This report is a summary of AAAS estimates and
analyses of appropriations in the FY 2004 omnibus bill and final FY 2004
appropriations bills for federal R&D. This report is a preview of
the forthcoming publication Congressional Action
on Research and Development in the FY 2004 Budget (see the last
page).
In late January, Congress
finally approved a fiscal year (FY) 2004 omnibus appropriations bill that
completes the FY 2004 federal budget process, and provides a record-setting
$127 billion federal research and development (R&D) investment in FY 2004,
a nearly $10 billion increase. But 93 percent of the increase goes to just
three agencies: the Department of Defense (DOD), the Department of Homeland
Security (DHS), and the National Institutes of Health (NIH). The other
R&D funding agencies collectively see only modest increases in their
R&D portfolios, with increases for some agencies offset by flat funding or
cuts in others. President Bush is expected to sign the bill into law by the end
of the month, just days before the FY 2005 budget process begins.
In late November,
President Bush and the 108th Congress reached agreement on
the final outline of FY 2004 appropriations. The FY 2004 omnibus appropriations
bill (HR 2673) bundles together the 7 unfinished appropriations bills
(to add to the 6 appropriations bills already signed into law). The
House gave final approval on December 8, but procedural disputes in
the Senate delayed final Senate approval until January 22. The 1185-page omnibus bill
throws together nearly $328 billion in federal discretionary spending
for FY 2004 and is filled with budgetary maneuvers to fit under congressional
budget targets, including a 0.59 percent across-the-board cut for all
non-DOD appropriations, even for agencies whose budgets were signed
into law in 2003. Although the President and Congress agreed to record
increases for defense and international discretionary spending related
to U.S.
activities in Iraq
and Afghanistan,
they also agreed to restrain domestic spending. So even as the FY 2004
budget contains record-breaking investments in defense and homeland
security R&D, there are only modest increases for nondefense R&D
programs, with increases in some R&D funding agencies offset by
flat funding or cuts in others.
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 2004 edition will be published online on January 27; because
of the late completion of the FY 2004 budget, there will be no printed
edition. The full text will be available on line on the AAAS R&D
Web site (www.aaas.org/spp/rd). Detailed information
on the largest R&D funding agencies, historical tables, and other
supplemental materials are now available on the AAAS
R&D Web site.
Highlights of Federal R&D in FY 2004: DOD, DHS, and NIH Get the Largest
Increases
The just-approved omnibus bill provides funding for 8 of the 12 largest
R&D funding agencies, but also affects the other four agencies whose
budgets have already been signed into law. The omnibus bill contains
across-the-board cuts for all agencies other than DOD, even for agencies
such as the Department of Energy (DOE) with enacted FY 2004 budgets,
and also adds extra funds for DOD, DOE, and other agencies covered by
other appropriations bills. (All figures are adjusted to reflect an
across-the-board cut of 0.59 percent for all agencies other than DOD,
and additional across-the-board cuts for selected agencies. The figures
are also adjusted for rescissions and supplementals in the omnibus bill
and the FY 2004 war supplemental.)
- The federal investment in research and development (R&D) hits a new record
of $127.0 billion in FY 2004, a $9.5 billion or 8.1 percent increase
over FY 2004 (see Table 1 and Figure 1).
Congress provided $4.6 billion more than the Bush Administration request.
Figure 1. (click on the image to view
or download a full-page version of this chart)
- The Department of Defense
(DOD), the Department of Homeland Security (DHS), and the National Institutes
of Health (NIH) get 93 percent of the $9.5 billion increase, leaving all other
R&D funding agencies collectively with only a modest increase in funding. 80
percent of the increase goes just to DOD’s R&D, which hits another all-time
high of $66.3 billion, a boost of 13.0 percent or $7.6 billion. DOD weapons
systems development accounts for nearly all of the increase (up $6.3 billion to
$53.7 billion), but Congress also rewarded DOD’s “S&T” activities with a
12.0 percent increase to $12.6 billion. The new DHS sees its R&D portfolio
surge by 56.0 percent or $375 million to $1.0 billion.
- After five years of annual 15 percent increases, NIH budget growth slows
down considerably in FY 2004. Most
NIH institutes receive increases of about 3 percent. After adjusting
for an across-the-board cut, the NIH R&D portfolio increases by
3.2 percent, a modest increase in percentage terms (see Figure 2). The
omnibus bill adds $847 million to NIH R&D for a total of $27.1 billion.
Figure 2. (click on the image to view
or download a full-page version of this chart)
- NIH and homeland security R&D are the primary growth areas in nondefense
R&D, leaving all other domestic R&D priorities with flat funding
overall. Nondefense R&D increases $1.6 billion or 2.9 percent
to $56.0 billion (see Figure 1), but taking out the NIH increase leaves
a smaller $750 million or 2.7 percent increase to $28.9 billion (see
Table 1). Nearly all of that increase goes
to nondefense R&D in DHS, and even at NIH much of the increase goes
to biodefense research related to homeland security.
- The National Science Foundation (NSF) enjoys a budget increase, but falls
well short of a five-year doubling plan signed into law last December.
Congress provided $4.1 billion for NSF’s R&D activities (excluding
education, training, and overhead programs), an increase of 4.7 percent
(see Table 1 and Figure 2). The NSF research
directorates receive increases between 3 and 7 percent. The total NSF
budget of $5.6 billion is $1 billion short of the $6.6 billion authorized
for FY 2004 by an NSF authorization bill signed into law last December
that would put the NSF budget on track to double between FY 2002 and
FY 2007.
- The remaining agencies in the federal R&D portfolio receive some modest
increases offset by cuts or flat funding in other areas (see Figure
2). The Department of Energy’s (DOE) Office of Science received
a modest boost to $3.2 billion for its R&D programs, an increase
of 3.8 percent. R&D in the U.S. Geological Survey (USGS) fails to
keep pace with inflation with a 1.7 percent increase to $579 million,
although Congress reversed the Administration’s proposed cuts. Congress
rejected the Administration’s proposal to eliminate the Advanced Technology
Program, but R&D in the National Institute of Standards and Technology
(NIST) in Commerce still declines 3.9 percent. There are cuts in the
R&D portfolios of other agencies: R&D in the U.S. Department
of Agriculture (USDA, down 4.9 percent), the Department of Transportation
(DOT, down 8.2 percent), and NASA (down 0.4 percent) all fall in the
FY 2004 omnibus bill.
-
The federal basic and applied research portfolio increases 5.7 percent
in FY 2004. The federal research portfolio (basic and applied research,
including defense research) totals $56.0 billion in FY 2004 (see Table
2). Many agencies’ research portfolios fare better than their overall
R&D portfolios because R&D facilities funding falls sharply
in agencies such as USDA, DOE, and NIH, allowing for larger increases
in research. NIH’s research portfolio increases 7.0 percent or $1.7
billion to $26.9 billion, as one-time grants for biodefense research
facilities construction in FY 2003 are replaced by biodefense research
grants in FY 2004; similarly, DOE research funding jumps 8.7 percent
to $5.6 billion as facilities construction costs for the Spallation
Neutron Source and the National Ignition Facility fall in FY 2004, allowing
for research increases. NIH supports 48 percent of all federal research
in FY 2004, a ratio that has been steadily increasing for decades.
- The current focus on defense and homeland security results in large increases
for defense and general science R&D, and modest increases or cuts
for most of the other national missions (see Table
3). Defense R&D (including DOD, the Department of Energy’s defense
activities, and a large part of the DHS R&D portfolio) rises $7.9
billion or 12.5 percent to $70.9 billion for a record total driven by
substantial boosts to defense-related development activities in DOD
and DHS. After several years of near-parity between defense and nondefense
R&D around the turn of the century, defense R&D pulls ahead
to 55.9 percent of total federal R&D. Because of the tremendous
growth in defense and health R&D over the past few years, R&D
for all other national missions has steadily shrunk to less than a quarter
of the federal R&D portfolio and totals just 21 percent in FY 2004.
- R&D earmarks total $1.9 billion in FY 2004, up sharply from last
year, according to the AAAS analysis of congressionally designated,
performer-specific R&D projects in the FY 2004 appropriations bills.
Although these projects amount to only 1.5 percent of total R&D,
they are concentrated in a few key agencies and programs. Four agencies
(USDA, $220 million; NASA, $194 million; DOE, $284 million; and DOD,
$825 million) receive 80 percent of the total R&D earmarks, while
NIH and NSF remain earmark-free. FY 2004 earmarks are up 32 percent
from the $1.4 billion in FY 2003. (For full details see the AAAS
R&D Funding Update on R&D Earmarks in the FY 2004 Budget,
available on the FY 2004 R&D page of the AAAS R&D web site).
R&D Appropriations for Key Agencies
Full information
on final FY 2004 funding levels and program details for individual agencies
are now available in newly revised AAAS R&D Funding Updates on the
AAAS R&D Web site. (The on-line version
of this document features links to the updates; see also the agency
chapters in Congressional
Action on R&D in the FY 2004 Budget.)
- After a completed five-year doubling campaign involving 15 percent increases
for each of the past five years, growth in the National Institutes of Health (NIH)
budget slows sharply in FY 2004, leaving nearly all the NIH institutes
with increases of about 3 percent. Congress added to the Administration’s
request slightly for a total NIH budget (including non-R&D items
and after adjusting for an across-the-board cut) of $28.0 billion, just
3.2 percent above last year. Biodefense research continues to be a high
priority in FY 2004. The FY 2004 omnibus bill provides $4.3 billion
for the National Institute of Allergy and Infectious Diseases (NIAID),
the lead NIH institute for biodefense research, a boost of 16.3 percent
over FY 2003 after a 47 percent boost last year. NIH research (basic
and applied) increases 7.0 percent to $26.9 billion, greater than the
increases for the overall NIH budget because Congress went along with
NIH’s plan to discontinue most of its FY 2003 facilities funding and
shift the money to biodefense research in FY 2004 (see Table
2).
- The Department of Defense (DOD) has already received
a record-breaking $66.3 billion for its R&D programs in FY 2004,
a jump of 13.0 percent or $7.6 billion over FY 2003 (see Table
1). Funding for missile
defense development jumps 19 percent to $8.2 billion in FY 2004, mostly
in the Missile Defense Agency; funding for other big development projects
also climbs, particularly a $4.3 billion appropriation for the Joint
Strike Fighter (up 27 percent). DOD’s
support of basic research declines in FY 2004, while applied research
increases modestly. Basic research (“6.1”) declines $13 million
(0.9 percent) to $1.4 billion, while applied research (“6.2”) increases
3.6 percent to $4.4 billion, in contrast to requested cuts of 8 percent
and 14 percent, respectively. DOD “Science and Technology” (S&T)
programs, which include research, medical research, and early technology
development, receive a record $12.6 billion in FY 2004, an increase
of 12.0 percent, primarily
because of large increases for technology development (“6.3”) programs.
Congress agreed to DOD’s proposal to reorganize its basic research portfolio
in FY 2004 by transferring many basic research programs
funded in the Office of the Secretary of Defense (OSD) to the three
services.
- The Department of Homeland Security (DHS) becomes
one of the major funding sources of R&D in FY 2004. The DHS R&D
portfolio totals $1.04 billion in FY 2004, up 56 percent from FY 2003
(after adjusting for an across-the-board cut; see Table
1). Congress decided to fund the non-R&D Project Bioshield to
procure biodefense countermeasures, a program first proposed in the
President’s 2003 State of the Union address. The final DHS budget contains
$5.6 billion over 10 years for biodefense countermeasures, of which
$890 million is available in FY 2004, and which should provide incentives
for private-sector R&D investments. The new S&T Directorate
in the DHS has $869 million for R&D activities, 67 percent more
than the current funding level, including $70 million for university
programs and $60 million for R&D on antimissile devices for commercial
aircraft.
- Congress provides $5.6 billion for the budget of the National
Science Foundation (NSF) in FY 2004, $268 million or 5.0 percent
more than FY 2003. NSF’s R&D activities receive $4.1 billion,
an increase of 4.7 percent. The research directorates receive increases
between 3 and 7 percent. The final appropriation falls nearly $1 billion
short of the authorized funding level contained in the NSF authorization
bill signed into law last December, which envisions a possible doubling
of the NSF budget between FY 2002 and FY 2007.
- The Department of Energy (DOE) already has an
R&D budget of $8.7 billion in FY 2004, an increase of $506 million
or 6.1 percent, although the omnibus bill applies across-the-board
cuts to its already-enacted budget. DOE’s Office of Science receives
$3.2 billion for R&D after the across-the-board cut, a boost of
3.8 percent or $116 million in contrast to a requested cut. Congress
added funds for high-performance computing research, domestic fusion
research, and for more than 90 congressionally designated projects.
Congress trimmed slightly the request for DOE’s defense R&D activities,
but still provided a $257 million or 6.7 percent increase for a total
of $4.1 billion, including research funds for a new generation of ‘bunker
buster’ nuclear weapons. On the energy side, the increases are larger
for an energy R&D total of $1.4 billion, up 10.4 percent. The final
DOE budget boosts funding for R&D on hydrogen, nuclear energy, and
coal, but cuts spending on other renewable energy areas and on other
fossil fuels. The additions and cuts mirror the priorities outlined
in the stalled FY 2004 energy policy bill, which fell just short of
final Senate approval in late November. (The AAAS
analysis of the R&D implications of the energy policy bill is
available on the AAAS R&D web site.)
- NASA will be preoccupied in FY 2004 with getting
the Space Shuttle and International Space Station programs back on track
after the Columbia shuttle disaster. Congress provides $15.4
billion for the NASA budget in FY 2004, even with FY 2003. NASA’s R&D
funding declines 0.4 percent to $11.0 billion, primarily because construction
funding for the R&D laboratory known as the International Space
Station falls 19 percent to $1.5 billion while the project awaits the
return to flight of the Space Shuttle. There will be increased attention
to future launch alternatives to the Space Shuttle such as the Orbital
Space Plane. NASA’s non-human space flight R&D programs in Science,
Aeronautics and Exploration (SAE) receive 5.9 percent more in FY 2004
for a total of $7.9 billion, including a 12 percent boost for Space
Science programs to $4.0 billion and a 6 percent boost to Biological
and Physical Research to $990 million.
- The Department of Commerce avoided steep proposed
cuts to its R&D programs. Although the Bush Administration and
the House proposed to eliminate the Advanced Technology Program in the
National Institute of Standards and Technology (NIST), the FY 2004 omnibus
bill sides with the Senate in keeping the program alive at last year’s
funding level. NIST’s intramural R&D programs, however, decline
5.7 percent to $291 million despite a requested increase. And Congress
essentially agreed to the Administration’s proposal to phase out the
federal role in the non-R&D Manufacturing Extension Partnership
(MEP), slashing funding by 63 percent down to $39 million. Total NIST
R&D falls 3.9 percent to $506 million. For the National Oceanic
and Atmospheric Administration’s (NOAA) R&D programs in ocean research,
fisheries research, atmospheric science, and climate change science,
Senate proposals for increases prevailed against House and Administration
proposals for steep cuts. Total NOAA R&D rises 5.8 percent to $724
million. NOAA’s core R&D programs in Oceanic and Atmospheric Research
gain 6.1 percent for a total of $361million.
- The U.S. Department of Agriculture’s (USDA) R&D falls 4.9 percent or $111 million in the FY 2004 omnibus bill
to $2.2 billion in FY 2004, primarily because of steep cuts to research
facilities funding. The FY 2003 USDA budget included one-time emergency
funds for construction and security upgrades at USDA laboratory facilities
related to biodefense concerns. Without the facilities funds, USDA R&D
actually increases slightly by 1.8 percent. Although USDA requested
$200 million for the National Research Initiative of competitively awarded
extramural research grants, Congress provides only $164 million, $36
million less than the request and $2 million less than FY 2003. Congress
instead provides $111 million for the congressionally earmarked Special
Research Grants, as well as $131 million in other intramural and extramural
earmarked research grants.
- The Environmental Protection Agency (EPA) budget
in FY 2004 rises slightly, as does its R&D funding. The total
EPA budget is $8.4 billion in the omnibus bill, $287 million more (3.5
percent) than FY 2003. EPA’s R&D funding rises 1.6 percent to $634
million, primarily because one-time emergency funding for building decontamination
research in FY 2003 is replaced by $56 million in earmarked R&D
projects. Most of EPA’s core R&D programs receive increased funding
compared to FY 2003.
- In an
already-enacted spending bill,
the U.S. Geological Survey (USGS), Interior’s
lead science agency, received $579 million for its R&D programs,
$10 million or 1.7 percent above the FY 2003 funding level (after adjusting
for an across-the-board cut in the omnibus bill). Congress reversed the Bush Administration’s proposed cuts to many
of USGS’ earth science and water resources research programs. Total Interior R&D climbs $49 million or
7.9 percent to $676 million because of a requested boost to the Bureau
of Land Management’s R&D activities.
- Congress slashes R&D in the Department of Transportation
(DOT) by $58 million or 8.2 percent to $644 million in FY 2004.
The cuts hit both of DOT’s major R&D agencies, the Federal Aviation
Administration (FAA) and the Federal Highway Administration (FHWA),
both of which are primarily funded through trust funds whose receipts
from transportation taxes have recently declined.
- The Department of Veterans Affairs (VA) has an R&D portfolio of $820
million in FY 2004, an increase of 2.5 percent. VA’s research is performed
inside its network of VA hospitals and clinics by VA personnel, and
focuses on health issues with impacts on the nation’s veterans.
The FY 2004 R&D Budget
in Historical Context
The FY 2004 budget process leaves
key R&D programs with flat budgets for the better part of the past decade.
As shown in Figure 3 and Figure 4 show, both the defense and nondefense R&D
investments are at record highs in FY 2004, but these totals disguise flat or
declining funding for many areas.
For defense R&D,
Figure 3 shows that nearly all of the increases in the past few years
to defense R&D have been in weapons systems development, “6.4” or
higher in the DOD classification system. DOD’s S&T investments (“6.1”
through “6.3”), comprising basic and applied research and technology
development, are still well below the funding levels of the late 1980s
and have received relatively modest increases compared to weapons development.
The S&T accounts fund all of DOD’s investments in research, including
key federal contributions to the support of the physical sciences, engineering,
and other research fields.
Figure 3. (click on the image to view
or download a full-page version of this chart)
Figure 4. (click on the image to view
or download a full-page version of this chart)
In nondefense R&D,
record-setting funding levels are primarily a legacy of the recently completed
campaign to double the NIH budget between 1998 and 2003, as shown in Figure 4.
All the other nondefense R&D funding agencies collectively have seen their
budgets remain flat for more than a decade, even as the U.S.
economy, the federal budget, and the U.S.
population have all boomed during that time. Recent increases in nondefense
R&D have served only to recover the lost ground of the mid-1990s when
discretionary spending declined in the push to balance the federal budget.
These non-NIH agencies, combined with DOD’s research investments, fund nearly
all of the federal investment in the non-biomedical sciences, including the
physical sciences, non-medical life sciences, environmental sciences,
engineering, mathematics, computer sciences, and social sciences. Because of
stagnant funding for DOD research and non-NIH nondefense R&D, federal
support for these disciplines has remained stagnant for more than a decade, and
the FY 2004 budget does little to change the trend.
Next Steps and Publication Information
The House of Representatives
gave final approval to the FY 2004 omnibus bill on December 8, thereby
concluding its business for the year. The Senate left for the year the
next day without voting on the omnibus, and finally approved the omnibus
bill on January 22. President Bush is expected to sign the bill into
law and thereby conclude the FY 2004 budget process by the end of January.
The AAAS
publication Congressional Action
on Research and Development in the FY 2004 Budget
will be available on January 27. The full report will be available
online only and will not be available this year in a printed edition.
The full report will offer 16 detailed funding tables, several charts,
a chronology of the events in the FY 2004 budget process, an analysis
of funding trends, and analyses of the impacts of the FY 2004 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 already available on the AAAS R&D Web site in the “FY
2004 R&D” section.
- December 8, 2003 (revised Jan. 23)
