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 (ARRA, Public Law 111-5). In 2010, over half of all nondefense discretionary spending for health research and development went to NIH.
This option presents 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 about $2 billion over 5 years and by about $13 billion over 10 years, thereby reducing federal outlays by about $1 billion and about $10 billion, respectively. The other alternative would reduce NIH's fiscal year 2012 appropriation to the amount provided in 2003, the last year in which NIH had a large increase in its appropriation; after that, funding would grow at the rate of inflation assumed in CBO's baseline projections. Such a one-time cut of about 13 percent would reduce projected appropriations by about $20 billion over 5 years and about $43 billion over 10 years, thus cutting federal outlays by about $16 billion and $38 billion, respectively.
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 across 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 (GAO-09687), 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 more than 80 percent of NIH's funding supports extramural research activities (research that is not conducted by NIH staff or on the main NIH campus) that are critical to improving the nation's health care, which accounts for a large and growing share of the economy. Reducing NIH's funding would probably result in decreased support for extramural research. Because NIH is a major source of funding for academic biomedical research, deep cuts to its budget could disrupt funding for programs already under way. Furthermore, while having more focused priorities is beneficial, it is difficult to know in advance which projects will yield the most useful results. As a result, large cuts to the NIH budget could discourage innovation in agency-supported medical technologies that have the potential to improve people's health.