Highlights
- The Department of Defense (DOD) has a record-breaking R&D portfolio
of $66.3 billion in FY 2004, a jump of 13.0 percent or $7.6 billion
over FY 2003 (see Table A).
-
The big winners in DOD
are the missile defense program and other development programs.
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 only 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 (see Table A).
- 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, but
primarily because of large increases for technology development
(“6.3”) programs. By contrast, the Administration had proposed a nearly
$1 billion cut (see Table C).
- 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 (Army, Navy, and Air Force; see
Table C).
On September 30,
President Bush signed into law the FY 2004 Defense appropriations bill
(HR 2658) providing nearly the entire budget for the Department of Defense
(DOD). Although the overall Defense bill trims $3 billion from the request
for a total of $369 billion, Congress boosted DOD’s R&D programs
well above the request and agreed to provide a record-breaking amount
for DOD R&D. Including DOD activities funded by other appropriations
bills, the total DOD budget in FY 2004 exceeds $445 billion after factoring
in a November 6 FY 2004 emergency supplemental bill providing DOD with
funds for continuing military activities in Iraq, which also contained
some R&D funds. And the FY 2004 omnibus bill currently before Congress
also contains some provisions that would affect the FY 2004 DOD R&D
budget. (All figures in this analysis have been revised to reflect the
FY 2004 emergency supplemental bill and the FY 2004 omnibus bill).
In the
final Defense bill, total research and development (R&D) at
DOD climbs to $66.3 billion in FY 2004 – an increase of 13.0 percent
or $7.6 billion from the FY 2003 level. The FY 2004 appropriation
brings DOD R&D to an all-time high in inflation-adjusted dollars
(see Table A and Figure 1). 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. Because of defense
cutbacks following the end of the Cold War, DOD’s support for R&D
declined by a third following a peak in FY 1987 but has increased dramatically
in the past few years to surpass Cold War highs (see Figure 1). The
Bush Administration has made increasing DOD spending in general and
DOD weapons development spending in particular a high priority, especially
in the aftermath of September 11. Both the House and the Senate added
to the already record-setting Administration request for DOD R&D,
and the final appropriation exceeds both earlier versions (see the July
11 AAAS R&D Funding Update for details of House appropriations
for DOD; see the July 11 AAAS R&D Funding Update
for details of Senate appropriations for DOD. For more on the FY 2004
DOD request and historical trends in DOD R&D, see Chapter
6 of AAAS
Report XXVIII: R&D FY 2004.)
Figure 1. (click
on the image to view or download a full-page color PDF version of the
chart)
Nearly
all ($6.3 billion) of the enormous $7.6 billion DOD R&D increase
will go to weapons development activities (“6.4” through “6.7” plus
other appropriations; see Figure 1). Advanced Component Development (“6.4”), Systems
Development and Demonstration (“6.5”), and Operational Systems Development
(“6.7”) all increase by more than $1 billion each. These categories
cover advanced development work, mostly performed by industrial firms
as defense contractors, on specific weapons systems. Most of the “6.5”
increase comes from the $4.3 billion appropriation (up from $3.4 billion
in FY 2003), divided between the Navy and Air Force, for the Joint Strike
Fighter (JSF), a next-generation fighter in development for future use
by all the services and U.S. allies.
DOD S&T Programs
DOD Basic research funding (the “6.1” category) actually falls in FY 2004
amid record-breaking R&D increases, by $13 million or 0.9 percent
to $1.4 billion. The Defense bill appears to provide a slight increase
to “6.1” funding, but “6.1” funding actually declines after general
reductions of roughly 1 percent affecting all R&D programs are factored
in. Table C shows apparent substantial
increases for basic research in the Army, Navy, and Air Force, but these
increases reflect major shifts in funding. DOD proposed to move funding for the University
Research Initiatives program, which funds competitively awarded
basic research grants to university performers, from OSD to the three
services. Congress agreed
to these proposed transfers. Overall, funding for University Research
Initiatives rises 22 percent to $286 million, with much of the increase
going to congressionally designated, performer-specific projects (earmarks).
Funding for the Defense Research Sciences program, however, which funds
basic research in DOD laboratories and universities, falls 6 percent
to $893 million across the three services and DARPA in FY 2004, though
this is an improvement over the requested 11 percent cut.
Applied Research (“6.2”) receives a small boost in the final Defense bill,
though smaller than the increases for development. Applied Research
funding rises by 3.6 percent to $4.4 billion, in contrast to a requested
cut (see Table A; Table
C provides details of “6.1” and “6.2” funding by the military services
and agencies). The “6.1” and “6.2” research accounts provide a significant
share of federal support for several key
science and engineering disciplines (see Figure 2). DOD provides
more than 40 percent of all federal support for engineering research
and a majority of federal support for some key engineering subfields.
DOD also provides more than a third of total federal support for computer
sciences research and plays a prominent funding role in other disciplines
such as mathematics and oceanography. The “6.1” and “6.2” accounts are
also important for the nation’s colleges and universities, which perform
more than half of the “6.1” research and roughly 20 percent of “6.2”
research.
Figure 2. (click
on the image to view or download a full-page color PDF version of the
chart)
The “6.1,” “6.2,” and “6.3”
categories are often grouped together as “Science
and Technology” (S&T). This category includes basic research,
applied research, and advanced technology development. These programs
contribute to a broad knowledge base with potential applications to
a wide variety of military as well as civilian uses. AAAS estimates
of DOD “S&T” (see Table C) also include
applied medical research in the Defense Health Program, which was formerly
funded in the Army “6.2” accounts.
DOD funding of “S&T” (the “6.1” through “6.3” categories plus
medical research) climbs $1.3
billion or 12.0 percent to a record $12.6 billion in FY 2004, a sharp
reversal from a proposed cut of nearly $1 billion in the Administration’s
request (see Table C). In the past
few years, there has been growing support inside and outside the Pentagon
for setting 3 percent of the regular DOD budget as a goal for the proper
level of S&T investment, and the last two DOD budgets have met that
goal. The final Defense bill raises the S&T/budget ratio to 3.3
percent in FY 2004, in contrast to the request which would have lowered
it to 2.7 percent. The final increase is heavily concentrated in the
“6.3” programs, which collectively increase by 23.3 percent to $6.2
billion, including a 55 percent boost to Air Force investments in technology
projects. As Figure 3 shows, DOD “S&T” is performed by a mix of
performers, with industrial firms performing the majority of the “6.3”
development work, DOD labs performing a broad spectrum of R&D, and
universities and colleges specializing in basic and applied research.
Figure 1. (click
on the image to view or download a full-page color PDF version of the
chart)
The FY 2004 Defense bill contains
a separate $486 million appropriation, outside
the regular R&D accounts, for medical
research (see Table C), up 6.0 percent
from last year’s funding level. Included in this total is $150 million
for breast cancer research and $85 million for prostate cancer research
(same as the FY 2003 funding levels) to be awarded through peer-reviewed
competitive grants. The bill also contains $10 million for ovarian cancer
research, $10 million for diabetes research, and $14 million for reproductive
research. There is also $50 million for peer-reviewed research on other
medical topics. These programs were congressionally initiated in the
early 1990s and DOD has never requested funding for them, but Congress
has annually provided funding; the Army manages these programs. The
final Defense bill also contains numerous congressionally designated,
performer-specific appropriations for medical research in DOD’s regular
accounts, totaling $315 million in the Army and $62 million in the Navy.
Counting these appropriations, the
FY 2004 DOD budget contains more than $860 million for congressionally
designated medical research projects.
R&D in the Defense Agencies
R&D
in the Defense Agencies increases $1.5 billion or 8.8 percent to $19.0
billion, primarily because of a $948 million increase to $7.6 billion
for advanced development activities in the Missile Defense Agency (MDA;
see Table B). The missile defense program
is a high priority for the Bush Administration, and also for Congress.
Including some missile defense development funded by the Army, the total
missile defense development effort climbs 19 percent to $8.2 billion
in FY 2004, in preparation for deploying a test system as soon as possible.
The MDA (formerly the Ballistic Missile Defense Organization) no longer
funds research; nearly all missile defense funds go to advanced development,
testing, manufacturing development, and evaluation of missile defense
systems with an additional $824 million elsewhere in the DOD budget
for procurement of completed systems.
The Defense Advanced Research Projects Agency (DARPA) has an R&D budget
of $2.8 billion in FY 2004, an increase of $144 million or 5.4 percent
(see Table B). DARPA is mostly research-oriented,
and 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 has been dogged by controversy over the
past year concerning some of its research projects. One DARPA proposal,
to do research on a possible ‘futures market’ to predict terrorist attacks,
was canceled on the drawing board after public outcry over the concept.
Another DARPA project that had already started, the Terrorism Information
Awareness (TIA) project to engage in R&D on creating better systems
and networks to analyze, process, and find patterns in intelligence
and other data, attracted considerable public and congressional criticism
based on worries that the project could lead to new technologies with
unprecedented capabilities to monitor personal information. The final
Defense bill terminates the TIA project, eliminates TIA’s
home in DARPA’s Information Awareness Office,
and instructs DARPA to distribute the Office’s other programs among
the other 7 DARPA offices.
Next Steps
President Bush
signed the Defense appropriations bill into law on September 30, making
DOD the first federal department to receive its final FY 2004 budget.
But this was not the final word for DOD. On November 6, President Bush
signed into law the FY 2004 supplemental bill to pay for the war, occupation
and reconstruction of Iraq
and Afghanistan,
of which $66 billion went to DOD, including $339 million in classified
development spending. There are
also some minor changes to the DOD budget pending in the FY 2004 omnibus
bill, which contains FY 2004 funding for most of the other federal departments;
this bill may be signed into law in late January.
(This analysis is one of a series of AAAS R&D
Funding Updates on the FY 2004 appropriations process. This analysis
includes information on R&D in House-Senate conference appropriations
for the Department of Defense. The complete series of AAAS R&D Funding
Updates, including continually updated analyses of R&D by agency
in FY 2004 appropriations, is available on the AAAS
R&D Web Site (http://www.aaas.org/spp/rd) in the “FY
2004 R&D” or the “What’s New” sections.)
- September 29, 2003 (revised December 11)
AAAS R&D Budget and Policy Program
1200 New York Ave, NW
Washington, DC 20005
(202) 326-6607; -6600
www.aaas.org/spp/rd
