The deal calls for the U.S. government to increase discretionary spending to $1.012 trillion in fiscal year 2014, which began on 1 October, and $1.014 trillion in 2015. (Discretionary spending is set annually by Congress, in contrast to spending on so-called entitlement programs such as Social Security.) The 2014 discretionary number is essentially halfway between a lower total adopted by the Republican-controlled House earlier this year and a higher number supported by the Democratic-led Senate. It is also $45 billion higher than what would have gone into effect in January 2014 as required by the 2011 law that created the sequestration mechanism.
The higher spending is intended, in large part, to ease the pain promised by the sequester. In 2013, the sequester required many agencies, including major research funders such as NIH, to cut their budgets by about 5%, although the National Science Foundation and others were spared somewhat by last-minute moves in Congress…
The [new budget] agreement “eliminate[s] about $63 billion in across-the-board domestic and military cuts” over the next 2 years… The extra money “would be spread evenly between Pentagon and domestic spending, nearly erasing the impact of sequestration on the military.” Domestic programs, including health research funding, could “fare particularly well” under the deal, the Times notes, because other funding moves—such keeping in place cuts to the Medicaid health care program—would give Congress greater flexibility in spending.
The details of how the budget deal will affect federal agencies have not been worked out, so no one knows what the NIH budget will be next year. The sequester has been reducing the NIH budget about 5% a year. My guess is that the budget deal is likely to stave off further absolute reductions in NIH funding for the next couple of years. It’s unlikely to restore prior cuts or grow the health research budget.