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December 19, 2003

Omnibus Provides Big Boost for R&D at DOD, DHS

In late November, President Bush and the 108th Congress reached agreement on the final outline of the fiscal year (FY) 2004 appropriations. The FY 2004 omnibus appropriations bill (HR 2673) bundles together the 7 unfinished bills, bringing the total federal investment in research and development (R&D) to a new record of $127.0 billion in FY 2004, a $9.5 billion or 8.1 percent increase over FY 2003 and $4.6 billion more than the Bush Administration request.

The 1185-page omnibus bill provides funding for 8 of the 12 largest R&D funding agencies, but also includes a 0.59 percent across-the-board cut for all non-DOD appropriations, even for agencies whose budgets have already been signed into law.

The Department of Defense (DOD), the Department of Homeland Security (DHS), and the National Institutes of Health (NIH) would get 93 percent of the $9.5 billion increase, leaving all other R&D funding agencies collectively with only a modest increase. DOD's R&D alone would receive 80 percent of the increase reaching another all-time high of $66.3 billion, a boost of 13.0 percent or $7.6 billion. The new DHS would see its R&D portfolio surge by 56.0 percent or $375 million to $1.0 billion.

On the other hand, after five years of annual 15 percent increases, NIH budget growth would slow down considerably in FY 2004. Most NIH institutes would receive increases of about 3 percent. After adjusting for an across-the-board cut, the NIH R&D portfolio would increase by 3.2 percent, a modest increase in percentage terms. The omnibus bill would add $847 million to NIH R&D for a total of $27.1 billion.

Although the President and Congress have agreed to record increases for defense and international discretionary spending related to U.S. activities in Iraq and Afghanistan, they have also agreed to restrain domestic spending. So even as the FY 2004 budget contains record-breaking investments in defense and homeland security R&D, there will be only modest increases for nondefense R&D programs, with increases in some R&D funding agencies offset by flat funding or cuts in others.

For example, the National Science Foundation (NSF) would enjoy a budget increase, but would fall well short of a five-year doubling plan signed into law last December. Congress would provide $4.1 billion for NSF's R&D activities (excluding education, training, and overhead programs), an increase of 4.7 percent.

The remaining agencies in the federal R&D portfolio would receive some modest increases offset by cuts or flat funding in other areas. The Department of Energy's Office of Science would receive a slight boost to $3.2 billion for its R&D programs, an increase of 3.8 percent. R&D in the U.S. Geological Survey would fail to keep pace with inflation with a 1.7 percent increase to $579 million. Within the Department of Commerce, Congress would reject the Administration's proposal to eliminate the Advanced Technology Program, but R&D in the National Institute of Standards and Technology would still decline 3.9 percent.

There would be cuts in the R&D portfolios of other agencies: R&D in the U.S. Department of Agriculture (down 4.9 percent), the Department of Transportation (down 8.2 percent), and NASA (down 0.4 percent) would all fall in the FY 2004 omnibus bill.

The House approved the omnibus bill on December 8, but procedural disputes delayed final Senate approval until the end of January. Although it will be weeks before the FY 2004 budget is enacted, the funding levels outlined in the FY 2004 omnibus appropriations bill appear to be final and are unlikely to change in any further congressional action. •••

—Kei Koizumi, Director, AAAS R&D Budget and Policy Program

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