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The President is asking congress to cut over a billion from medical research.
New media reports indicate the Trump administration is seeking to cut funding for the National Institutes of Health (NIH) this fiscal year. Proposed fund would go into the construction of border wall and military spending.
Earlier in the month, President Donald Trump had released his budget for next year, in it, NIH saw cuts of close to 20 percent in funding for medical research.
Now it appears the president is asking congress to cut $1.2 billion from research grants within the agency for this fiscal year, which ends in October. Bloomberg and Politico reported on the $18 billion in cuts to “discretionary spending bills.”
Request comes on the heels of budget resolution deadline
The document was sent out to Capitol Hill last Friday. The White House has not confirmed the reports.
Congress is on a deadline as it works to find common ground for its budget by April 28, otherwise, the government would shut down. The demand from the president is being met with opposition from Democrats and Republicans alike.
California Representative Ken Calvert, a Republican on the House Appropriations Committee, told Bloomberg the cuts are “highly improbable.”
In a statement Sen. Patty Murray, a Democrat from Washington said Republicans needed to “do the right thing and ignore this absurd demand from President Trump.”
“[Republicans] need to work with us on a fair and responsible budget for the rest of this year,” Murray said.
Secretary of Health and Human Services Tom Price said the cuts were needed in order to decrease “decrease the areas where there are either duplications or redundancies or waste.”
In a subscribers-only report from STAT, Republican representative and chair of the House appropriations subcommittee said the cuts were “not going to happen.”
Where would the money be relocated?
The money would reportedly be used to fund Trump’s proposed border wall between the US and Mexico. A major campaign promise from the President.
Last year research group Bernstein estimated the labor for a 40-foot-tall, 7-foot-deep, 10-inch-thick, and a 1,000-mile-long wall between the two countries would cost nearly $15 billion, a bill that Trump repeatedly promised Mexico would pay.
The proposed budget would introduce an increase to FDA medical product user fees, the proposed document still needs to be approved by congress. Changes to the original document are expected.
Investor Takeaway
There wasn’t a noticeable impact on markets based on the news, most likely due to the very nature of the announcement and the definite shut-down it has received from Republicans working on the budget. However is important to see how this makes the Trump’s administration control over the Republican party look. After the failed attempt to replace Obamacare, markets were left feeling cold on the capability of the President and Speaker Paul Ryan to deliver on tax reform.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
