AAAS Analysis Shows Uncertain Future for Federal R&D Spending

VIDEO: Matt Hourihan discusses funding trends present in the president’s FY2014 R&D budget.
[Credit: AAAS/Carla Schaffer]

Spending cuts forced by the Budget Control Act, also known as sequestration, drove federal R&D spending for Fiscal Year 2013 down to 0.8 percent of GDP—the lowest level seen in 40 years. If sequestration continues, “it’s quite likely that federal R&D as a share of GDP would drop below 0.8 percent for the first time in a very long time,” said Matt Hourihan, director of the AAAS R&D Budget and Policy Program.

Hourihan spoke about President Obama’s R&D budget request for Fiscal Year (FY) 2014 on April 26 at a public luncheon briefing on Capitol Hill. The briefing was held in conjunction with the House R&D Caucus, which is co-chaired by Rep. Frank Wolf, R-Va. and Rep. Rush Holt, D-N.J.

Alan Leshner

Alan Leshner

“As people work on the budget going forward, I hope that you’ll take into account that anything done now has very long-term consequences,” said Alan Leshner, chief executive officer of AAAS and executive publisher of the journal Science, in opening remarks. “And those consequences are not about the future of scientific work for us alone, but since science is the seed corn for economic growth, for innovation, and the seed corn for the future solution to so many of the nation’s problems, let us be careful lest we do irreversible damage.”

President Obama’s FY 2014 budget request would shift federal R&D spending from defense to non-defense programs and prioritize applied research over basic research and development. However, the president’s budget request is based on repealing sequestration, an unlikely prospect.

Federal funding for R&D is mostly classified as discretionary spending, and while the president requested $1.057 trillion for discretionary spending in his FY 2014 budget, sequestration capped it at $966 billion—a difference of about $90 billion.

Based on AAAS analysis of appropriations and agency budget documents, total federal R&D spending in FY 2013 will drop by 6.5 percent or $9.3 billion. “Most agency budgets are going to be set back at least a few years,” said Hourihan. “Many of them are going to be set back a decade or more under sequestration.”

In the president’s FY 2014 budget, non-defense R&D spending would increase 9.2 percent over FY 2012 while defense R&D spending would decline 5.5 percent. (The president’s budget request does not make direct comparisons to the FY 2013 budget due to the late timing of appropriations.) The FY 2014 budget request would be the first in recent history in which the Defense Department would not receive a majority of federal R&D spending, Hourihan said.

The president’s budget request would also prioritize applied research over development, though Hourihan explained that the two shifts are interconnected because R&D performed by defense agencies is generally more focused on development. “We’ve seen this steady shift over the last few years from defense to non-defense and from development to research but the president’s budget this year appears to accelerate it somewhat,” he said.

R&D funding for the National Institutes of Health (NIH) would remain flat. “The NIH budget in real dollar terms has declined by 10 percent since FY 2004,” Hourihan said. “This year’s budget would not turn around that trend.” While the success rate for NIH grants recently reached a new low, “they do project a slight increase, a slight improvement in that rate to 19 percent in the FY 2014 request, though again, that doesn’t account for sequestration which of course would likely drive down the success rate even further,” Hourihan said.

The National Center for Advancing Translational Sciences, the National Institute on Aging and the National Library of Medicine were the only parts of NIH that would see budget increases. Some of the proposed NIH R&D spending would go to support research on the human brain via the BRAIN Initiative, which will also be supported by funding from the National Science Foundation and the Defense Advanced Research Projects Agency.

The National Science Foundation and science programs run by the Department of Energy would see budget increases of 9 percent and 6 percent respectively in the president’s budget request, continuing long-term trends. The Department of Homeland Security would also see a budget increase but most of it would go toward construction of the new National Bio and Agro-Defense Facility in Manhattan, Kansas.

Energy programs run by the Department of Energy would receive a 48.6 percent budget increase to support research on efficiency, renewable energy and advanced manufacturing, while research on fossil fuels and nuclear energy would face cuts. The budget request also includes proposals for a new energy innovation hub dedicated to research on the electrical grid and for an energy security trust to use revenues from oil and gas to support transportation-related research on topics including batteries and hydrogen fuel cells.

The budget outlook for NASA is more complicated. The president’s budget request would continue support for the James Webb Space Telescope and increase support for Space Technology, an applied research program that identifies technological solutions for NASA’s exploration activities. Yet, NASA’s planetary science program would face cuts and disagreements persist about NASA’s priorities.

Matt Hourihan

Matt Hourihan

At the U.S. Department of Agriculture, R&D spending has declined 8.8 percent over the last 10 years although the president’s budget request would increase the agency’s R&D budget 8.2 percent. The budget increase would support intramural and extramural research alike, including the Agriculture and Food Research Initiative, which would receive a $383 million increase – nearly 50 percent. Environmental R&D, down 7.3 percent over the last 10 years, would either remain stagnant or decline, though the president’s budget request would increase support for the U.S. Geological Survey and National Oceanic and Atmospheric Administration.

“The big question, of course, is how does one fit a $1.06 trillion budget into a $966 billion budget hole?” Hourihan asked. “You can increase the size of the hole, decrease the size of the budget, maybe do a little of both, but a lot of these numbers, throw them out if the discretionary spending caps stay where they are.”

Links

Learn more about the AAAS R&D Budget and Policy Program

Read a AAAS analysis of R&D spending in the FY 2014 budget

View sequestration resources collected by the AAAS Office of Government Relations