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This article was written by Kei Koizumi, director of
the AAAS R&D Budget
and Policy Program.
The House of Representatives (220-208) and the Senate (50-48)
approved a final version of the fiscal year (FY) 2001 budget
resolution on April 13 just in time to meet the April 15
statutory deadline. In the plan total discretionary spending
would rise from $591.5 billion in FY 2000 to $605.5 billion
in FY 2001, an increase of 2.4 percent. Within the total
discretionary portion of the budget, the AAAS analysis reveals
that funding for research and development (R&D) is projected
to increase from $83.3 billion in FY 2000 to $84.9 billion
in FY 2001, a modest growth of 1.9 percent. Though the resolution
would allow for increases in nondefense R&D in FY 2001,
in future years discretionary spending would fail to keep
pace with expected inflation.
The budget resolution lays out congressional priorities
for the federal budget from FY 2001 to FY 2005, and establishes
broad budget aggregates for categories of federal spending.
Although there are few specifics in the budget resolution
regarding federal support of R&D, the resolution does
have a major impact because it establishes the spending
targets under which all federal support for R&D will
be considered.
The congressional plan would allow $42.9 billion for nondefense
R&D in FY 2001, an increase of 5.3 percent or $2.2 billion
over FY 2000. This is primarily due to a $1 billion increase
for the National Institutes of Health (NIH), a substantial
16.6 percent increase for R&D in the National Science
Foundation (NSF), and an 11.3 percent boost for nondefense
programs in the Department of Energy (DOE). The conference
committee failed to pass a Senate amendment that would have
increased NIH funding by an additional $1.6 billion. Most
other nondefense R&D funding agencies could receive
increases as well. Please refer to the table.
Defense R&D is not outlined in detail in the budget
resolution, however both the President's budget and the
budget resolution call for steady increases in defense spending
over the next five years. Although both plans call for increases,
the Pentagon has set funding priorities for procurement
of new weapons systems, operations and maintenance, and
military salaries. As a result, defense R&D would likely
decline 13.7 percent to FY 2005 after adjusting for inflation.
In future years, the budget resolution projects total federal
support for R&D to rise from $83.3 billion in FY 2000
to $84.8 billion in FY 2005, but this would actually result
in a decline of 7.8 percent after adjusting for expected
inflation. Within that amount, nondefense R&D would
rise from $40.8 billion in FY 2000 to $44.3 billion in FY
2005 if the assumptions in the resolution are followed.
Again, this would be a slight 1.6 percent cut after adjusting
for expected inflation.
The outyear projections in the congressional plan are less
favorable to discretionary spending and hence to R&D,
compared to the President's budget. This is because the
President's budget would provide far less in tax cuts, leaving
room for discretionary spending increases while still preserving
substantial surpluses to pay down the national debt. It
proposes a large increase in discretionary spending in FY
2001 and smaller increases to keep up with inflation thereafter,
thereby allowing many nondefense R&D programs to receive
inflation-adjusted increases to FY 2005.
The budget resolution tries to establish a Republican vision
for the federal budget in the first election year to take
place in a new era of budget surpluses. It sets out a plan
to extend the era of surpluses in FY 2001 through FY 2005
while still addressing Republican priorities and establishing
clear contrasts with the President's proposed budget for
FY 2001.
A major priority in the Republican budget plan is tax cuts
similar to the 10-year, $1 trillion tax cut plan approved
by Congress last summer but vetoed by the President. Though
the FY 2001 budget resolution looks only at a five-year
window, the resolution's $240 billion tax cut over that
period is roughly equal in size to last year's tax proposal.
The emphasis on tax cuts and not dipping into the Social
Security surplus, however, would leave few additional resources
for discretionary spending.
Another priority in the budget resolution is defense spending,
which would receive substantial increases to reverse a decade
of post-Cold War cuts in the military budget. The President
also requested an increase for defense, and the congressional
plan would provide slightly more. Both plans propose to
allow defense spending to rise 2.4 percent after inflation
over the next five years. But in order to accommodate tax
cuts and to increase defense spending, nondefense discretionary
spending would increase only slightly, from $298 billion
in FY 2000 to $311 billion in FY 2005, a gain of 4.6 percent
but a decline of 5.3 percent after adjusting for expected
inflation.
This stands in contrast to the President's budget, which
because of more modest tax cuts would have room to offer
a 2.0 percent increase to FY 2005 after inflation for nondefense
discretionary. In FY 2001, the President's budget would
provide $316 billion for nondefense discretionary (up 6.2
percent over FY 2000), nearly $21 billion more than the
budget resolution. Under the congressional plan, nondefense
discretionary would actually decline in FY 2001.
The budget resolution provides only broad functional targets
for discretionary spending and not program-by-program spending
levels. It divides discretionary spending into 20 functional
categories and leaves the allocation of those funds to the
Appropriations Committees. With approval of a final budget
resolution, Congress may now begin the process of drafting
appropriation bills for passage. While each individual functional
category sets general targets, appropriators must still
stay within the overall limit of $295 billion for nondefense
discretionary spending. Therefore, the final spending bills
will likely bear only a passing resemblance to the analysis
outlined here and presents just one scenario for how the
budgets could affect R&D.
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