Venable partner John Cooney spoke to Law360 in an August 10, 2012 article about the possible impact of a federal sequester. Congress has until January to find $1.2 trillion in deficit reductions to avoid a federal sequester which would require every federal agency to cut its budget by 7.8 percent. One question facing a possible sequester is the impact on user fees at the Food and Drug Administration (FDA). Since user fees are collected and spent by the FDA from the industry and not taxpayers, some believe they cannot be touched by a sequester.
Cooney argues that the impact on user fees is far from certain, saying, “Because user fees go into the federal budget, they'd be subject to cuts like everything else.” To avoid cuts, the FDA would have to successfully argue that user fees fall into one of the exemptions in the sequester bill. Cooney noted that it was tough to predict what the decision on user fees would be, saying, “It is the OMB — likely in consultation with the U.S. Department of Justice — that would make that call.” The sequester requires cuts to be uniform across agencies and among each "program, project, activity or account," however, “What qualifies as a program, project or activity is still unclear,” according to Cooney.
Recalling his time at the Office of Management and Budget during the 1986 sequester, Cooney said federal agencies were constantly calling for interpretations of the law to determine which expenditures were exempt. “That's what drove us crazy...It was the most intense career experience I've ever had,” he said.