“NO” on Revised 21st Century Cures Act (H.R. 34)

UPDATE (11/30): While the likely adoption of the manager’s amendment will address isolated problems within the bill — i.e., the Family First Prevention Services Act of 2016 — it would not change the gimmicky nature of the pay fors, the newly creating funding mechanism designed to bypass spending caps, or the overall level of spending. Unfortunately, members will not be given the opportunity to make additional changes to the bill. Heritage Action will continue to oppose the 21st Century Cures Act and will include it as a key vote on our legislative scorecard.

On Wednesday, the House of Representatives is expected to vote on an updated version of the 21st Century Cures Act (H.R. 34), sponsored by Rep. Fred Upton. The 21st Century Cures Act was originally a bill that provided additional funds to the National Institutes of Health (NIH) for medical research and the Food and Drug Administration (FDA) for accelerated approval of new treatments.  When the House voted on the original version of the Cures Act earlier this year, Heritage Action key voted against the bill because it created new mandatory spending, despite the fact the government is over $19 trillion dollars in debt.  Heritage Action argued that:

“Conservatives are rightly concerned about the amount of the federal budget that is classified as “mandatory” (also known as “direct” or “autopilot” spending). Many budget reform ideas put forward by conservatives throughout the years have sought to incorporate more of the federal budget into the normal, annual, discretionary budget process, so that spending programs have to re-justify themselves every year and so Congress must re-prioritize spending as new information and priorities present themselves. H.R. 6 moves in the opposite direction.

“What’s more, the NIH already has a standard discretionary funding stream, and Congress can decide to increase spending to those accounts within the BCA caps. In fact, both the relevant House and Senate Appropriations Committees bills contain spending increases for NIH as part of bills that cut spending elsewhere in order to maintain overall spending reductions from FY15.  That represents Congress making necessary spending choices – the exact kinds of spending choices this bill would allow future appropriators to avoid making.”

Though the original version of Cures ultimately passed the House, with 70 Conservatives rightly voting against the bill, it was never considered by the Senate.  

Now Congress has taken this legislation, which was initially a 300 page bill, and turned it into an almost 1,000 page omnibus health care spending bill. The negotiators have added pieces of a mental health bill, makes changes to Medicare Part A and B, another bill making significant changes to the federal foster care system, a “cancer moonshot” requested by Vice President Biden, additional funding for opioid abuse prevention, etc., in addition to the NIH funding and the FDA funding, for a grand total of over $6.3 billion dollars. In Washington terms, backroom negotiators have turned the Cures bill into a Christmas Tree, loaded with handouts for special interests, all at the expense of the taxpayer.  Therefore, conservatives should oppose the 21st Century Cures Bill for four main reasons.

First, the bill’s “pay-fors” rely on budget gimmicks, and even worse, the new spending is not subject to the budget caps. The proponents of the Cures Act will argue that the bill is paid for in real dollar-for-dollar cuts.  But when the federal government is $19 trillion in debt, just because new spending is paid for, doesn’t mean that it should be done.  

Additionally, the manner in which the new NIH, FDA, and opioid spending is “paid for” doesn’t hold up under close scrutiny.  The legislation assumes $3.5 billion in savings by rescinding funds the Prevention and Public Health Fund (PPHF), a slush fund created by the Affordable Care Act (ACA).  However, just last year, the House and Senate voted to repeal the ACA and rescind ALL of the funds from the PPHF.  Moreover, if the Republican Congress is committed to repealing Obamacare next year under President Trump, they shouldn’t be assuming that the PPHF will be in existence and able to be used as a piggy bank to pay for new spending.  For a Republican Congress to argue that the PPHF can be used for savings to apply to new spending, in between two votes to repeal and rescind all of available funds in the PPHF, is an argument for having their cake and eating it too.

The other main “gimmick” in the “savings” section is the use of a three-year drawdown and sale of crude oil from the Strategic Petroleum Reserve (SPR). As Heritage Budget expert Justin Bogie has argued:

“The SPR shouldn’t be used as a piggy bank for new spending programs; if and when it is deemed appropriate to sell off a portion of the SPR then it should go toward debt reduction. If Congress wants to fund the NIH innovation fund or increase spending for opioid abuse, etc., then they should do so through prioritizing pre-existing discretionary funds.”

Even worse than the gimmicky offsets is the manipulation of the funding streams to avoid the Budget Control Act (BCA) Caps and true fiscal accountability.  Under the sections creating each new fund, the bill states that “the total amount of such appropriations for the applicable fiscal year (not to exceed the total amount remaining in the account) shall be subtracted from the estimate of discretionary budget authority and the resulting outlays for any estimate under the Congressional Budget and Impoundment Control Act of 1974 or the Balanced Budget and Emergency Deficit Control Act of 1985, and the amount transferred to the Account shall be reduced by the same amount.” This means that the amounts transferred and appropriated in a given fiscal year would not count towards the total discretionary funding total. This would be a way to circumvent the BCA caps and add additional discretionary spending through 2021.

In other words, the Cures Act authorizes what is essentially mandatory spending by another name, or discretionary-spending-in-name-only.  In a time when what our government, and our taxpayers, need most is real mandatory spending reductions that generate net deficit reduction, the Cures Act instead takes mandatory savings and then redirects it to new discretionary spending, all while avoiding the BCA caps.  As Heritage Action argued in our first key vote against Cures: “There is no excuse for evading the BCA caps.” The same holds true today, there was no excuse to evade the BCA caps then, and certainly not now. It cannot be overstated: passing a Cures Act that includes this funding mechanism to avoid the BCA caps sets a terrible precedent for future bills that authorize new spending.

Second, NIH and FDA do not need additional funding. Instead, they need to spend the money they already have on critical research instead of wasteful projects.  In fact, discretionary funding for NIH has tripled over the last twenty years, from $11 billion in 1994 to over $33 billion in 2016.  Conservatives should rightly be concerned about this rapid growth of bureaucracy and spending. If the NIH wants to dedicate more funds to breakthrough cancer research, they should use the $33 billion already available on an annual basis.

Even more troubling is how much money is wasted by the NIH on comically absurd projects, money that could be dedicated to developing life-saving cures or new treatments. As the Daily Signal reported earlier this year:

“What do honey bees on cocaine, drunken songbirds, and sexy goldfish have in common? Each was the subject of extensive, taxpayer-funded research…[and] the NIH [spent] part of its $32 billion budget to study the appearance of Jesus Christ’s face on toast, the musical preferences of monkeys, and the contagious nature of yawning.”

The NIH has a long and ugly track record of wasting taxpayer dollars on useless research like mentioned above, which has been exposed through Senator Flake’s report Twenty Questions: Government Studies That Will Leave You Scratching Your Head and by Senator Lankford’s Federal Fumbles: 100 Ways the Government Dropped the Ball.  Instead of creating new funding streams to the tune of billions, Congress should exercise better oversight of NIH research and demand real results, not studies of whether or not glaciers are sexist.

Third, Congress has no business considering an almost 1,000 page omnibus health care spending bill during the lame duck session.  If this legislation was so critical, Congress should have ensured that it passed before the election. As President of The Heritage Foundation and former Senator Jim DeMint has explained:

“Even legislators who hold onto their seats know that a lame duck is the perfect time to sneak through massive, big-government spending bills when most Americans have happily turned to family and football after election season. For decades, Congress has intentionally delayed controversial legislation until it can be passed under the cover of a lame-duck session.

“Members of Congress who would usually object to these shenanigans are often dissuaded because leadership warns of dire consequences should these big, ‘must-pass’” bills not go through at the end of the year. And believe me, speaking from personal experience, it’s no fun being the guy keeping everyone at work in the Capitol building over Christmas vacation.”

Fourth, and finally, the process has been questionable and the bill will likely be closed to amendments. As previously mentioned, the Cures Act has become a “Christmas Tree”, and it now includes other significant pieces of legislation that are unrelated to NIH funding for cancer research or FDA efforts to bring lifesaving drugs to the market. One glaring example is the inclusion of H.R. 5456, the Family First Prevention Services Act of 2016. This bill makes significant changes to the federal foster system and authorizes over $1.1 billion of additional federal spending. When the Congressional Budget Office (CBO) analyzed the bill earlier this year, it concluded that it “would increase net direct spending and on-budget deficits by more than $5 billion in at least one of the four consecutive 10-year periods beginning in 2027.” This is problematic because it is in clear violation of Section 3101 of the FY 2016 Concurrent Resolution on the Budget, which says that it shall not be in order in the House or the Senate to consider any bill that would increase on-budget deficits or increase direct mandatory spending by $5 billion in any of the 4 consecutive 10-fiscal year periods after the normal 10-year budget window.  

Additionally, this almost 1,000 page bill, which now contains at least four other bills separate from the original Cures Act, will be dropped on the House Floor for an up or down vote, and Members of Congress will likely have no opportunity to offer amendments. In fact, the bill will most likely be considered on Wednesday, only one day after lawmakers return, under a closed rule.

Conclusion: It is telling that Politico, when reporting on the new version of the bill, described the spending as “all key White House priorities.”  It could not be more tone-deaf of the Republican Congress to pass a massive spending bill like Cures Act, funding the White House priorities, less than a month after the American voters soundly rejected President Obama’s agenda and business-as-usual in DC.  There is no need for Congress to rush this bill through the lame duck session of Congress.  In fact, given the fact that NIH already receives over $33 billion on an annual basis, there is no need for Congress to pass the Cures Act in the first place.  Furthermore, the way that the legislation creates new spending streams outside of the BCA caps should cause every fiscal conservative to reject it. From the timing, to the spending, to the gimmicky pay fors, and bad budget precedents, the 21st Century Cures Act embodies the big-spending ailments that the federal government desperately needs to be cured from – for the sake of the fiscal health of our nation and the wallets of our taxpayers.

Heritage Action opposes the 21st Century Cures Act and will include it as a key vote on our legislative scorecard.