Discretionary Spending

Function 550 - Health

Reduce or Constrain Funding for the National Institutes of Health

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

(Billions of dollars) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014-2018 2014-2023
  Restrict the Growth of Funding to 1 Percent a Year
Change in Discretionary Spending                        
  Budget authority 0 -0.2 -0.6 -1.0 -1.4 -1.8 -2.3 -2.7 -3.1 -3.6 -3.1 -16.7
  Outlays 0 * -0.2 -0.6 -1.0 -1.4 -1.8 -2.3 -2.7 -3.1 -1.9 -13.1
    Reduce 2015 Funding and Allow Growth at the Rate of Inflation
Change in Discretionary Spending                        
  Budget authority 0 -3.2 -3.3 -3.3 -3.4 -3.5 -3.6 -3.7 -3.7 -3.8 -13.2 -31.5
  Outlays 0 -0.8 -2.6 -3.1 -3.3 -3.4 -3.5 -3.6 -3.6 -3.7 -9.8 -27.6

Notes: This option would take effect in October 2014.

* = between -$50 million and zero.

The budget of the National Institutes of Health (NIH) has grown significantly over the past 15 years, primarily because of the large increases in NIH’s appropriations (or budget authority) during the 1998–2003 period, when funding nearly doubled. In addition, NIH received $10 billion in supplemental funding provided in the American Recovery and Reinvestment Act of 2009. In 2012, NIH accounted for nearly half of all nondefense discretionary spending for research and development.

This option consists of two alternatives that would reduce NIH’s appropriations relative to the amounts in the baseline budget projections of the Congressional Budget Office. One alternative would restrict the rate of growth in appropriations to 1 percent per year. That alternative would reduce projected appropriations by $17 billion from 2015 through 2023, thereby decreasing federal outlays by $13 billion, CBO estimates. The other alternative would reduce NIH’s 2015 appropriation to the amount provided in 2003, the last year in which NIH had a large increase in its appropriation; after 2015, funding would grow at the rate of inflation assumed in CBO’s baseline projections. That one-time cut of about 11 percent would decrease projected appropriations by $32 billion from 2015 through 2023, thus reducing federal outlays by $28 billion over that period.

An argument in support of this option is that such reductions would encourage increased efficiencies throughout NIH and more careful focus on priorities that will provide the greatest benefits. NIH has 27 institutes and centers that fund research on a wide array of health-related topics. In addition, it supports more than 300,000 scientists and research personnel affiliated with more than 3,100 organizations worldwide. Furthermore, spending by NIH nearly tripled from 1997 to 2010. With such a broad range of personnel and activities and a large increase in funding, inefficiencies and duplicative or wasteful efforts are likely. In a 2009 report, the Government Accountability Office “found gaps in NIH’s ability to monitor key aspects of its extramural funding process.” Thus, some costs could probably be reduced or eliminated without harming high-priority research.

An argument against this option is that much of NIH’s funding supports research that may improve people’s health, thus enhancing people’s well-being and providing economic benefits as well. NIH is a major source of funding for academic biomedical research (more than 80 percent of NIH’s funding supports extramural research activities, which are not conducted by NIH staff or on the main NIH campus). Consequently, deep cuts to its budget could disrupt funding for programs already under way, both on and off the campus, and could discourage future researchers from doing academic biomedical research. Furthermore, although having more focused priorities is beneficial, it is difficult to know in advance which projects will yield the most useful results. Large cuts to the NIH budget could discourage innovation in agency-supported medical technologies that have the potential to improve people’s health.