President Barack Obama will unveil an ambitious budget blueprint on Monday that pays little heed to the constraints of dealing with a Republican-controlled Congress. The proposal will include new healthcare initiatives aimed at combating diseases, fighting antibiotic-resistant bacteria and overhauling the payment system for Medicare.
The president wants to reverse cuts that were part of the sequestration deal hatched with Republicans and that have defined an era of fiscal austerity in Washington. Obama is expected to propose increasing annual spending by roughly $70 billion, or 7%, over the current fiscal year.
“I'm pleased to see that the president is getting out front on the sequestration message and what it's going to mean to our country if we don't deal with it,” said Jennifer Zeitzer, director of legislative relations with the Federation of American Societies for Experimental Biology.
The budget proposal is another sign that Obama doesn't intend to cede the agenda to Republicans despite his lack of allies on Capitol Hill and lame-duck status. The president has previously signaled that he'll take an aggressive stance in vetoing any legislation that he perceives as harming the Patient Protection and Affordable Care Act.
In the past two years, appropriations fights have operated within the framework of the budget deal negotiated by Sen. Patty Murray (D-Wash.) and Rep. Paul Ryan (R-Wis.). That has shielded federal agencies, including the National Institutes of Health and the Food and Drug Administration, from some of the more severe cuts that would have taken place under the sequestration framework.
“Now what we're back to is what I've been referring to as budget thunderdome,” Zeitzer said. “We do not have the blanket of Ryan-Murray to keep us warm and safe.”
On Friday, Obama announced details of the Precision Medicine Initiative, aimed at combating cancer and other diseases through biomedical research. The president is initially seeking $215 million for the fiscal year that begins on Oct. 1.
“The possibilities are boundless,” Obama said in an address from the White House. “The time is right to unleash a new wave of advances in this area.”
The president is also proposing to spend $1.2 billion next year to combat antibiotic-resistant bacteria, nearly doubling current resources. The CDC estimates that 2 million illnesses and 23,000 deaths can be attributed to antibiotic-resistant bacteria in the U.S. annually.
HHS Secretary Sylvia Mathews Burwell announced last week that the administration would be moving aggressively toward value-based payment models in Medicare. The Obama administration is seeking to have 30% of Medicare spending tied to payment systems such as accountable care organizations or bundled payment, with that threshold rising to 50% two years later.
The president's budget proposal is certain to be a non-starter with Republicans. They continue to emphasize the perils of long-term deficits and the need for fundamental changes to major programs such as Medicare and Medicaid.
“It's irrelevant,” said one veteran healthcare lobbyist of the president's proposal. “Honestly, it means nothing.”
But Even if Obama's budget proposal is ignored by congressional Republicans, that doesn't mean it won't have some relevance to the budget debate in Washington. Republicans will eventually have to pass a budget that the president will sign into law.
That means that some of the fine print in Obama's proposal will be scrutinized to look for common ground. Some of the healthcare cuts backed by Obama, in particular, could be attractive to Republicans seeking to reduce overall spending. Last year's budget proposal, for example, included $53 billion in savings through increasing income-based premiums for Medicare. That's a policy that has broad support among Republicans.
“The president's proposal should not ever be dismissed,” said Eric Zimmerman, a principal with McDermott + Consulting. “It signals where Congress won't have a fight on its hands.”
Follow Paul Demko on Twitter: @MHpdemko
