A deal reportedly proposed last week to resolve an ongoing dispute between the Bush Administration and Congress over funding to procure anthrax vaccine appears to have fallen through. A letter sent Wednesday (July 2) from the White House Office of Management and Budget (OMB) to a Senate subcommittee outlines a plan that would take money earmarked for other research supported by the National Institute of Allergy and Infectious Diseases (NIAID) to pay for the anthrax vaccine.

In a May letter, Senators Arlen Specter (R-Pa.) and Tom Harkin (D-Iowa) warned former OMB Director Mitch Daniels not to use any fiscal year 2003 (FY03) funds to procure the second-generation recombinant antigen (rPa) vaccine until Daniels and the senators discussed the matter. As chair and ranking member, respectively, of the Senate Appropriations subcommittee that oversees the National Institutes of Health, the senators were upset that OMB had ordered NIAID to scavenge $233 million intended for other research and spend it instead on testing and buying several million doses of the second-generation recombinant anthrax vaccine

Insiders privy to recent Senate-OMB negotiations expected OMB to propose a compromise diverting only $60 million and leaving funding for AIDS and other non-biodefense research intact. However this week's reply to the senators, sent by incoming OMB Director Joshua B. Bolton, announced that NIAID will take $145 million in FY03 from other researchers to pay for research and development of the anthrax vaccine.

If NIAID handles the shortfall the same way it was intending to deal with the expected $233 million gap, initial payments to some new grantees will be delayed up to six months, and some existing grantees will see their payments restructured and possibly delayed.

According to a Senate staffer who spoke on condition of anonymity, about one-eighth of that total ($18 million) might come from AIDS research projects and another $18 million from non-AIDS, non-biodefense research.

Bolton wrote that the exact amount NIAID will divert "will depend on the number and quality of responses to a recent NIAID contract solicitation." The contract in question will fund one or more companies this fall to conduct Phase II testing and produce 3-to-5 million doses of the new vaccine.

Moreover, the letter states that NIAID will spend "up to $131 million" on the anthrax vaccine in FY04. Funding for that year has not previously been part of the year-long dispute. Since the Administration never asked Congress for FY04 funding for the new anthrax vaccine, that money would also have to be redirected from other researchers' grants in a yet-to-be-specified way, the Senate staffer said.

The staffer added that OMB might avoid Senate opposition to its new FY03 plans, but that FY04 was "up for grabs," since Congress has not passed that budget.

OMB spokesman Trent Duffy refused to comment on the letter. Neither NIAID Director of Financial Management Ralph Tate, nor spokespersons for the two senators could be reached Thursday for comment.