AAAS Analysis of 2005 U.S. Spending Measure Finds Mixed News for R&D

A lame-duck U.S. Congress completed the overdue 2005 budget Saturday, approving a $388 billion spending plan that contains significant bad news—and a few bright spots—for science and technology interests, according to a new analysis by Kei Koizumi, AAAS's expert on federal R&D spending.

Under terms of the omnibus spending bill, the National Science Foundation will sustain a $107 million, 1.9 percent spending cut, while the budget for the Advanced Technology Program in the Department of Commerce was trimmed by 24 percent. The National Institutes of Health, the National Aeronautics and Space Administration and Department of Energy's Office of Science all recorded small gains in the congressional spending bill.

"Several factors are squeezing the federal investment in non-defense, non-homeland security R&D—record-breaking federal budget deficits, spending increases for homeland security and national defense and restraints on domestic spending to bring down future deficits," says Koizumi, director of the AAAS R&D Budget and Policy Program. "Lawmakers have agreed on substantial increases in the defense and homeland security R&D portfolios that will bring the total federal R&D investment to record highs in fiscal year 2005 approaching $132 billion. But the remaining non-defense, non-homeland security R&D portfolio will see flat funding or cuts in 2005."

[The full analysis is available here.]

The omnibus bill sets funding for 13 government departments and dozens of agencies in 2005, and holds domestic programs overall to a freeze at last year's funding levels. President George W. Bush has until December 3 to sign the bill into law.

In effect, the 2005 budget process has sought to balance the demands of the Iraq war, the war on terrorism and domestic security against the need to hold down budget deficits, which hit $413 billion in 2004. Congress and President Bush last week raised the federal debt limit from $7.4 trillion to $8.2 trillion. The International Monetary Fund this week blamed the U.S. budget deficit and higher oil prices for reducing projections for global economic growth in 2005.

Earlier this year, Congress approved substantial increases in the research and development budgets for defense and homeland security, bringing total federal R&D investment to record highs for the budget year that began 1 October.

On 18 October, Bush signed into law a final Department of Homeland Security budget that provides $1.2 billion for R&D activities in FY 2005, a 20 percent boost. The Department of Defense budget includes a record-breaking $70.3 billion for R&D, up 7.1 percent over 2004. In addition to providing large increases for basic and applied research, the DoD bill increases S&T funding by $1 billion, to an all-time high of $13.6 billion.

The omnibus bill approved Saturday includes an across-the-board cut of slightly less than 1 percent to keep spending under limits set by the administration. The House passed the measure 344-51 and the Senate approved it 65-30, but critics on both sides of the aisle complained they had virtually no time to review a document that was more than 3,000 pages long and weighed in at over 14 pounds.

With a few exceptions, Koizumi's analysis found, R&D programs will share in the sacrifice of tight budgets:

• NSF: The budget falls to $5.5 billion in 2005, down $107 million or 1.9 percent from 2004. The five largest research directorates all see budget cuts approaching 2 percent. NSF's education and human resources programs fall by 10 percent.
• NIH: The 2005 budget of $28.6 billion is just 2 percent above last year's funding level, well off the 15 percent annual increases between 1998 and 2003 and well behind the projected inflation rate for biomedical research. Most NIH institutes will receive increases between 1.6 and 2.5 percent.
• The Advanced Technology Program: Targeted for elimination by the administration and the House, but it won a reprieve with a budget of $136 million, down 24 percent from 2004.
• U.S. Geological Survey: Received $935 million for its 2005 budget, a 0.3 percent cut.
• NASA: Congress is recommending a $16.1 billion budget for 2005, 4.5 percent more than last year. NASA's windfall allows the agency to get the Space Shuttle back in flight next year and resume construction of the Space Station, as well as embark on its moon-and-Mars programs. But these ambitious plans will require NASA to make deep cuts in its R&D investments in biological research, earth sciences and aeronautics R&D.
• The Department of Energy's Office of Science: It won a 2.8 percent increase, to $3.6 billion. The Office's programs in high energy physics, fusion research, nuclear physics, computing research and basic energy sciences all receive modest increases. Congress rejected DOE's request for R&D funds to develop a new generation of nuclear weapons, including "bunker buster" bombs.
• National Institute of Standards and Technology: Won a 10 percent R&D increase to $379 million.

Koizumi warned that the bleak R&D picture was likely to continue in 2006—and beyond—for most federal agencies.

"The Bush administration and the Congress appear committed to reducing the federal budget deficit over the next several years by severely restraining domestic spending," he said. "In his second term, President Bush appears poised to follow through on his deficit reduction plan outlined last spring. The AAAS analysis of those budget plans, released in April, shows that 21 of the 24 federal R&D sponsors would see their budgets decline in real terms over the next five years. Only DOD, DHS and NASA would see their budgets keep pace with expected inflation."

Further details on the final fiscal year 2005 budget appropriations will be available later this week in a AAAS analysis. Agency details will be available beginning next week.

Since 1976, the R&D Budget and Policy Program has been providing timely, comprehensive, and independent analyses of R&D funding trends in the federal budget as a service to the science, engineering and policymaking communities.

In action earlier in the year, Congress approved substantial increases in the defense and homeland security R&D portfolios that will bring the total federal R&D investment to record highs in FY 2005. On October 18, President Bush signed into law a final DHS budget that provides $1.2 billion for DHS R&D activities in FY 2005, a 20 percent boost. [See the full DHS budget analysis here.] The DOD budget contains a record-breaking $70.3 billion for R&D, up 7.1 percent. In addition to providing large increases for basic and applied research, the Defense bill increases DoD S&T funding by $1 billion to an all-time high of $13.6 billion. [See the full DoD budget analysis here. ]

The U.S. Treasury reports that the federal budget deficit for FY 2004 (ended Sept. 30) was an all-time high of $413 billion, up from $375 billion last year. Continued government borrowing required Congress and the President to raise the federal debt limit from $7.4 trillion to $8.2 trillion last week.

— Edward W. Lempinen

23 November 2004