The Republican takeover of the House this week could have a negative impact on biotechnology exchange traded funds (ETFs).
Kenneth Chang for The New York Times reports that research and development at nonmilitary agencies — including those that sponsor science and health research — would fall 12.3 %, to $57.8 billion, down from President Obama’s requested $65.9 billion for fiscal 2011. [Biotech ETFs Readying to Deliver the Goods.]
Other agencies that would be impacted:
- The National Institutes For Health would lose $2.9 billion, or 9% of funds.
- The National Science Foundation would lose 19% of their budget, or more than $1 billion.
- The National Oceanic and Atmospheric Administration would lose $324 million, or 34%.
Democrats could try to push the budget bills through Congress before the Republicans take power in January, but there are not enough votes for a Senate filibuster. Stem cell research would take a back seat, which has been in flux since a federal judge ruled in August that any federal financing violated a Congressional ban against the destruction of embryos for research. [5 Things That Drive Biotech ETFs.]
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- iShares Nasdaq Biotechnology ETF (NASDAQ: IBB)
- SPDR S&P Biotech ETF (NYSEArca: XBI)
- First Trust NYSE Arca Biotech ETF (NYSEArca: FBT)
Tisha Guerrero contributed to this article.