Highlights
-
The House would provide $77.6 billion for
Department of Defense (DOD) R&D programs in FY 2008, a cut of 0.8 percent
or $641 million from this year’s total (see Table A).
But the House could add $2.9 billion or more
in supplemental development funds this fall to make the final 2008 total an increase.
- House appropriators
would add hundreds of millions to DOD’s future-oriented investments, primarily
for earmarked projects, but would still leave funding down from this year’s funding
level. DOD proposed to slash “Science and Technology” (S&T) spending 22 percent
or $3.1 billion down to $10.9 billion, erasing seven years of gains; [the House
would add back $1.7 billion, $1.5 billion of it in earmarks, to bring DOD S&T
to $12.6 billion, down 9.7 percent (see Table C).]
S&T funding, which includes basic research, applied research, medical research,
and technology development, would fall to 2.63 percent of the regular DOD budget.
-
DOD’s support of basic and applied research would fall in the FY 2008 House appropriation,
though not as much as DOD requested. Basic research (“6.1”) would fall 0.5
percent to $1.6 billion, keeping funding roughly even in real terms with the last
seven years (see Table A). [The Hosue bill would cap
indirect costs on basic research grants at 20 percent. Applied research (“6.2”)
would fall 4.8 percent to $5.1 billion, despite House additions of $718 million,
almost entirely for earmarks.] The research-oriented Defense Advanced Research
Projects Agency (DARPA) would see its budget fall 2.5 percent to $3.0 billion
(see Table B).
-
The Air Force would be the big winner in the
2008 budget. Air Force R&D would
climb 6.7 percent to $26.2 billion because of increases to various space and classified weapons development programs, and is certain
to climb even higher when supplemental funds are added later in the year (see
Table B). Among the Defense Agencies, the House would
boost funding tremendously for the Chemical and Biological Defense Program (CBDP)
to $1.1 billion, a 17 percent increase.
DOD R&D in FY 2008 House Appropriations
On
July 25, the House Appropriations Committee approved its version of the FY 2008
Defense appropriations bill (HR 3222) providing funding for most of the Department
of Defense (DOD). [The full House debated and approved the bill on August 4.]
The House bill contains nearly $460 billion
in 2008 discretionary spending for most of DOD’s programs. A separate bill funds
DOD military construction accounts, and the Defense bill excludes (for the moment)
more than $140 billion in supplemental funds requested for ongoing war operations
that Congress plans to consider this fall and could add to the Defense bill in
House-Senate conference.
The House Defense bill appears to provide less
for DOD R&D in 2008 than the current year, the first time in more than a decade
that DOD R&D would decline (see Figure 1). But the primary reason DOD R&D
would decline $641 million or 0.8 percent to $77.6 billion in the House appropriation
(see Table A) is that Congress has not yet considered
$2.9 billion in development funds requested as part of a $140+ billion 2008 supplemental
war funding package. Since Congress is expected to approve most of the supplemental
request intact, the final DOD R&D total for 2008 is likely to be another large
increase when all is said and done, and will almost certainly be another record
high. Thus, the decline in defense R&D shown in Figure 1 for 2008 is likely
to be temporary.
In the meantime, House appropriators would
add $1.4 billion to the regular Pentagon R&D request, roughly half for research
and half for development, to moderate proposed cuts in both research and development
programs. (All figures in this analysis
exclude the $2.9 billion supplemental request from the FY 2008 Request figures
to facilitate comparisons with FY 2008 House figures. FY 2007 figures INCLUDE $1.1 billion in 2007 supplemental R&D
funding enacted in May.)
On the research side,
the House would add $845 million to the Pentagon’s request for basic and applied
research, [nearly all of which ($820 million) would go to earmarked projects,]
to turn steep requested cuts into more moderate cuts. Although physical sciences research is a top priority for the Bush Administration
on the nondefense side of the budget through continued support of the American
Competitiveness Initiative (ACI), DOD support of research would fall in 2008 even
though DOD is the fifth largest federal supporter of the physical sciences.
DOD basic research funding (the “6.1” category) would fall 0.5 percent in the
House mark to $1.6 billion, [a slight cut of $8 million compared to a $136 million
requested cut after the House's addition of $119 million in "6.1" earmarks
and some small program increases.] Since
2001, basic research has remained at roughly $1.5 billion in today’s dollars (see
Figure 2), a trend the House would continue. The Pentagon has proposed steep cuts
to “6.1” funding every year in recent years, primarily from the proposed
elimination of congressional earmarks of the year before, but every year Congress
adds them back in. Basic research in the three services would fall in the House
appropriation, but funding for basic research in the Defense Agencies would increase
11 percent to $331 million. Funding for the three-service University Research
Initiatives, which awards basic research grants competitively to university performers,
would receive a combined $272 million, down 5.4 percent from 2007 though up from
the request. The Defense Research Sciences program, funded in the three services
and in DARPA, would receive a combined $970 million, down 1 percent instead of
a 6 percent requested cut. The largest increase among basic research programs
would go to the fledgling National Defense Education program (NDEP), more than
doubling from $19 million this year to $44 million in 2008. (For details of DOD
R&D in the FY 2008 budget request, see Chapter 5
of AAAS Report XXXII: R&D FY 2008 or the
February 21 AAAS R&D Funding Update on DOD.)
Figure 1. (Click on the image for PDF)
[A provision in the House Defense bill would limit indirect cost reimbursements
on basic research grants to 20 percent. Currently, university and other external
research performers are reimbursed for indirect costs associated with the performance
of research at rates negotiated through a government-wide process overseen by
the Office of Management and Budget (OMB). Leading research universities usually
receive indirect cost reimbursements exceeding 50 percent of direct costs, so
the House provision could dramatically reduce "6.1" research awards
to many institutions., but particularly universities. Half the "6.1"
research portfolio goes to universities (48 percent in 2006), but only 17 percent
to other external institutions; 35 percent is performed in DOD labs and would
not be affected by the provision. The provision only applies to basic research
grants; roughly 40 percent of all DOD R&D to universities comes from the "6.1"
accounts, so many universities would feel a big impact. Among other federal agencies,
only some extramural U.S. Department of Agriculture (USDA) research grants have
an indirect cost cap, in most years at 20 percent. Other agencies do not have
indirect cost limits.]
The House would add $718 million to the request
for applied research (the “6.2” category) for a 4.8 percent cut instead of an
even steeper cut in the DOD request. [Despite the additional House dollars, nearly all ($701 million) for earmarked
projects, applied research in the three services and the Defense Agencies would
all fall compared to 2007 because the number of earmarks would be less than last
year (see Table C). Bucking the trend would be a
35 percent increase in applied research in the Chemical and Biological Defense
Program to $349 million, mostly for the core program rather than for congressionally
designated projects.].
In a repeat of the usual pattern,
the House would restore funding to medical research programs the Pentagon proposes
to cut. The House would give medical research in the Defense Health Program $454
million (see Table A), down from $680 million this year but more than triple the
request, including $218 million (the same as this year) for breast, ovarian, and
prostate cancer research through peer-reviewed, competitively awarded grants.
Over the years, the DOD peer-reviewed program has become a major force in cancer
research; by comparison, NIH spending on these three cancers totals $1.2 billion
this year. In addition to these congressionally initiated but peer reviewed research
programs, there are several earmarked medical research projects in this account
and hundreds of millions of dollars in earmarked medical research programs in
Army accounts.
Figure 2. (Click on the image for PDF)
DOD funding of “S&T” (the “6.1” through
“6.3” categories plus medical research) would fall to $12.6 billion in FY 2008,
a dramatic drop of 9.7 percent (see Table C and
Figure 2), with cuts in all categories. [Despite the House adding $1.7 billion
to the request for S&T, $1.5 billion of which would go to earmarks, the additional
dollars would not be enough to reverse the $3.0 billion or 22 percent cut in the
2008 request.] For every year this decade, Congress has been far more supportive
of S&T funding than the Pentagon. In what has now become an annual ritual,
the Pentagon proposes sharp cuts each year and Congress adds billions of dollars
in the appropriations process. Last year, the Pentagon requested a 19 percent
cut in S&T, but Congress ended up appropriating just a 1 percent cut, primarily
but not entirely through the addition of earmarks. So far, this year’s 2008 appropriations
season looks to be the same, though the Pentagon’s requested cut is so steep that
the House is unable to bring S&T funding back to 2007 funding levels in its
2008 appropriations.
Advocates
of DOD S&T in the science and engineering community argue that S&T funding
is essential for building the knowledge and technology base for future DOD needs.
Over the past decade, there has been growing support inside and outside the Pentagon
for setting 3 percent of the DOD budget as a goal for the proper level of S&T
investment. But the Pentagon has never fully endorsed this goal: although the
2001 Quadrennial Defense Review, DOD’s military strategy document, included the
3 percent goal, the 2005 QDR does not contain it, and the annual DOD budget request
has never met the 3 percent figure. It has been up to Congress to boost S&T
funding so that the last six budgets have met that goal (after taking out Iraq
and Afghanistan
war spending). In 2007, DOD S&T equals 3.2 percent of the regular DOD budget
(excluding emergency war funding), but the House 2008 appropriation would fall
short with a ratio of 2.6 percent.
The House 2008 appropriation would mark a
continuing retreat from DOD S&T’s record-high 2005 funding level in real terms
(see Figure 2). DOD S&T increased in the first half of this decade after
hitting post-Cold War lows in the late 1990s. The good news in the House appropriation
is that the House-proposed cuts would be concentrated in the “6.3” programs (down
14 percent), meaning that “6.2” funding would remain close to recent funding levels,
while “6.1” funding would remain flat at the average of $1.5 billion in today’s
dollars over the last seven years.
Air
Force weapons development programs would be the biggest winners in the 2008 budget.
DOD weapons development (the non-S&T portion of DOD R&D) would increase
$722 million or 1.1 percent to $64.9 billion in the House, entirely due to an
enormous increase in Air Force R&D to an unprecedented $26.2 billion (up 6.7
percent), a total likely to go even higher when 2008 supplemental appropriations
are added (see Table B and Figure 3). The Air Force increase would go to programs
in the “6.4” and higher categories for engineering, development, and testing work
on specific weapons systems. By contrast, Navy R&D would fall sharply and
Army R&D would increase slightly (see Figure 3). The Joint Strike Fighter
(JSF) would receive $4.2 billion for continued development, split between the
Air Force and the Navy, to remain the largest single development project. The
suite of Army programs known as the Future Combat Systems (FCS) would receive
$3.2 billion for development, well below the request and the $3.4 billion current
year total.
Figure 3. (Click on the image for PDF)
R&D
in the Defense Agencies would fall $1.2 billion or 5.7 percent to $20.7 billion
(see Table B). The research-oriented Defense
Advanced Research Projects Agency (DARPA) would see its budget decline $78 million
or 2.5 percent in the House. Slightly more than half of DARPA’s budget goes to “6.1” and “6.2” activities,
with the remainder devoted to “6.3” technology development. Its broad research
portfolio is aimed at expanding the frontiers of knowledge and military
technology to provide future solutions to DOD’s technology needs. DARPA’s basic
research funding would increase 12.5 percent in the 2008 House appropriation to
$163 million, but its applied research programs are a mix of increases and decreases
combining for a net cut, due partly to congressional frustration that DARPA has
been unable to spend all of its past budgets. The House would spotlight the Defense
Threat Reduction Agency (DTRA) with a 2.4 percent increase to $467 million instead
of a requested cut; the House would give DTRA, primarily an applied-research agency,
$26.5 million in new funds for R&D on fissile material detection devices.
The Chemical and Biological Defense Program (CBDP) is another relatively research-oriented
agency, devoting nearly 40 percent of its resources to research. Within a $1.1
billion total budget (up 17 percent), CBDP applied research would increase 35
percent to $349 million, but its “6.1” basic program would fall 3 percent to $101
million, primarily from the transition of several projects from the basic to the
applied phase.
Among other Defense Agencies, the Missile Defense
Agency (MDA) remains the largest with a House appropriation of $8.5 billion, down
$883 million or 9.4 percent from 2007 because of House concerns about unrealistic
missile defenses deployment schedules (see Table B). MDA no longer funds research
and is a development-oriented agency with almost all of its funding in the “6.4”
category; its budget has grown dramatically in recent years (see Figure 3) and
would remain high by recent historical standards even after the House cut.
Impacts of Defense R&D
The
Department of Defense (DOD) is by far the largest supporter of R&D in the
federal government, accounting for more than half the total federal R&D portfolio.
Defense-related R&D is also funded by the Department of Energy (DOE), which
is responsible for maintaining the U.S.
nuclear weapons stockpile, and the new Department of Homeland Security (DHS),
whose primary mission is homeland defense but also performs biodefense R&D
related to military security (see Figure 1). The House would bring total defense
R&D in 2008 to $81.6 billion (see Table D), down
0.7 percent or $614 million from the current year but headed to a record total
once 2008 supplemental appropriations are added this fall.
Outlook for Defense R&D
[The
full House debated and approved the Defense bill on August 4, just before the
August congressional recess.] The Senate Appropriations Committee is expected
to mark up its version of the bill in September. Congress will try to send a final
version of the bill to President Bush before the October 1 start of FY 2008; appropriators
are likely to add more than $140 billion in supplemental appropriations in House-Senate
conference to pay for war operations, though the supplementals could also be considered
in a separate bill. Although President Bush has threatened vetoes of many of the
domestic spending bills for exceeding his budget requests, the Defense bill will
come in well under his request and is not expected to attract a veto unless Congress
succeeds in attaching policy language limiting the Iraq
war.
-
July 31, 2007 (updated August 16)
AAAS R&D Budget and Policy Program
1200
New York Avenue, NW
Washington, DC 20005
(202) 326-6607
AAAS R&D
Web site: http://www.aaas.org/spp/rd
