(This Preview Report is a summary of AAAS estimates
and analyses of final FY 2001 appropriations for federal R&D.
This is a preview of the forthcoming publication Congressional
Action on Research and Development in the FY 2001 Budget. (Ordering
information is on the last page).)
On December 15, more than two months into fiscal year (FY) 2001, President Clinton and the 106th Congress finally reached agreement on FY 2001 appropriations, including federal support for R&D. President Clinton will sign the agreement into law this week. The final omnibus appropriations bill is a compilation of four out of the 13 annual appropriations bills and dozens of pieces of unrelated legislation, and contains a 0.22 percent across-the-board cut for most appropriated programs. Nine FY 2001 appropriations bills were enacted separately earlier in the year; the across-the-board cut applies to programs in these bills, also. (All figures in this report and in the tables have been adjusted to reflect the cut.)
The outgoing 106th Congress and President
Clinton have agreed to provide record increases for R&D programs
throughout the federal government, and have provided substantial increases
to nearly all categories of R&D spending and most R&D funding
agencies. Total federal R&D exceeds $90 billion for the first
time in FY 2001 to reach $90.9 billion, an increase of $7.6 billion
over the FY 2000 funding level (up 9.1 percent).
Every year, AAAS analyzes appropriations for R&D
as signed into law and provides detailed estimates on the federal investment
in R&D for the new fiscal year in the publication Congressional
Action on Research and Development. The FY 2001 printed edition
will be published in mid-January; the full text
is available on line. Detailed information on the largest R&D
funding agencies, historical tables, and other supplementary materials
will also be available on the AAAS R&D Web
site. This preview report offers selected highlights from the book.
Highlights of Federal R&D in FY
2001
After 21 continuing resolutions (temporary appropriations bills), President Clinton and the 106th Congress finally reached agreement on FY 2001 appropriations on December 15. Although the final funding levels for most R&D programs had been determined long before then, agencies such as the Department of Commerce and the National Institutes of Health (NIH) had to wait until this week to receive their final appropriations.
o In FY 2001, total federal support of R&D exceeds
$90 billion for the first time, thanks to a record dollar increase
of $7.6 billion over FY 2000. Because of increases across the entire
breadth of R&D programs in the federal portfolio, federal R&D
totals $90.9 billion in FY 2001, an increase of 9.1 percent (see
Table 1). This total far exceeds the request for $85.4 billion,
primarily because Congress allocates far more for R&D in the Department
of Defense (DOD) and NIH, the two largest R&D funding agencies,
than requested.
o Nearly every major R&D funding agency receives a substantial increase over FY 2000, and most receive more than the Clinton Administration request (see Figure 1). Of the major R&D funding agencies, only the National Science Foundation (NSF) receives less for R&D than requested, but NSF still receives 13.2 percent more for R&D than in FY 2000. (Details of final agency R&D appropriations are available on the AAAS R&D Web site, or by clicking on the links in the on-line version of this document.)
Figure 1. (click on the image to view or download
a full-page version of this chart)
o Nondefense R&D increases by more than 11
percent to reach $45.3 billion, a boost of $4.6 billion. In addition
to a 14.6 percent or $2.5 billion increase in NIH R&D, there are
substantial increases to other nondefense agencies. R&D in the Department
of Energy (DOE) increases by 12.3 percent to reach $8.0 billion, including
a 13.8 percent boost to programs in the Office of Science; NSF R&D
increases by 13.2 percent to $3.2 billion, with substantial boosts to
all the research directorates; and Science, Aeronautics, and Technolgy
(SAT) R&D in the National Aeronautics and Space Administration (NASA)
increases by nearly 11 percent.
o Defense R&D increases by a smaller but still substantial 7.0 percent to $45.5 billion, bringing defense and nondefense R&D near parity for the first time in 20 years. Although defense R&D has exceeded nondefense R&D every year since the defense buildup of the early 1980s, the gap has narrowed in recent years. DOD basic research ("6.1") increases by nearly 13 percent, while applied research ("6.2") jumps by nearly 8 percent. Although the Clinton Administration requested a steep cut in DOD's "S&T" investments (basic and applied research plus exploratory development), Congress awarded an 8.0 percent increase (see Figure 1). DOE's defense R&D continues the gains of recent years with a 12.0 percent gain in FY 2001, including expanded investments in defense computing and stockpile stewardship activities.
o In his budget request, President Clinton placed a strong emphasis on achieving a better balance among science and engineering disciplines. A series of large increases for the National Institutes of Health (NIH) has resulted in an emphasis on biomedical and life sciences research in recent years within the federal research portfolio, and in response the FY 2001 budget proposed large increases for R&D programs in non-life sciences disciplines. Although NIH receives a 15 percent increase for the third year in a row, non-biomedical research also wins big this year. NSF, the only R&D funding agency responsible for the entire range of science and engineering disciplines, with a particular emphasis on fundamental research and non-life sciences disciplines, receives the largest dollar increase in history which translates into a 13.2 percent boost for its R&D programs. DOE's Science programs, which support fundamental research in the physical sciences, receive a 13.8 percent boost to $3.0 billion. As a result, nondefense R&D excluding NIH increases by 8.9 percent in FY 2001, a smaller increase than NIH but a sharp contrast to stagnant or declining funding in recent years. In addition, DOD support of basic (up 13 percent) and applied research (up 8 percent), which supports a range of physical sciences and engineering disciplines, also increases.
o The Clinton Administration's multi-agency initiatives do well in FY 2001, though in general funding levels fall short of the dramatic increases the Administration requested. Final estimates on these initiatives' budgets are sketchy because agencies have considerable freedom to allocate funding within budget accounts. The Administration's new Nanotechnology initiative proposed to double funding for existing nanotechnology programs from $247 million in FY 2000 to $495 million in new and continuing programs in FY 2001; the final FY 2001 total is an estimated $418 million, up 55 percent over last year. NSF's leading role in the initiative was reduced from a proposed $217 million down to $150 million, but this still represents a more than 50 percent boost over the $97 million FY 2000 funding level.
o The Information Technology R&D initiative also does well in FY 2001: NSF's $215 million for IT Research represents a dramatic jump from $90 million in FY 2000, though it falls short of the $280 million request. NSF also receives funding to construct a second terascale (trillions of operations per second) computing site for $45 million, and receives a 24.5 percent increase for the budget (including IT research) of the Computer and Information Science and Engineering (CISE) directorate. Total IT R&D spending should total $2.1 billion in FY 2001, an increase of nearly 24 percent over FY 2000. The largest supporter of IT R&D is DOE with $657 million, including substantial investments in both its defense and science portfolios.
o Basic and applied research receive large increases
in FY 2001 appropriations (see Table
2). Federal support of basic research, the majority of which is
performed in the nation's colleges and universities, increases by 11.8
percent or $2.2 billion to $21.2 billion because of across-the-board
increases to agencies' basic research-oriented programs, including increases
of greater than 10 percent for basic research in NIH, NSF, and DOD.
Folding in applied research, total federal support of research (basic
and applied) is $41.2 billion in FY 2001, a jump of $4.7 billion or
12.8 percent over FY 2000. Again, there are across-the-board increases
to agencies' research portfolios, with six agencies (NIH, NSF, DOE,
DOD, NASA, DOT) receiving increases greater than 10 percent.
Figure 2. (click on the image to view or download a
full-page version of this chart)
o Nondefense R&D reaches an all-time high in FY 2001, the fifth year in a row that nondefense R&D has increased in inflation-adjusted terms (see Figure 2). Much of the recent increase, however, has been due to steady growth in the NIH budget, including increases of nearly 15 percent for three years in a row. As a result, NIH R&D has become nearly as large as all other nondefense agencies' R&D funding combined. Funding for nondefense R&D excluding NIH has stagnated in recent years; after steady growth in the 1980s, funding peaked in FY 1994 and then declined sharply as a result of tight budget conditions in the mid-1990s. After hitting bottom in FY 1996, small increases from FY 1997 through FY 2000 barely kept pace with inflation. The FY 2001 increases for non-NIH agencies, while large, just barely brings these agencies back to the funding levels of the early 1990s.
o Most categories of R&D by national mission rise in
FY 2001 (see Table 3). Health and defense-oriented
R&D both rise by nearly $3 billion. General science R&D increases
by 13.5 percent to $6.2 billion because of large increases for NSF and
programs in DOE's Office of Science. Agriculture R&D increases 10.6
percent to $1.7 billion, mostly because of an unusually large number
of congressionally designated research projects.
o The "21st Century Research Fund"
rises by 12.1 percent in FY 2001 to $44.9 billion (see
Table 4). Most of this increase is due to a 14.4 percent increase
to the total NIH budget, although there are increases for nearly all
the programs in the Fund. The Clinton Administration created the Fund
to highlight programs that it considers important to the nation's science
and technology enterprise. The Fund includes both R&D and non-R&D
items while excluding large parts of the federal R&D portfolio (primarily
in development).
R&D Appropriations for Key Agencies
Full information on final funding levels and program
details for individual agencies can be found in revised AAAS R&D
Funding Updates on the AAAS R&D Web site.
(The on-line version of this document features PDF links to the agency
updates). Please see also the agency sections in Congressional Action
on R&D in the FY 2001 Budget.
· Department
of Defense (DOD) R&D totals $41.8 billion, $3.3 billion
more than the request and $2.5 billion or 6.4 percent more than FY 2000.
DOD's basic research ("6.1") totals $1.3 billion, 12.8 percent above
FY 2000, while applied research ("6.2") totals $3.7 billion, 7.7
percent above FY 2000. Including DOD's medical research programs, DOD
S&T ("6.1" through "6.3" programs, representing DOD's investments
in basic and applied research and technology development) increases
by 8.0 percent to $9.4 billion. There is a separate $349 million
appropriation for congressionally designated medical research, including
$175 million for breast cancer research. The Defense Advanced
Research Projects Agency (DARPA) budget increases by $121 million
or 6.4 percent to $2.0 billion, including increases for DOD's contributions
to the multi-agency IT R&D initiative.
· The National
Institutes of Health (NIH) is once again the beneficiary of
strong congressional support for biomedical research. The NIH budget
of $20.4 billion represents a $2.6 billion or 14.4 percent increase
over FY 2000, keeping NIH on the third year of a course toward doubling
its budget in five years. Every institute receives an increase greater
than 13 percent, and three receive increases greater than 20 percent.
There is a new NIH institute in FY 2001: the National Center on Minority
Health and Health Disparities receives $130 million for its inaugural
year for research on diseases and conditions that disproportionately
affect minority groups. NIH plans to begin funding stem cell research
in 2001 after putting into place a review board and strict guidelines
on stem cell derivation; the final NIH budget does not contain a prohibition
on stem cell research, but President-elect Bush has stated that he may
take steps to block NIH funding of such research.
· The
National Aeronautics and Space Administration's (NASA) total
budget of $14.3 billion in FY 2001, 4.8 percent more than FY 2000, is
another piece of good news in 2000 after a bad 1999 of lost missions
and cost overruns. Total NASA R&D, which excludes the Space Shuttle
and its mission support costs, increases 5.3 percent to $10.3 billion.
The big winner is the Science, Aeronautics, and Technology (SAT) account,
which receives $6.2 billion, a stunning 10.7 percent above FY 2000.
Space Science has 13.2 percent more than last year for a total
of $2.5 billion, including funding for a completely redesigned Mars
program for the next decade. NASA receives $2.1 billion for continued
development and construction of the International Space Station, $213
million less than FY 2000 because of a planned reduction in costs after
several cost overruns last year. The Space Station now has a permanent
three-person crew in three connected modules, with more modules on the
way in 2001.
· The
Department of Energy (DOE) went from crisis to crisis in
2000 but total DOE R&D in FY 2001 rises 12.3 percent to $8.0 billion.
In March, DOE moved its weapons-related activities to a new semi-autonomous
agency within DOE called the National Nuclear Security Administration
(NNSA). The Weapons Activities program, the cornerstone of NNSA's
mission to use science-based methods to ensure the safety and reliability
of the nation's nuclear stockpile, receives $2.5 billion for its R&D,
a boost of 13.7 percent, including $477 million, up $80 million over
FY 2000, for the Accelerated Strategic Computing Initiative. Despite
controversies over ballooning project costs, construction of the National
Ignition Facility (NIF) receives $199 million, far more than the original
$74 million request in February. In the Science account, Congress provides
$3.0 billion for R&D, a substantial 13.8 percent boost consistent
with the Clinton Administration's proposal for a more balanced research
portfolio. The big winner in Science is Basic Energy Sciences, which
receives $1.0 billion for R&D in FY 2000 (up 29.7 percent). Most
of the increase is for the Spallation Neutron Source ($279 million,
nearly double the FY 2000 funding level). Advanced Scientific Computing
Research increases from $128 million to $168 million, a boost that will
allow DOE to expand its participation in the IT R&D initiative.
Other Science programs receive modest increases.
· Congress provides the
National Science Foundation (NSF) with
a large increase in FY 2001 to $4.4 billion, an increase of 13.3 percent.
NSF's R&D funding, which excludes NSF's education and training
activities and overhead costs, totals $3.2 billion (up 13.2 percent).
Congress provides less than the requested 20 percent increase in NSF
R&D, but the final budget contains substantial increases for most
programs. Two research directorates receive increases of approximately
20 percent: the Computer and Information Science and Engineering (CISE)
directorate receives $483 million (up 24.5 percent), allowing CISE to
expand dramatically its participation in the IT R&D initiative;
the Social, Behavioral, and Economic Sciences (SBE) directorate receives
$176 million for a boost of 20.6 percent, including funds for a new
Children's Research initiative. The large increase may be the first
year of an effort by NSF supporters to double the NSF budget over five
years.
· Funding for the Department
of Commerce's R&D programs increases
slightly in FY 2000. The National Institute of Standards and Technology
(NIST) sees its R&D budget decline 8.5 percent to $419 million because
funding for NIST's Construction of Research Facilities declines from
$107 million to $35 million; most of the FY 2000 funding was a one-time
appropriation for a new Advanced Measurement Laboratory. NIST intramural
laboratory R&D programs grow by 8.8 percent to $257 million. Funding
for Advanced Technology Program R&D grows by 6.8 percent to $123
million despite a House vote earlier this year to eliminate the program.
The National Oceanic and Atmospheric Administration's (NOAA) programs
for natural resources and environment R&D increase by $47 million
or 8.0 percent to $638 million.
· Thanks to a windfall
of congressionally designated projects and a last-minute decision to
allow a new mandatory grants program to proceed, U.S.
Department of Agriculture (USDA) R&D totals $2.0 billion
in FY 2001, a boost of $190 million or 10.8 percent. Congress allows
the Initiative for Future Agriculture and Food Systems (IFAFS) program
to spend its $120 million allotment of mandatory funds in FY 2001 on
its program of competitively awarded research grants, after earlier
attempts to block it. Other competitively awarded research grants decline:
the National Research Initiative receives only $106 million, well below
$119 million in FY 2000. Instead, Congress directs millions to congressionally
designated research projects, including $85 million (up 33.9 percent)
for Special Research Grants and $51 million in one-time projects in
the June crop insurance bill.
· The Department
of the Interior's (DOI) R&D budget
rises 4.2 percent to $597 million. The U.S. Geological Survey receives
$543 million for its R&D, a substantial 8.1 percent increase over
FY 2000.
· The Environmental
Protection Agency (EPA) has an FY 2001
R&D budget of $686 million, $39 million or 6.0 percent more than
last year. The R&D total exceeds the request of $673 million, but
Congress reduces the request for R&D in the Climate Change Technology
Initiative; most of the increase goes to more than 30 congressionally
designated research projects, leaving most other EPA R&D programs
with level funding.
· The Department
of Transportation (DOT) has an R&D budget of $701 million,
a substantial boost of 15.5 percent or $94 million over FY 2000. The
Federal Aviation Administration receives $292 million for R&D, a
large gain of 29.3 percent because of guarantees of increased funding
for FAA programs which became law earlier this year. Most DOT highway
and traffic safety R&D programs increase substantially because of
guaranteed funding increases written into a 1998 transportation law.
The full report offers 17 detailed funding tables,
several charts, a chronology of the events in the FY 2001 budget process,
an analysis of funding trends, and analyses of the impacts of the FY
2001 budget on each of the major R&D funding agencies. Individual
agency analyses, historical tables, agency funding tables, and charts
of recent funding trends are also available (left margin of this page).
Go to Tables
1-5
Total U.S. R&D Funding in 2000
and Other Funding Trends
The good news for federal R&D in FY 2001 follows the good budget news of FY 2000, when the federal government recorded its largest budget surplus in history. The final FY 2000 surplus was $237 billion, the largest surplus ever and the third year in a row of surpluses. At 2.4 percent of Gross Domestic Product (GDP), it was the largest surplus as a share of the economy since 1948. It was also nearly double the FY 1999 surplus of $124 billion. The non-Social Security surplus was $87 billion in FY 2000, the second such surplus in a row, up dramatically from $1 billion in FY 1999. As a result of these surpluses, the federal government has been paying off the national debt to the public for the past three years, and as a percentage of the economy the national debt is shrinking dramatically. The most current budget projections show even larger unified and non-Social Security surpluses in FY 2001, but in wrapping up the FY 2001 appropriations process Congress and the President increased discretionary spending dramatically to $635 billion (well above the $611 billion assumed in the projections, the amount necessary to keep pace with inflation), eating into projected surpluses. There is also increasing concern that the U.S. economy is heading toward a period of slower growth, which would reduce tax revenues and could thus drastically reduce and perhaps even eliminate projected surpluses.
Figure 3. (click on the image to view or download a
full-page version of this chart)
As the federal investment in R&D, the U.S. economy, and
the federal budget surplus all expand, and the national debt continues
to shrink, there is also good news from U.S. industry. Once again, the
total U.S. R&D enterprise continues to grow. Recently, the
National Science Foundation (NSF) released its preliminary projections
for total U.S. R&D in calendar years 1999 and 2000, including industry-funded
R&D. NSF estimates that total U.S. R&D performance in 2000 will
be $264 billion (see Figure 3 and Table
5). This represents a 7.9 percent or nearly $20 billion increase
over the $245 billion total in 1999, which itself was a 7.5 percent
increase over 1998.
As shown in Figure 3, since 1994 total U.S. R&D has expanded dramatically due almost entirely to substantial increases in R&D funding from industrial firms. In 2000, U.S. industry is expected to spend $179 billion on R&D with its own funds, an increase of 10.3 percent over the previous year, far outstripping the more modest growth in federal R&D. As Figure 3 shows, industry has consistently expanded its share of total U.S. R&D over the past four decades, and now funds two-thirds of total U.S. R&D. Other funding sources for R&D, though far smaller in dollar terms, are also expected to increase their R&D spending. This remarkable growth in industry R&D has been fueled by a record-setting economic expansion over the past ten years, the rapid growth of technology-dependent industries such as information technology and biotechnology relying heavily on R&D for future growth, and the ever-increasing importance of new technology as a key element in economic competition for a broad range of industries.
These increases in U.S. R&D spending cover all character-of-work categories. Despite worries in the mid 1990s that industry would cut back on its support of basic research, according to the NSF analysis industrial firms are expected to fund $14.8 billion of basic research in 2000, an increase of 10.0 percent. This increase is far higher than the increase in federal support of basic research (up 5.1 percent), although the federal government continues to be the majority sponsor of basic research. Applied research and development are also expected to grow.
Because growth in total R&D is once again expected to exceed growth in the U.S. economy as a whole as measured by the Gross Domestic Product (GDP), NSF estimates that total U.S. R&D will reach 2.72 percent of GDP in 2000, up from 2.65 percent in 1999 and the highest share since 1967.
Heading into 2001, however, there is some doubt as to whether
these large increases for industrial R&D can be sustained. In late
2000, there were abundant signs that the decade-long U.S. economic expansion
was, if not coming to an end, at least entering a period of slower growth.
Historically, industrial R&D has closely tracked the business cycle,
so an economic slowdown may lead many companies to curtail their R&D
activities. There is some question as to whether this historical correlation
will hold up in the next economic slowdown or recession; some economists
believe that heavily R&D-dependent high-tech industries will continue
to invest heavily in R&D in the search for new technological breakthroughs
regardless of economic conditions.
Go to Tables
1-5
Publication Information
The AAAS publication Congressional
Action on Research and Development in the FY 2001 Budget, from
which this preview report is excerpted, will be available in mid-January
from AAAS. The full report, and supplementary material including
detailed agency funding analyses, historical tables, and charts illustrating
recent R&D funding trends, is now available
on-line. Ordering information is as follows:
Congressional Action on Research and Development
in the FY 2001 Budget, Kei Koizumi, Albert H. Teich, Stephen
D. Nelson, Joanne Padrón Carney, 2000. $10.95; $8.75 to AAAS
members.
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