Let the U.S. Government Budget Games Begin!

Now that the U.S. government’s budgetary pencil dust has settled a bit, we can see features of President Obama’s proposed 2011 budget worthy of praise, as well as some budget gimmickry.

For example, the President proposed an increase in Food and Drug Administration (FDA) food safety funding from $1.049 billion in FY 2010 to $1.368 billion in FY 2011—a whopping 30% increase on top of substantial increases the two previous years. This would boost the recent influx of new FDA personnel with an additional 718 Full-Time Equivalents (FTEs) for food safety activities.

Sounds great, but will it happen? Look more closely. Only 25% of the proposed increase in funding is supported by a request in appropriations. The budget “assumes” that Congress will enact fees on regulated industry that will provide the remainder of the proposed funding. Other Presidents have used this ploy, with the “assumed” funding never being realized. Thus, a “proposal” in the eyes of the Administration may be a “gimmick” in the eyes of Congress.

While some new fees on regulated industry seem likely to be enacted this year as part of Food Safety legislation, there are mounting concerns about such fees hurting U.S. competitiveness and, therefore, jobs. At any rate, it is highly unlikely that such fees would generate the “assumed” revenues in FY 2011.

In the U.S. Department of Agriculture (USDA) budget, proposed funding for the USDA Food Safety and Inspection Service (FSIS) is flat—$1.037 billion in FY 2011, up from $1.019 billion in FY 2010, but a modest level of fees on regulated industry is “assumed” here as well.

The USDA research budget would include the following increases in food research:

• $11 million for food safety research (above $158 million in FY 2010).
• $54 million for obesity-related research efforts (above $69 million in FY 2010).
• $20 million for National Institute of Food and Agriculture efforts to improve food safety through new and improved rapid detection methods, pre- and post-harvest epidemiological studies, and improved food harvesting and processing technologies.
• $5 million in the Agricultural Research Service budget to develop and validate integrated science-based management practices to prevent preharvest contamination of produce by eneteric pathogens; develop postharvest intervention strategies to eliminate any pathogen contamination; and develop and validate detection and sensing technologies.

In the context of a freeze on federal discretionary spending, how are these increases funded? For the most part, proposed new spending would be offset by the complete elimination of all congressional funding initiatives. Good luck with that.

There is an old saying in Washington: the President proposes; the Congress disposes.

USDA budget summary (pdf)
FDA press release

John Bode
Principal Attorney
Olsson Frank Weeda Terman Bode Matz PC