Vice President Biden continues to lead a bipartisan working group charged with generating an agreement on deficit reduction that can gain enough votes in Congress to pass. There is pressure on the group to produce a plan quickly, as the House leadership has insisted on large decreases in federal spending prior to agreeing to raise the nation’s debt limit. According to the Treasury Department, the debt limit must be raised by early August to avoid what would be the first ever U.S. default. While the administration insists that the debt limit must be raised and should be considered independently of a deficit reduction plan, the two remain very much intertwined, given the House position. The Biden led group has set July 1st as a date by which its work must conclude -whether or not a deal is reached.
The work of the Biden group has significant implications for federal agencies, such as NIH/NIDCR, both in the near and long-term. Any agreement that is reached will serve as a reference point for the remainder of the ongoing FY12 appropriations process, as well as for years to come. Federal agencies are now in the process of developing their FY13 budget requests. Any agreement reached by the Biden group will certainly be instructive to agencies in setting priorities and developing their budget requests going forward.