Budgeting for the next pandemic
COVID-19 is the costliest pandemic and one of the costliest crises in the history of the modern world. Even without assessing the economic and health impacts, the pandemic has cost governments around the world trillions of dollars, with the United States alone providing more than $ 5 trillion in direct tax response. As encouraging signs of recovery emerge, there is a compelling need here in the United States for a more effective, integrated, and well-executed preparedness strategy – and an accompanying budget approach – to mitigate adverse consequences. pandemics and other biological threats and improve our preparedness. to respond quickly and effectively when this happens.
The need for such a strategy is driven not only by fiscal considerations, but also by vital concerns of national security and international competitiveness. For example, China has been able to generate goodwill in much of the developing world by exporting its low-cost vaccine under the name Health Silk Road. Meanwhile, the Trump administration pursued a policy of manufacturing and stocking vaccines for home use while withdrawing globally. While the Biden administration reverses these policies (for example by funding COVAX, a multinational initiative to promote global access to vaccines), China’s efforts to be seen as a protector of global public health have likely strengthened its international standing.
Here in the United States, already in a trillion-dollar deficit model, fiscal conditions have worsened due to additional borrowing needed to fund COVID-19 response activities. This additional red ink amounts to approximately $ 40,000 on the National Debt tab of each American household. In addition, there is no guarantee of avoiding a repeat expense in the future. If it were required to borrow so much to pay for, say, a home repair, a rational household would take mitigating measures (eg, take out insurance) to mitigate the impact of future incidences. By extending this logic to the national level, the United States should take steps to prevent costs of this magnitude from recurring.
The American Rescue Plan Act provides tens of billions of dollars in new funding for activities involving immunization, public health, and pandemic preparedness. But for past biological events, such as the 2009 H1N1 influenza pandemic and the 2014 Ebola outbreak, preparedness funding also increased but was not sustained. (Compare this with post-9/11 funding for terrorist threats or long-standing national security priorities where funding has remained at high levels.) If the past is a prologue, we risk continuing after the pandemic subsides. be mitigated without addressing the continued risk of a pandemic. While the hundred-year-old flood metaphor doesn’t even seem to apply to flooding these days, it certainly doesn’t apply to pandemics and other biological threats – the next one could come at any time.
As we move from the immediate response to COVID-19 to more general pandemic preparedness, the Biden administration should articulate a strategic budget plan, including the smart use of taxpayer dollars that emphasizes a comprehensive and sustainable approach. The key elements of such a strategy include:
Priority inter-agency objectives. A severe pandemic is mobilizing agencies far beyond the alphabet soup of health agencies of the HHS, CDC, NIH and FDA. Departments as diverse as the Treasury, Commerce, Agriculture, Housing and Urban Development, and the Small Business Administration all play new or expanded roles in providing COVID-19 relief. For the first time, FEMA is responding to a biological event such as a major disaster. As a result, it is of critical importance for the government to divert attention from disparate agendas towards a cohesive and coordinated preparedness strategy that transcends agency boundaries and congressional committee jurisdictions.
There is already a law requiring the White House budget office to coordinate with agencies to establish a limited set of CAP goals to accelerate progress in the highest priority areas where interagency collaboration is needed. necessary to meet a critical national need. Designating a CAP target would improve accountability, transparency and governance not only by improving inter-agency coordination, but also by appointing responsible officials, carrying out data-driven expenditure reviews with clear performance targets. and reporting to the public on performance.gov. Based on our experience over the past year, it is hard to imagine that there are currently many higher priority areas than pandemic preparedness.
Industrial commitment. Federal agencies must find ways to engage with non-governmental and state and local partners to ensure coordination of efforts and funding. One of many unfulfilled recommendations from a 2010 post-pandemic report suggested an advisory committee, made up of representatives from the biotech, pharmaceutical and investment communities, to guide engagement with industry. This suggestion remains very relevant today given the importance of relations between the government and industry partners. Policymakers need to understand that vital capacities related to biopharmacy and healthcare lie largely in the private sector. While federal investments are needed to build a strong national defense against the pandemic, so are substantial contributions from the private sector, non-federal government organizations and others. Strategic budgeting must recognize, plan and integrate this blended investment model.
Financial innovation. The United States should explore a broader portfolio of funding mechanisms to include direct contributions (i.e., grants, tax incentives, loans), innovative financing mechanisms (e.g., bonds for vaccines or mega-funds to ensure more penalties in vaccine research) and public-private partnerships that stimulate investment in modern vaccine production. These innovations should be viewed not in isolation but as part of a diverse portfolio of preparedness projects.
International engagement. Organizations such as the Gavi Vaccine Alliance and the Coalition for Epidemic Preparedness Innovations have formed this century to fund and develop vaccines. Sadly, the United States has not been an active participant in recent years, but the actions of the Biden administration indicate that the position is changing. With all of those affected by a pandemic, the United States must not only re-engage, but provide flexible funding to allow for more meaningful participation.
Some have described the need to invest in new platforms and technologies to prepare for future pandemics like a lunar-type business. Perhaps a more apt metaphor is a Star Wars-style missile defense system that wipes out microbes instead of ICBMs. Unlike missile defense systems, however, no matter how advanced vaccine and pandemic preparedness technologies are, an effective response will largely depend on individual behaviors (social distancing, wearing a mask, taking a test. / vaccinate). There’s plenty of room under a fortified pandemic preparedness shield, but it only protects if we all get hold of it.
Doug Criscitello, a former official with the Congressional Budget Office and the Office of Management and Budget, is Managing Director of Grant Thornton Public Sector LLC. He is a member of the National Academy of Public Administration.