2 - Overview of R&D Trends

3

Agency R&D Budgets

Department of Defense (DOD)

DOD's R&D budget increases in FY 2000 as a result of a strong congressional commitment to increasing total U.S. defense spending. In this year's appropriations, President Clinton requested cuts in DOD's R&D budget for the fifth year in a row, and for the fifth year in a row the Republican-controlled Congress granted an increase. DOD R&D receives a 3.0 percent or $1.1 billion boost to $39.1 billion for FY 2000 (see Tables 4 and 5). The appropriation is $4.0 billion more than the request, spread over all categories of DOD spending.

DOD funding of basic and applied research is above both the President's request and the FY 1999 funding level. DOD's basic research ("6.1") totals $1.2 billion, 5.4 percent above FY 1999. In recent years, the House has proposed cuts to basic research, the Senate has proposed increases, and the final appropriations have split the difference, but this year there was broad agreement that the basic research accounts of all the services needed increases. The applied research ("6.2") total is $3.4 billion, an increase of $237 million or 7.5 percent. This total is $429 million more than the request. As a result, total DOD support of research (basic plus applied) is $4.6 billion, 7.0 percent more than FY 1999.

The "6.1" and "6.2" research accounts provide a significant share of federal support for several key science and engineering disciplines. DOD provides nearly a third of all federal support for engineering research, and a majority of federal support for some key engineering subfields. DOD also provides more than 40 percent of total federal support for computer sciences research, and plays a strong funding role in other disciplines such as mathematics, oceanography, medical sciences, chemistry, physics, and environmental sciences. In recent years, cuts in "6.1" and "6.2" have resulted in shrinking DOD support for many of these disciplines, especially engineering research. The FY 2000 increases for DOD research should help to reverse the downward trends, but will still leave support for these disciplines well below mid-1990s levels. Even with a 5.4 percent increase in FY 2000, for example, DOD's "6.1" funding remains more than 20 percent below the FY 1993 level in inflation-adjusted terms.

This year, the DOD budget contains a separate $274 million appropriation, outside the regular R&D accounts, for medical R&D (see Table 4). In past years, Congress has appropriated these unrequested funds for medical research in the Army's "6.3" accounts. This appropriation for peer-reviewed, competitively awarded research grants continues the recent expansion of DOD's effort in medical research. The $274 million total is divided into $175 million for breast cancer research (up from $135 million in the Army in FY 1999) and $75 million for prostate cancer research (up from $58 million), with an additional $24 million for peer reviewed research on other topics.

The "6.1," "6.2," and "6.3" categories are often grouped together as "Science and Technology" (S&T). This category encompasses basic research, applied research, and generic technology development, which contribute to a broad knowledge base with potential applications to a wide variety of military as well as civilian uses. DOD S&T has declined steeply in recent years. In FY 2000, however, DOD S&T, including the medical research appropriations formerly appropriated within the "6.3" category, totals $8.7 billion, 11.0 percent more than FY 1999 and the largest increase by far in more than a decade.

Among the Defense Agencies, the budget of the Defense Advanced Research Projects Agency (DARPA) declines by $82 million or 4.2 percent to $1.8 billion (see Table 5). DARPA receives $30 million for the first year of Extensible Information Systems (down from a first-time request of $70 million). The program is a key part of DOD's contribution to the multi-agency Information Technology for the 21^st Century (IT²) initiative. DOD receives $60 million of a requested $100 million for IT².

The Ballistic Missile Defense Organization's (BMDO) budget falls 10.8 percent to $3.4 billion, but this is primarily because the FY 1999 total contains $770 million in last-minute emergency appropriations. The BMDO appropriation funds continued development and testing of national and theater missile defense systems, including nearly $1 billion ($953 million) for development of a national missile defense system.

In congressional debates this summer over the DOD budget, the most controversial item was the House's proposed deletion of procurement funds for the F-22 fighter, for a savings of $1.8 billion. The House would have provided $1.2 billion for continued R&D on prototypes for the F-22, while the Senate bill would have funded both procurement and R&D. The final Defense bill keeps the F-22 program alive, but delays procurement and provides extra funds for continued development and prototype testing in a special transfer account. The bill provides nearly $2 billion in development funds for the F-22, which contributes to the Air Force's 4.1 percent increase for its R&D activities to $14.3 billion.

Total DOD R&D is on a slight upswing after a decade of post-Cold War cuts. The DOD budget for R&D is 25 percent below the FY 1987 peak funding level in real terms but the trend in recent years has been slightly upward. While the 11.0 percent increase for S&T in FY 2000 is substantial, because of steep cuts in earlier years DOD S&T is still 6.1 percent below its FY 1994 level in inflation-adjusted terms.

National Institutes of Health (NIH)

NIH is once again the beneficiary of strong support for biomedical research from both branches of government. In a repeat of last year, NIH won the largest dollar increase in its history in FY 2000. The NIH budget of $17.8 billion represents a $2.2 billion or 14.3 percent increase over FY 1999 coming after a $2 billion increase last year, keeping the NIH budget on track in the second year of a plan to double the NIH budget in five years, as key congressional supporters of NIH have proposed (see Table 8). This amount is $1.9 billion more than the request of $15.9 billion.

In the FY 2000 budget process, both the House and the Senate proposed substantial increases for NIH and competed to fund NIH as well as possible. The House proposed $16.9 billion, 8.5 percent above FY 1999. The Senate would have been even more generous with an appropriation of $17.6 billion, exactly $2 billion above the FY 1999 level for an increase of 12.8 percent. The final FY 2000 omnibus bill, however, follows the higher Senate appropriation but adds even more money, for a total of $17.8 billion for NIH's budget (after factoring in the across-the-board cut), $2.2 billion or 14.3 percent more than FY 1999 (see Table 8). Excluding research training and overhead costs, NIH's R&D totals $17.1 billion, 14.4 percent more than FY 1999.

The generous appropriation, however, comes with a bizarre catch. The final bill delays the release of $3.0 billion of NIH's FY 2000 budget until September 29, 2000, one day before the end of FY 2000. The bill does not specify how this total should be distributed among the institutes, but it amounts to 17 percent of the total appropriation. This is an improvement, however, over the original proposal of $7.5 billion in delayed obligations included in the original Labor-HHS bill vetoed by the President. This budgeting trick allows Congress to appropriate a generous increase to NIH, but ensures that some of it will not actually be spent in FY 2000, helping to hold down federal spending in FY 2000 and thus keep the government from dipping into the Social Security surplus. The money will become available on September 29, but NIH will not be allowed to obligate it until that date; that is, NIH will not be able to award any grants or make commitments on how to spend the money until the end of the year. Because it will take NIH weeks to months to then disperse these funds, this money will not be spent until FY 2001.

Unless the provision is repealed, the Labor-HHS bill requires NIH to operate for nearly all of FY 2000 on less than its FY 1999 budget. The $2.2 billion increase is essentially canceled out by the withheld $3.0 billion in funds, leaving $14.8 billion for the first 364 days of FY 2000 compared to $15.6 billion for all of FY 1999.

Every institute (except the Office of the Director) receives an increase greater than 12 percent in the final bill (including the withheld funds), and five receive increases greater than 20 percent. The bill provides $90 million for the National Institute of Nursing Research (NINR), an increase of 28.4 percent; the Fogarty International Center (FIC), the unit of NIH with the smallest budget, receives $44 million, up 23.0 percent; the National Center for Research Resources (NCRR) receives $678 million, an increase of 22.1 percent, including $75 million for extramural facilities construction; and a 26.9 percent increase to the National Human Genome Research Institute (NHGRI) for a total of $336 million. NHGRI is on schedule to publish a "working draft" sequence of the human genome in spring 2000 and the complete sequence by 2003. The largest percentage increase goes to the newest institute, the National Center for Complementary and Alternative Medicine (NCCAM), which receives $68 million for its second year of existence, a substantial increase of $18 million or 37.0 percent.

The National Cancer Institute (NCI) once again has the largest budget with $3.3 billion, an increase of 13.4 percent or $392 million. The National Heart, Lung, and Blood Institute (NHLBI) exceeds $2 billion for the first time with an appropriation of $2.0 billion, 13.3 percent more than FY 1999.

In addition to the regular NIH appropriation, there are additional funds from an account in the Office of the HHS (Health and Human Services) Secretary (see Table 9). The bill approves a transfer of $20 million from the Public Health and Social Services Fund to NIH. The $20 million funds a new program providing matching funds for cooperative R&D between NIH and the biotechnology, pharmaceutical, and medical device industries. The funds are planned to go toward R&D activities in biomedical research and biotechnology with commercial potential or promising therapies, and would become available if industry matched the federal funds.

Both the House and the Senate appropriated NIH HIV/AIDS research funds within individual institute budgets, instead of in a consolidated account as the Administration proposed, and the final bill retains this structure. Total NIH AIDS research is expected to be well over $2 billion.

Although the Senate bill originally contained a provision that would have allowed federal financing of research using stem cells, the provision was removed before the bill reached the Senate floor, and was left out of the final bill also. The provision would have reflected recent recommendations from the National Bioethics Advisory Commission, which recommended that NIH should finance research on stem cells derived from embryos created during fertility treatments that would otherwise have been destroyed. A separate bill will be introduced in the next session of Congress that will address this subject. The final omnibus bill retains a ban on NIH using its funds to create human embryos for research purposes or to perform any research in which human embryos are destroyed.

There are also increases for R&D programs in other agencies within the Department of Health and Human Services (HHS; see Table 9). R&D in the Centers for Disease Control and Prevention increases by 10.5 percent to $484 million, with an additional $49 million provided by transfer from the Office of the Secretary for bioterrorism-related R&D activities. Congress boosts R&D in the Health Care Financing Administration (HCFA) by $13 million to $63 million. HCFA finances R&D on health-care outcomes and alternative health-care delivery systems in Medicare and Medicaid. R&D in the Health Resources and Services Administration (HRSA) increases dramatically to $54 million because of a large increase in funding for rural health research. Total HHS R&D rises 14.9 percent to $18.1 billion.

Although other R&D funding agencies have struggled to maintain their budgets in the past several years, NIH has enjoyed extraordinary success on Capitol Hill and its budget growth is accelerating even as discretionary budgets get tighter. NIH has enjoyed steady growth in its R&D budget over the past two decades, and in many years Congress has awarded more than the request. NIH's budget growth has accelerated in the last few years, and in the most recent two years NIH has won increases of $2 billion, far more than the Clinton Administration had requested. These increases are intended as the first and second installments of a plan to double the budget in five years.

NIH's growth has been good for the life sciences, for which NIH is by far the largest federal supporter. Federal support for life sciences has expanded dramatically over the past few decades, while support for other disciplines, which rely on agencies other than NIH, has stayed constant or declined. NIH now accounts for nearly two-thirds of all federal support for R&D in colleges and universities, and in FY 2000 NIH, for the first time, will fund more than half of all federal support for basic research.

National Aeronautics and Space Administration (NASA)

NASA has had a rough year in 1999, with continuing problems in keeping the International Space Station on schedule, problems with the Hubble Space Telescope, and the embarrassing loss of a Mars spacecraft. This summer, the House proposed cutting NASA's budget by $1.4 billion, leading NASA to warn of possible closings of several NASA facilities. By the fall, however, the cuts were restored and the final NASA budget for FY 2000 is $13.6 billion, $64 million or 0.5 percent less than FY 1999, but slightly higher than the agency request. Total NASA R&D, which excludes the Space Shuttle program and its mission support costs, increases slightly by 0.6 percent to $9.8 billion (see Table 6).

The Science, Aeronautics, and Technology (SAT) account, which funds nearly all of NASA's R&D not related to the Space Station, receives $5.6 billion, a reduction of 1.2 percent from FY 1999 but $161 million or 3.0 percent more than the request. The final appropriation is close to the Senate proposal, in contrast to a proposed 12 percent cut in the House bill. The final bill provides $2.2 billion for Space Science, 2.7 percent more than FY 1999. Congress reduces funding for future Discovery and Explorer missions, which could result in fewer spacecraft launches over the next few years than NASA had planned, and also reduces funding for Mars missions in response to the recent loss of a Mars spacecraft. The bill instructs NASA to prepare a detailed report on the causes of the Mars mission's failure. There are increases for several congressionally designated projects and a $23 million increase for costs associated with the next servicing mission of the Hubble Space Telescope.

The Life and Microgravity Sciences and Applications (LMSA) account within SAT receives a $275 million appropriation, an increase of 4.3 percent. The increase is due to congressionally designated projects. The House-proposed bill sharply criticized NASA for scheduling only one life and microgravity sciences shuttle mission in the next few years. The final bill retains the House language instructing NASA to add another dedicated science mission by 2001, and provides science funds in LMSA and shuttle funds in Human Space Flight for that purpose. Earth Science receives $1.4 billion, slightly less than the request but 2.0 percent or $28 million more than FY 1999. There are more than a dozen congressionally designated projects, requiring offsetting cuts in mission reserves and other regular Earth Science accounts. Although the House proposed to terminate the Triana program, the final bill keeps it alive but directs NASA to suspend all work until the National Academy of Sciences completes an evaluation of the mission.

In the sharpest departure from NASA's priorities, Congress adds $142 million to the request for Aero-Space Technology, leaving the program with $1.1 billion, which is still 14.2 percent less than FY 1999. Although much of the increase over the request is for congressionally designated projects, the final bill also contains add-ons for R&D in ultra-efficient engine technologies, aircraft noise reduction, flight control, and space launch technologies. Congress also adds $40 million to the request for Academic Programs, resulting in a budget of $140 million, slightly more than last year. The supplement to the request is entirely for 16 congressionally designated projects.

The final NASA budget contains $2.3 billion for continued development and construction of the International Space Station, $70 million or 3.1 percent more than FY 1999 but $161 million less than NASA's request, partly because of a $100 million reduction from the request for development of a crew return vehicle. Although the Senate appropriated Space Station funds in a separate account to prevent NASA from siphoning funds from other Human Space Flight programs to cover cost overruns, the final bill preserves the existing Human Space Flight account structure. The non-R&D Space Shuttle program, the other major program within Human Space Flight, receives $3.0 billion, staying level with its current funding. The appropriation includes $40 million for an additional Space Shuttle science mission by 2001.

NASA R&D increased dramatically from FY 1986 to FY 1994 because of development of a replacement for the Space Shuttle Challenger, development of the International Space Station, and an expansion of NASA's earth science activities. Growth in the NASA budget stopped in the mid-1990s, and has declined in inflation-adjusted terms as a result of budget cuts and the agency's efforts to streamline its operations and produce cheaper space missions. The R&D appropriation for FY 2000 represents a 0.6 percent increase, significantly less than the 2 percent expected inflation rate, so once again NASA's R&D declines in real terms. NASA's R&D in FY 2000 is 6.5 percent below the FY 1994 funding level in inflation-adjusted terms (see Table A).

Although much of NASA's R&D funds development projects such as the Space Station, NASA is also an important source of federal support for basic and applied research. Engineering research makes up the largest part of the portfolio. NASA funds approximately a third of total federal support for engineering research, and is the second largest agency sponsor after the Department of Defense. NASA is the leading federal sponsor of the environmental sciences (oceanography, atmospheric sciences, geological sciences). The environmental sciences are about a quarter of NASA's portfolio, but NASA funds nearly 40 percent of total federal support for environmental sciences research. NASA also invests heavily in the physical sciences (astronomy, chemistry, and physics). Approximately two-thirds of NASA's physical sciences funding goes to astronomy, and most of the remaining third goes to physics. NASA is the second largest federal sponsor of physical sciences behind the Department of Energy, and is the leading sponsor of astronomy research.

Department of Energy (DOE)

For much of 1999, DOE has been the target of intense criticism over allegations of lax security and thefts of classified nuclear information at its three weapons laboratories. The labs (Los Alamos and Sandia in New Mexico, and Lawrence Livermore in California) are operated by contractors but are owned by DOE and report to DOE management. For most of the year, DOE Secretary Bill Richardson and other top agency officials were busy appearing repeatedly before Congress to respond to a growing chorus of demands to radically reorganize the labs' management and to correct persistent problems in keeping nuclear information secret. A report issued in the spring by an advisory board appointed by the President called for the creation of either a semi-autonomous agency within DOE to oversee the labs and other nuclear programs, or a separate agency to run DOE's nuclear weapons programs.

In response, after much discussion of possible options, Congress attached legislation to the FY 2000 defense authorization bill in August creating a new agency within DOE, the National Nuclear Security Administration (NNSA). NNSA is now responsible for ensuring the security and reliability of the nation's nuclear weapons stockpile and promoting nuclear safety in a manner consistent with environmental protection and national security. Although DOE Secretary Bill Richardson had previously opposed the creation of NNSA because a new agency could undermine his authority, in October he reluctantly gave his consent to the provisions in the defense bill, removing the last possible obstacle to President Clinton signing the bill into law on October 5.

The legislation creating NNSA declares that it is responsible for "nuclear weapons development, naval nuclear propulsion, defense nuclear nonproliferation, and fissile material disposition." The agency is headed by a presidentially-appointed and Senate-confirmed Under Secretary for Nuclear Security who also serves as Administrator for Nuclear Security in NNSA. All NNSA employees and NNSA contractors report only to this new Administrator and no one in the non-NNSA parts of DOE except the Secretary of Energy who retains ultimate control of NNSA and the rest of DOE. The DOE budget will be reorganized so that NNSA will have its own budget accounts within DOE. In practical terms, this means that all of DOE's defense R&D (in Atomic Energy Defense Activities in Table 7) with the possible exception of Environmental Management will become part of NNSA in the next budget.

Despite the creation of the NNSA, President Clinton and Secretary Richardson appear determined to forge their own path in interpreting the law, leading to a great deal of uncertainty over what the agency will look like in 2000. The President angered Congress in October by immediately appointing Secretary Richardson as the Under Secretary head of NNSA and giving high-level DOE officials dual appointments to similar jobs in NNSA, thwarting Congress's intention of creating two separate structures staffed by different people. Richardson later acquiesced to Congress and announced that he will appoint a separate Under Secretary.

Amid the confusion over the fate of DOE's weapons programs, Congress appropriated an increase for DOE's R&D activities, roughly half of which will be part of NNSA. Total DOE R&D in FY 2000 rises $258 million or 3.7 percent to $7.2 billion (see Table 7).

In the Science account, Congress provides $2.6 billion for R&D, a slight decline of 0.3 percent after adjusting for general reductions and the across-the-board cut. All but two accounts receive more than the original request. Physics and fusion research are high priorities within Science. Fusion Energy Sciences receives $246 million, an increase of 11.2 percent after several years of flat or declining budgets. This amount is well above the request of $223 million. Both High Energy Physics (up 0.5 percent to $692 million) and Nuclear Physics (up 3.9 percent to $347 million) receive increases. Computational and Technology Research (CTR), however, declines by 16.6 percent to $130 million, primarily because Congress denies funding for the proposed Scientific Simulation Initiative, DOE's proposed contribution to the Information Technology for the Twenty-First Century (IT²) initiative. Within the Basic Energy Sciences program, Congress reduces funding for the Spallation Neutron Source (SNS) to $117 million, down from a requested $214 million because of several critical internal and external reviews of the project's management. Most of the SNS funds are for construction of the facility in Tennessee.

DOE's investments in energy R&D are a mixed bag of large increases and steep cuts. In the Energy Supply account, spending on Solar and Renewable Energy R&D falls 7.3 percent to $275 million, $78 million less than the request. Nuclear Energy R&D, however, is favored with a 19.3 percent increase to $91 million because of congressional concern that nuclear energy has been neglected as a potential non-atmospheric-polluting energy source. DOE's R&D on Fossil Energy receives $330 million, an increase of 11.9 percent or $35 million over the FY 1999 funding level. This program funds R&D on more efficient coal, gas, and oil technologies. Energy Conservation R&D was set to decline in the original final Interior bill, but in the omnibus FY 2000 bill Congress added nearly $60 million to result in an R&D total of $440 million, an increase of 10 percent over FY 1999. This program aims to develop new technologies for conserving energy in buildings, transportation, and industry, and new ways of energy management.

DOE's defense R&D programs receive large increases, consistent with increases for total defense spending in Republican budget plans, despite the controversy over the weapons labs. Total DOE defense R&D is $3.4 billion, an increase of 4.8 percent over FY 1999.

The Stockpile Stewardship program, the cornerstone of DOE's effort to use science-based methods to ensure the safety and reliability of the nation's nuclear stockpile, receives $2.2 billion, $126 million or 5.9 percent more than FY 1999. The additional dollars fund an expansion of the Accelerated Strategic Computing Initiative (ASCI; $315 million, up 4.6 percent), a program to develop the next generation of teraflop computers (capable of several trillions of operations a second) in order to simulate nuclear explosions without nuclear testing. There is also an increase for Inertial Confinement Fusion ($227 million, up 3.4 percent), a different approach to fusion than the magnetic fusion research funded in the Science account. Construction funding for that program's major facility, the National Ignition Facility, declines from its peak funding of $284 million to $247 million, unaffected by recent news that the project is now behind schedule and over budget. The bill directs DOE to prepare a revised construction schedule and project budget by next June. The Stockpile Stewardship program funds most of the R&D at the three weapons labs at the heart of the DOE security controversy. The contract managers of the labs (the University of California for Los Alamos and Livermore, Lockheed Martin for Sandia) and all laboratory employees will report to NNSA.

The weapons labs, although they rely on the Stockpile Stewardship account to fund most of their R&D, also perform R&D funded through other nondefense accounts, and there is concern that this nondefense work could be negatively affected in NNSA because non-NNSA program managers in DOE who manage DOE nondefense R&D programs now have no direct authority over R&D activities or personnel in the labs. Because most of the reorganization provisions do not take full effect until March 2000, it is unclear at this time how nondefense R&D performed at the three labs will fit into the new organizational structure, and it is equally unclear whether NNSA will implement new restrictions on the flow of scientific personnel and information between the labs and other institutions.

National Science Foundation (NSF)

Congress provided NSF with just $24 million less than its request, for a total NSF budget in FY 2000 of $3.9 billion, an increase of $187 million or 5.0 percent over FY 1999. NSF's R&D funding, which excludes NSF's education and training activities and overhead costs, totals $2.9 billion in FY 2000, an increase of $140 million or 5.2 percent (see Table 10).

The Research and Related Activities (R&RA) account, which funds most of NSF's R&D, receives $3.0 billion, 5.2 percent or $146 million above the FY 1999 funding level but $49 million below the request. Although the R&RA appropriation is not distributed by directorate, this amount is enough to give each directorate an increase of at least 3 percent.

The FY 2000 NSF budget dramatically increases NSF's investments in information technology (IT) research. The President's Information Technology Advisory Committee (PITAC), which issued its final report in February 1999, recommended that the federal investment in information technologies R&D be increased by $1.37 billion over the next five years and that a strategic initiative be created to support fundamental computing research that will lead to breakthroughs and new capabilities to serve the growing demands on information technologies.

In response the Clinton Administration, in its budget request, had proposed a multi-agency Information Technology for the 21^st Century (IT²) initiative in fundamental computing and IT research with a $366 million budget for FY 2000, of which $146 million would have come from NSF. Of that amount, NSF requested $110 million for IT²research in the Computer and Information Science and Engineering (CISE) Directorate, funded within R&RA. In Congress the House Science Committee introduced a bill (HR 2086; the Networking and Information Technology Research and Development Act) to authorize a multi-year IT research initiative at higher levels following the PITAC recommendations. In the final budget, there is $90 million in new money for CISE, designated for "individual and team research projects related to information technologies, specifically in the areas recommended in the PITAC report and in H.R. 2086." Combined with ITfunds in the Major Equipment account (see below), NSF has $126 million out of its requested $146 million for new IT research activities in FY 2000. The CISE budget of $390 million is a 30.6 percent increase over FY 1999.

The remaining $36 million of NSF's proposed contribution to IT² comes from the Major Research Equipment account to fund Terascale Computing Systems, a facilities project to build a five-teraflop (trillions of computing operations a second) computing site. Congress granted the request and oriented these activities toward the goals of HR 2086 and the PITAC report. The Major Research Equipment account receives $95 million, up $10 million from the request and $5 million from FY 1999.

The Biological Sciences (BIO) Directorate within R&RA receives $415 million, $24 million or 6.1 percent more than FY 1999. The bill boosts funding for the third year of the Plant Genome Research Program from a requested $55 million to $60 million. NSF's new Integrative Activities account, which supports emerging cross-disciplinary research and major research instrumentation, receives $130 million, far less than the request and FY 1999 level of $161 million. Although the final bill provides the requested $50 million for the new Biocomplexity initiative and $50 million (the same as FY 1999 and the FY 2000 request) for Major Research Instrumentation, the bill does not provide any funding for the Opportunity Fund, a fund designed to support innovative, cross-disciplinary research taking advantage of emerging scientific opportunities. In FY 1999, the Fund received $24 million.

Education and Human Resources receives $694 million, $38 million more than FY 1999, including $55 million for the Experimental Program to Stimulate Competitive Research (EPSCoR; up from $48 million), a program to improve the research competitiveness of 18 states (and Puerto Rico) traditionally underrepresented as recipients of federal research funding. The final VA-HUD bill transfers the EPSCoR program and its funds to a new Office of Innovation Partnerships, and charges the new office with administering EPSCoR and also assisting non-EPSCoR institutions that receive relatively little federal research funding expand their research capacity and competitiveness. The new office receives $10 million in addition to the $55 million in EPSCoR funds.

NSF is the only federal agency with responsibility for research in all major science and engineering fields. Although growth in the NSF budget stagnated somewhat in the mid-1990s, in the last few years NSF has received significant funding increases and in FY 2000 has an R&D budget 14.4 percent above the FY 1994 budget in inflation-adjusted terms (see Table A, page 12). Most science and engineering disciplines have shared in this growth. For the past few years, NSF has increased support for its major supported disciplines at similar rates. The large increase for CISE in FY 2000, however, is likely to skew the FY 2000 results and show a far higher increase for mathematics and computer sciences research compared to other disciplines.

Other Agencies

The U.S. Department of Agriculture (USDA) funds agricultural research in universities and in its own laboratories, and forestry research through the Forest Service. In FY 2000, USDA's R&D totals $1.7 billion, an increase of $56 million or 3.4 percent from FY 1999 (see Table 12).

The primary reason the final USDA appropriation falls short of the requested 11.4 percent increase to $1.85 billion for USDA's R&D is that the bill blocks two mandatory (non-appropriated) grants programs from spending any money in FY 2000. The Initiative for Future Agriculture and Food Systems was created in June 1998 as a mandatory program to spend $120 million a year for five years on competitively awarded grants for agricultural research, to be administered by USDA's Cooperative State Research, Education and Extension Service (CSREES). Congress and the President, however, blocked USDA from spending the first installment of these funds in FY 1999. In the FY 2000 request, the President proposed to release the second year of these funds in FY 2000, but Congress once again blocks these grants. Similarly, the Fund for Rural America in the Office of the Secretary was reauthorized last June for five years, but FY 1999 spending was blocked by Congress and the President. The President proposed to release the FY 2000 funds, of which $15 million would go toward research topics, but Congress blocked them.

Competitively awarded grants hold their own in the appropriated programs of CSREES. The National Research Initiative (NRI) of competitive research grants receives $119 million, nearly the same amount as FY 1999 but far short of USDA's proposal to expand NRI to $200 million. Special Research Grants, mostly congressionally designated research projects to specific academic institutions, total $63 million, $8 million more than FY 1999 and $58 million more than the request. The bill specifies 142 separate grants, all but six of them to designated performers, in amounts as small as $42,000. Most formula funding programs for academic R&D such as the Hatch Act ($181 million, same as FY 1999) receive level funding. Total CSREES R&D is $479 million, an increase of $17 million or 3.7 percent over FY 1999.

Agricultural Research Service (ARS) R&D totals $903 million in FY 2000, an increase of $36 million or 4.2 percent. ARS funds intramural research through a nationwide network of intramural laboratories and agricultural experiment stations.

Other R&D funding agencies within USDA include the Economic Research Service (ERS), a leading supporter of research in economics, particularly agricultural economics. ERS receives $65 million in FY 2000, an increase of $2 million. The Forest Service supports ecosystems and forestry research, and receives $214 million for its R&D in FY 2000, an increase of 1.3 percent.

The Department of Commerce receives $1.1 billion for its R&D in FY 2000, $21 million or 2.0 percent more than FY 1999 (see Table 11).

Congress and President Clinton are still engaged in a battle over how the 2000 Census will be conducted by the Bureau of the Census in Commerce, but the two sides fought themselves to a draw in 1999. The Administration favors the use of statistical sampling to augment the traditional counting method in enumerating the U.S. population, but congressional Republicans oppose this technique. Although the two sides were expected to engage in a major showdown in 1999, they postponed the real battles until after the 2000 Census is conducted. At the beginning of 1999, the Census Bureau had assumed that statistical sampling could be used to fill in some missing data gaps from unreturned census questionnaires and to produce a more accurate population count, but the Supreme Court ruled in January that statistical sampling could not be used to produce population figures for congressional apportionment. The Census Bureau pressed ahead with its plans to use statistical sampling, and asked for and received a total of $4.8 billion in FY 2000. The appropriation, significantly above the $3.1 billion requested in February when the Bureau assumed it could use statistical sampling for all purposes, should allow the Bureau to perform a more comprehensive (and costly) actual enumeration for congressional apportionment purposes, while still leaving itself the option of using statistical sampling to produce population figures for non-apportionment purposes. If the Bureau produces two sets of figures in 2000, however, legal battles are almost certain to erupt.

The final Commerce budget provides modest increases for Commerce's R&D programs. The National Institute of Standards and Technology (NIST) receives $473 million for its R&D activities in FY 2000, a modest $5 million or 1.0 percent above FY 1999. While the NIST intramural laboratory research programs grow modestly by 0.7 percent to $235 million, the Advanced Technology Program (ATP) receives $130 million for R&D activities, a cut of $48 million or 27.0 percent. ATP is NIST's extramural research grants program to provide precompetitive cost-shared R&D support for promising market technologies. The House would have eliminated the program, while the Senate would have cut it slightly from the FY 1999 funding level. The large cut to ATP is balanced by a large increase for NIST's Construction of Research Facilities account. Its $108 million appropriation is nearly double the FY 1999 level. Most of this appropriation will fund the start of construction of a new Advanced Measurement Laboratory (AML) at NIST headquarters in Maryland, although $12 million of this normally intramural account is congressionally designated for three extramural projects.

The National Oceanic and Atmospheric Administration (NOAA) has an R&D budget of $617 million in FY 2000, an increase of $17 million or 2.8 percent over both FY 1999 and the FY 2000 request. The final bill cuts many NOAA R&D programs, but awards an increase to the Oceanic and Atmospheric Research (OAR) account, from $287 million in FY 1999 to $299 million in FY 2000. The bill boosts climate and air quality research from $122 million to $129 million.

The FY 2000 increase, even with the expected inflation rate, keeps Commerce R&D at a stable funding level. Mostly because of strong Clinton Administration support for NIST programs, and secondarily because of bipartisan support for NOAA's R&D programs in the early 1990s, Commerce R&D in FY 2000 is more than double the funding level of a decade ago (in inflation-adjusted terms). Commerce is now one of seven agencies to fund more than $1 billion in R&D annually.

The Department of the Interior has an R&D budget of $562 million in FY 2000, a cut of $5 million or 0.9 percent from FY 1999 (see Table 14).

The U.S. Geological Survey (USGS) is the primary sponsor of R&D in Interior. Its total FY 2000 appropriation is $821 million, $18 million less than the request but $23 million or 2.9 percent above FY 1999. Nearly two-thirds of the USGS budget is for R&D activities, for a total of $496 million (down 0.2 percent). Although Interior proposed a major budget restructuring in the FY 2000 request, including the creation of an Integrated Science account for multi-disciplinary projects and integrated ecosystem studies, the final Interior bill funds USGS under the old account structure and allows these studies and projects to be funded through the old accounts. The Interior bill permits two other proposed accounts, Science Support and Facilities, to be created. Because of the transitions between the old account structure, the proposed new account structure, and the new approved account structure, the 0.2 percent estimated cut in USGS R&D may actually turn out to be a slight increase, depending on how USGS allocates its costs based on the appropriation.

USGS is one of the leading federal sponsors of earth sciences research, along with the Department of Energy, the National Science Foundation, and the National Aeronautics and Space Administration. Within the earth sciences, USGS is particularly important in geological hazards research, including research on earthquakes and volcanoes. The earth sciences program in USGS receives a 6.4 percent increase over the comparable amount in FY 1999. USGS is also a leading sponsor of water resources research, which receives a 2.7 percent increase, and biological research, which increases to $137 million. Most of this research is conducted within Interior labs to address the science needs of Interior's other agencies, such as the Fish and Wildlife Service and the Bureau of Land Management.

Congress approved $645 million in FY 1999 for the R&D activities of the Environmental Protection Agency (EPA), $23 million or 3.5 percent less than last year, the same amount as the request (see Table 15). Congress approved a total EPA budget of $7.6 billion, slightly less than FY 1999.

Among EPA's R&D programs, most of which are in the Science and Technology account, most are funded at the requested levels. To make room for $54 million for 38 congressionally designated projects in the S&T account, however, Congress trimmed $23 million from the request for R&D in the Climate Change Technology Initiative (CCTI) and $28 million from other projects and from a general reduction. CCTI is a multi-agency initiative to address global warming through partnerships with locally based organizations, research on energy efficient technologies, and tax incentives for energy efficiency. Global change research receives $17 million, the same level as FY 1999.

In the overall EPA budget, the final bill adds $615 million to the requested amount for State and Tribal Assistance Grants, bringing the total to $3.5 billion, 1.4 percent more than the FY 1999 level. Most of this money goes to state and local governments. For Environmental Programs and Management, which funds most of EPA's operating expenses, the bill provides $1.9 billion, 2.4 percent more than FY 1999 but $154 million less than EPA had requested. Within the account, the bill reduces the request for CCTI programs by $90 million. Between this account and the S&T account, CCTI funding totals $103 million, less than half the request of $216 million and down from the FY 1999 level of $110 million. The Superfund program is cut $103 million below the FY 1999 funding level, for a total of $1.4 billion. Superfund also supports R&D on hazardous substances managed by EPA's Office of Research and Development through a $38 million transfer to the Science and Technology account. Within the Superfund account, EPA will transfer approximately $37 million to the National Institute of Environmental Health Sciences (NIEHS) for its research activities related to hazardous substances.

The final EPA budget bill contains a legislative provision, carried over from last year's EPA funding bill, that prohibits EPA from implementing actions called for under the U.N. Kyoto Protocol, which has not been submitted to nor ratified by the Senate.

Nearly half of EPA's R&D is performed in the agency's own laboratories, while about a third is performed in the nation's colleges and universities, a share that has been growing in recent years. The remainder is performed by industrial firms and nonprofit institutions.

The Department of Transportation (DOT) has an R&D budget of $643 million in FY 2000, an increase of $40 million or 6.7 percent (see Table 13). This substantial increase for transportation-related R&D exceeds growth in DOT's total budget (including spending from the various transportation trust funds), which increases by $2.1 billion to $50.1 billion in FY 1999, an increase of 4.4 percent.

Although Congress faced the politically unpleasant task of making deep cuts to total discretionary spending in order to stay under budget caps this year, much of DOT's budget is exempt from the caps because of two new categories of discretionary spending created in last year's Transportation Equity Act for the 21^st Century (TEA-21). TEA-21, a six-year reauthorization bill for most highway and transit programs, dedicates all highway and transit trust fund receipts for transportation and creates two new categories of discretionary spending (highways and transit programs) for that purpose. Spending in these two categories is determined by receipts from transportation taxes and not by legislative limits.

Because transportation revenues have been rising and all these revenues are required to be spent on transportation, R&D funding increases in the primary beneficiary of TEA-21 spending, the Federal Highway Administration (FHWA). FHWA's R&D programs receive $287 million, a gain of $29 million or 11.3 percent over FY 1999, mostly because of the guaranteed funding in TEA-21. The Administration's request was for $459 million, nearly double the FY 1999 level. In the budget request, DOT had proposed to reallocate a portion of unexpected additional revenues from the highway trust fund toward uses not specified in TEA-21, including a significant diversion of funds to R&D. Congress rejected this proposal, and distributed all the additional revenue to the states according to the TEA-21 distribution formula. The FHWA total includes $47 million for R&D in the Intelligent Transportation Systems (ITS) program, down from the $97 million request but up from last year.

The Federal Aviation Administration (FAA) receives $245 million for R&D activities, an increase of 8.5 percent. The increase for R&D is due to a new $16 million appropriation for the Safety Flight 2000 project, a project to develop new traffic-control and aircraft navigation technologies to improve the efficiency of commercial aviation. There are also increases for many other FAA R&D projects, including research on aircraft safety technologies and aging aircraft.

The majority of DOT's R&D is performed by intramural laboratories and industrial performers. Universities and colleges perform about a tenth of DOT's R&D, and a similar proportion is performed by state and local governments.

Although DOT wins an increase in FY 2000, its support of R&D is still well below the levels of the early 1990s in inflation-adjusted terms. DOT's R&D peaked in FY 1995 and then suffered a steep decline, particularly in the FAA, as a result of efforts to reduce federal spending. The FY 2000 funding level is 9.8 percent below the FY 1994 funding level in inflation-adjusted terms.