level (program level) for NIH was $27,893 million, an increase of $549 million or 2 percent more than the FY 2003 amended President’s Budget. Included in this request was $79 million requested from the House Appropriations Subcommittee on VA, HUD and Independent Agencies for the Superfund research program (National Institute of Environmental Health Sciences [NIEHS]) and $150 million for the Type 1 Diabetes Initiative appropriated through P.L. 107-360.

As for FY 2003, there was no appropriations legislation passed and signed before Congress adjourned the first session of the 108th Congress. As a result, a number of continuing resolutions were enacted to keep Federal agencies, including NIH, operating until final appropriations legislation was signed.

1. Continuing Resolution (through 10/31/03) P.L. 108-84 9/30/03
2. Continuing Resolution (through 11/17/03) P.L. 108-104 10/31/03
3. Continuing Resolution (through 11/21/03) P.L. 108-107 11/7/03
4. Continuing Resolution (through 1/31/04) P.L. 108-135 11/22/03

On December 8, 2003, the House passed the conference report for H.R. 2673, the Agriculture Appropriations, FY 2004 (the Omnibus Appropriations, FY 2004) by a vote of 242 to 176. This bill contains Governmentwide funding provisions for seven separate appropriations bills including Labor, Health and Human Services and Education (H.R. 2660), which funds NIH; Transportation and Treasury (H.R. 2989); Foreign Operations (H.R. 2800); Commerce-Justice-State (H.R. 2799); District of Columbia (H.R. 2765); Veterans, Housing and Urban Development (VA-HUD) (H.R. 2861); and Agriculture (H.R. 2673). If the bill is enacted, NIH would receive $27.747 billion, $780 million more than in FY 2003, including NIEHS funding from VA-HUD. Also included is a 0.59 percent across-the-board cut that applies to non-defense programs. The bill includes a 2.2-percent program evaluation tap as proposed by the Senate for the U.S. Department of Health and Human Services (HHS), affecting NIH.

Provisions of the Legislation/Impact on NIH

MAJOR FEATURES OF THE CONSOLIDATED APPROPRIATIONS ACT, FY 2004 (H.R. 2673)

Division E—Labor, Health and Human Services and Education, and Related Agencies Appropriations, FY 2004

Funding: NIH would receive about $27.747 billion, approximately $780 million more than in FY 2003, after various rescissions and transfers. This 2.9-percent increase includes funding from Labor, HHS, and VA-HUD.

Global AIDS Transfer: The National Institute of Allergy and Infectious Diseases (NIAID) would make available $150,000,000 to International Assistance Programs, “Global Fund to Fight HIV/AIDS, Malaria, and Tuberculosis,” an increase of $50 million, all to remain available until expended.

Extramural Facilities Construction: $119,220,000 is designated for extramural facilities construction from the National Center for Research Resources (NCRR).

Director of NIH’s Transfer Authority: Continues the Director of NIH’s 1-percent transfer authority and the 3-percent AIDS transfer by the Director of NIH and Director of Office of AIDS Research (OAR). These funds are determined jointly by these Directors and allocated directly to OAR for distribution to the NIH Institutes and Centers (ICs).

Evaluation Tap: Includes Senate bill language authorizing the transfer of up to 2.2 percent of Public Health Service (PHS) funds for evaluation activities.

Secretary’s Transfer Authority: Continues the transfer of not more than 1 percent between appropriations and the limitation that no appropriation can be increased by more than 3 percent by the transfer. With House and Senate approval, an appropriation can increase by an additional 2 percent.

Human Embryo Research (HER): Retains HER prohibition language identical to the FY 2003 Labor, HHS and Education Appropriations bill.

Consolidation: As a replacement for the Senate language on the HHS consolidation plan, the conference report includes the following: “The conferees direct the Secretary to provide a report identifying the benchmarks HHS is using to measure the speed and cost of its human resources transactions, comparing those benchmarks as of October 1, 2003, to Fiscal Year 2004 Department performance on a semi-annual basis. The conferees expect data in the report that would indicate the average and median length of time to post positions, the average and median length of time to complete hiring, the percentage of applicants accepting the position when offered, the number of transactions assigned per human resource full-time employee (HER), and the estimated cost per transaction.”

Congressional Requests: Continues Senate language (and FY 2003 language) that directs that “specific information requests from the chairmen and ranking members of the Subcommittees on Labor, Health and Human Services and Education, and Related Agencies, on scientific research or any other matter, shall be transmitted to the Committees on Appropriations in a prompt, professional manner and within the time frame specified in the request. The conferees further direct that scientific information requested by the Committees on Appropriations and prepared by Government researchers and scientists be transmitted to the Committees on Appropriations, uncensored and without delay.”

NIH Roadmap Initiative: The conference agreement includes language proposed by the Senate authorizing the Director of NIH to enter into a specific type of agreement to carry out a portion of the NIH roadmap initiative. “This provision has been included to assess the merits of this funding approach and to demonstrate whether this funding mechanism would accelerate the research agenda. The conferees direct the Director of NIH to enter into these agreements solely on the basis of scientific merit, opportunity for medical breakthroughs, and urgency of need. It is the conferees’ intent that these funds be obligated solely at the discretion of the Director of NIH. The conferees understand that all awards would be subject to a competitive process. The language in this Title appropriating funds for the Office of the Director of NIH includes a limitation of $7,500,000 which may be used under the authority created in this general provision. This $7.5 million represents only a portion of the $35 million contained in the Director’s Discretionary Fund for NIH roadmap activities (which total $128 million in FY 2004).”

Building 33: Report language states: “Due to extensive community concerns about the proposed construction of a BSL-3 lab on NIH’s main Bethesda, MD, campus, the conferees expect NIH to 1) submit a report to the Senate and House Appropriations Committees within 60 days of enactment of this Act detailing the reasons why NIH believes the lab should not be built at Fort Detrick, MD, 2) provide the community with detailed information regarding ongoing risk assessments and proposed safety policies to protect NIH employees and the local community, and 3) provide a mechanism for ongoing involvement between NIH and the local community to provide information about lab safety, research, and activities.”

Foundation: $500,000 is provided for the NIH Foundation.

Extramural Salary Cap: Retains Executive Level I Salary Cap as in FY 2003.

Wellstone Centers: Includes a general provision proposed by the Senate designating the NIH Muscular Dystrophy Centers as Senator Paul D. Wellstone Muscular Dystrophy Cooperative Research Centers

Wyden Amendment: Includes a Senate provision requiring the Director of NIH to report to Congress, no later than 90 days after enactment of this Act, on NIH’s role in promoting the affordability of inventions and products developed from Federal funds.

Reduction in Administrative Expenses: “Administrative and related expenses for departmental management for Labor, HHS, and Education are to be reduced on a pro rata basis by $50,000,000.” No later than 15 days after the enactment of this Act, the Director of the Office of Management and Budget is to report to the House and Senate Committees on Appropriations the accounts subject to the pro rata reductions and the amount to be reduced in each account. Note: The figures cited earlier do not reflect this reduction. For NIH, the reduction would be $17.492 million.

Across-the-Board Reduction: “The conference agreement includes a rescission of $1,800,000,000 funds made available to the Department of Defense and made available in P.L. 107-38 and P.L. 107-117, as well as a 0.59 percent across-the-board rescission to discretionary budgetary resources provided in Fiscal Year 2004 regular appropriations Acts (except Defense and Military Construction), as well as to any previously enacted Fiscal Year 2004 advance appropriation.” The $27.747 billion reflects this reduction, which totaled $165 million for NIH.

NIEHS (from the VA-HUD portion of this measure): The bill would appropriate $78,744,000 for NIEHS to carry out activities set forth in section 311(a) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, and section 126(g) of the Superfund Amendments and Reauthorization Act of 1986.

Division B—Commerce, Justice, and State, and the Judiciary, and Related Agencies Appropriations, FY 2004 (General Provisions)

Stem Cells: The conferees included a provision prohibiting funds to process patents of human organisms. The conferees concurred with the intent of these provision as expressed in the colloquy between the provision’s sponsor in the House and the Ranking Minority Member of the House Committee on Appropriations as occurred on July 22, 2003, with respect to any existing patents on stem cells.

Division D—Foreign Operations, Export Financing, and Related Programs Appropriations, FY 2004

HIV/AIDS: The conference agreement contains language that would provide $28 million for research on and testing of HIV/AIDS vaccines; these funds are to be allocated by the Global AIDS Coordinator, U.S. Department of State, to the International AIDS Vaccine Initiative. Of this amount, the managers specified that $10 million must be used for “cooperative projects coordinated with the European Union’s new 5-year program, the AIDS Vaccine Integrated Project, and in cooperation with the Partnership for AIDS Vaccine Evaluation (PAVE) operating under the aegis of the Department of Health and Human Services.” PAVE is a partnership, facilitated by the National Institute of Allergy and Infectious Diseases, between the three U.S. governmental agencies involved in clinical HIV/AIDS vaccine research.

Division F—Transportation, Treasury and Independent Agencies Appropriations, FY 2004

(All relevant NIH provisions are included in their entirety in a separate article entitled “Appropriations for Transportation, Treasury and Independent Agencies, Fiscal Year 2004.”)

New Provisions in FY 2004:

• A-76/Competitive Sourcing: The conference agreement includes language within a general provision that “prohibits the use of funds to convert an activity or function of an Executive agency to contractor performance, with certain exceptions.” This measure will require agency heads to submit a detailed report to Congress on their competitive sourcing activities. It allows agencies to use appropriated funds to monitor and carry out A-76 activities. It prohibits agencies from selecting a contractor at a location outside the United States. The provision also includes the following: “The head of an executive agency may not be required, under Office of Management and Budget Circular A-76 or any other policy, directive, or regulation, to automatically limit to 5 years or less the performance period in a letter of obligation, or other agreement, issued to executive agency employees, if such a letter or other agreement was issued as the result of a public-private competition conducted in accordance with the circular.”
• Locality Pay Areas: Prohibits the use of funds to implement or enforce regulations for locality pay areas that are inconsistent with Federal Salary Council recommendations.
• International Acquisitions: Requires a report from each Federal agency on acquisitions from entities that manufacture articles, materials, or supplies outside the United States.
• Details: Prohibits the use of appropriated funds to implement, administer, or enforce the proposed Office of Personnel Management (OPM) regulations relating to the detail of executive branch employees to the legislative branch. The proposed regulations seek to set forth guidelines for executive branch detailees to the legislative branch and would require that all detailees be reviewed and approved by OPM, limit the tenure of details to 180 days (renewable only once), and require agencies to submit a semiannual report describing each detail, assignment, or instance of making available an agency employee for the performance of functions within or under the supervision of the legislative branch.
• COLA/Pay Raises for Federal Employees: Provides for a 4.1-percent increase in the adjustment in rates of basic pay for the statutory pay systems that takes effect in FY 2004 and shall be effective as of the first day of the first applicable pay period beginning on or after January 1, 2004. Funds to carry out this requirement will be paid from each applicable department for salaries and expenses for FY 2004.

Division G—VA, HUD, and Independent Agencies Appropriations, FY 2004

NIEHS: The bill would appropriate $78,744,000 for NIEHS to carry out activities set forth in section 311(a) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, and section 126(g) of the Superfund Amendments and Reauthorization Act of 1986.

See attached comparison chart of House, Senate, and Conference provisions.

Status and Outlook

The Senate did not take up this Omnibus measure before it adjourned. Majority Leader Bill Frist (R TN) filed a cloture motion to limit debate on the measure with a vote set for 2:30 p.m. on January 20, 2004, the day Congress reconvenes for the second session. In the interim, Federal agencies that would be funded through this Omnibus measure will operate at FY 2003 levels, as provided for in P.L. 108-135, through January 31, 2004.

HOUSE AND SENATE ACTIONS

H.R. 2660 Markup: On June 19, 2003, the House Appropriations Subcommittee on Labor,HHS and Education reported the FY 2004 Labor,HHS and Education appropriations bill, which would have provided $27,663,991,000 for NIH, $681,387,000 more than in FY 2003. The House Committee on Appropriations called this an increase of approximately 7 percent, based on one time costs in FY 2003; however, it represented about a 2.2-percent increase in actual dollars. The Subcommittee markup was identical to the FY 2004 President’s Budget.

House Floor Action: On July 10, 2003, the House passed H.R. 2660, the Departments of Labor,HHS, and Education, and Related Agencies Appropriations Act for Fiscal Year 2004, by a vote of 215 to 208, at the House-reported levels. Two significant NIH-related amendments that were offered, both of which were defeated, are described below:

• Representative David R. Obey (D-WI) offered an amendment that failed by a vote of 197 to 224. This amendment would have increased funding for several programs in the bill, including NIH. It would have provided funds to NIH that would have doubled the House-reported level of a 3-percent increase over FY 2003 to 6 percent.
• Representative Pat Toomey (R-PA) offered an amendment that failed by a narrow vote of 210 to 212. The amendment would have prohibited funding for five specific NIH funded human development grants.

S. 1356 Markup: On June 25, 2003, the Senate Appropriations Subcommittee on Labor,HHS and Education held its FY 2004 markup, with full Committee action on June 26. The reported level for NIH for FY 2004 was $27,990,804,000, a $1 billion increase over FY 2003 and $326,813,000 more than the President’s budget request. On September 10, 2003, the Senate passed H.R. 2660 by a vote of 94 to 0. Senator Arlen Specter (R-PA), Chair of the Senate Appropriations Subcommittee on Labor,HHS and Education, introduced an amendment that had the effect of keeping the bill number of the House-passed bill but inserting the text of the Senate-reported bill, S. 1356. All subsequent amendments then applied to the Senate-reported text. A Specter-Harkin-Feinstein-Collins amendment to add $1.5 billion to the NIH budget was debated but was defeated (52 to 43) since 60 aye votes were required to override the budget resolution. A point of order had been raised by Senator Don Nickles (R-OK), Chair of the Senate Committee on the Budget.

A number of NIH-related amendments were included in floor action in the Senate-passed bill:

• Pediatric Research Initiative: Senator Mike DeWine (R-OH) offered a Sense of the Senate amendment to encourage NIH to continue implementation of the Pediatric Research Initiative. The amendment would require NIH to emphasize the importance of pediatric research, including translational research, and is identical to S. 1579, which Senator DeWine introduced on September 3, 2003.
• Wellstone Centers: Senator Tom Harkin (D-IA) offered an amendment to name the NIH-supported Muscular Dystrophy Centers of Excellence required by the Muscular Dystrophy Community Assistance, Research, and Education Amendments of 2001, for deceased Senator Paul Wellstone (D-MN).
• Affordability of Inventions: Senator Ron Wyden (D-OR) offered an amendment requesting an NIH report containing NIH recommendations to promote the affordability of inventions and products developed with Federal funds and specifying whether any circumstances exist to prevent the Director from promoting the affordability of inventions and products developed with Federal funds.
• Roadmap Authority: Senator Ted Stevens (R-AK) offered an amendment that would provide authority under a 1-year pilot program for the Director of NIH to use the Director’s Discretionary Fund authority to enter into transactions other than contracts, cooperative agreements, or grants for research in support of the NIH Roadmap Initiative of the Director. This authority, similar to the authority provided to the U.S. Department of Defense’s Defense Advanced Research Projects Agency, comes with specific language requiring competition and scientific review.
• Across-the-Board: Senators DeWine and Rick Santorum (R-PA) also sponsored an amendment to add $61 million for AIDS in Africa (mother-to-child transmission). Senator Specter accepted the amendment, and the offset will be an across-the-board cut in administrative costs for the U.S. Departments of Labor,HHS, and Education.