- Congress has come to a final agreement on a record-breaking $70.3 billion
for R&D in the Department of Defense (DOD) in FY 2005,
$4.6 billion more than this year for a 7.1 percent increase (see Table
A).
- The big winner in DOD next year will be the missile defense program. Funding
for development in the Missile Defense Agency (MDA) jumps 16 percent
to $8.8 billion in preparation for initial deployment of national missile
defenses later this year (see Table B).
- Congress provides large increases for DOD support of basic and applied research. Basic research
(“6.1”) will gain 6.1 percent to $1.5 billion, in contrast to steep
cuts in the Pentagon request (see Table A).
Applied research (“6.2”) gains 9.5 percent to $4.8 billion, again in
contrast to requested cuts.
- DOD “Science and Technology” (S&T) increases by nearly $1 billion
or 7.9 percent to an all-time high of $13.6 billion in FY 2005. “S&T,”
which includes research, medical research, and technology development,
comfortably exceeds 3 percent of the total
DOD budget of $401 billion (see Table C).
On July 20, Congress came to an agreement on the conference
report (final version) of a $416 billion Defense appropriations bill (HR 4613) that
will provide record-breaking sums for Department of Defense (DOD) R&D in
fiscal year 2005, beginning October 1. By the end of this week (July 23), after
final House and Senate approval, the Defense bill will become the first of the
13 FY 2005 appropriations bills to go to the President for his signature. (Some
minor revisions to the Defense bill were made in November’s omnibus budget
bill.) The bill funds nearly all of DOD’s FY 2005 budget
and also provides $25 billion immediately for costs associated with the
continuing occupation of Iraq
and Afghanistan.
All told, DOD is expected to have $401 billion in regular funds for FY 2005 and
an additional $25 billion in Iraq
emergency funds in FY 2004, but even more emergency funds will be necessary next
year to pay for further unbudgeted costs in Iraq
and Afghanistan.
The final Defense bill appears to provide nearly $70 billion in FY 2005 for
DOD’s “RDT&E” account containing nearly all of DOD’s
R&D, but across-the-board reductions contained elsewhere in the bill reduce
the total by $1 billion. All figures in the tables and in this analysis have
been reduced to reflect the across-the-board reductions, and minor reductions
in the omnibus budget bill.
Priorities
in DOD R&D
The final FY 2005 Defense bill gives DOD $70.3 billion for its R&D
programs, an increase of 7.1 percent or $4.6 billion that gives DOD
its largest R&D budget in history, following substantial increases
in each of the past four years (see Figure 1). Within the same overall
total of $401 billion for DOD, the final Defense bill provides more
for R&D than either the earlier House version ($69.2 billion) or
the Senate version ($69.5 billion) of the bill. As in past years, nearly
all of the increase (89 percent) will go to development programs.
DOD support of basic and applied research will increase substantially in FY 2005. In the DOD request released
in February, DOD’s “6.1” (basic research) and “6.2” (applied research)
activities combined would have fallen 10.6 percent to $5.2 billion.
But the final appropriation adds funds to both categories to provide
a total of $6.3 billion for DOD “6.1” plus “6.2”, a boost of 8.7 percent
over FY 2004.
Figure 1. (click
on the image to view or download a color, full-size PDF version of the
chart)
Basic research funding (the “6.1” category) will rise $85 million to $1.5
billion next year, in contrast to a steep requested cut. Most of the increase will go to congressionally
designated research projects (earmarks), but core DOD research funding
will also increase. This year, funding for the University Research
Initiatives (URI) program switched from the Office of the Secretary
of Defense (OSD) to the three services. URI competitively awards basic
research grants to university performers; in FY 2005, DOD will continue
URI in the three services at a combined level of $302 million, up $19
million from this year. The broader Defense Research Sciences programs,
which fund research at DOD laboratories, universities, and other performers,
will collectively total $952 million, up substantially from $884 million
in FY 2004. “6.1” funding in each of the three services (Army, Navy,
and Air Force) as well as the Defense Agencies will increase (see Table
C).
Applied research funding (the “6.2” category) will climb 9.5 percent or
$420 million to $4.8 billion in FY 2005, instead of a requested
cut. Again, applied research in each of the three services and the Defense
Agencies will increase, with much of the increase going to earmarks.
Applied research in the Defense Agencies will increase 9.9 percent because
of jumps in Defense Advanced Research Projects Agency (DARPA) funding
(see DARPA, below).
Applied research on medical topics would also
increase, to a new high of $507 million in FY 2005. Since the early
1990s, Congress has appropriated funds for congressionally
designated medical research programs in the DOD budget. In the past,
nearly all of these funds were appropriated in the Army, but in FY 2000
Congress began to appropriate the majority of them outside the RDT&E
accounts in the Defense Health Program (see Table
A). The FY 2005 total of $507 million for medical research includes
$150 million for breast cancer research, $85 million for prostate cancer
research, and $10 million for ovarian cancer research in peer-reviewed,
competitively awarded grants, the same as this year. There is also $50
million for peer-reviewed research on other medical topics. Earmarked
medical research projects make up most of the remaining medical research
appropriation.
DOD Funding of “S&T”
DOD funding of “S&T” (the “6.1” through
“6.3” categories plus medical research) will climb to $13.6 billion in FY 2005, an increase of $993 million or
7.9 percent (see Table C). For
the past several years, Congress has been more supportive of S&T
funding than the Pentagon, and the pattern holds true again in
the FY 2005 budget. The final congressional
appropriation is nearly $3 billion more than the $10.6 billion DOD request,
and is itself higher than the earlier House and Senate versions of the
bill. Advocates of DOD S&T in the science and engineering community
argue that DOD S&T funding is essential for building the knowledge
and technology base for future DOD needs, and have successfully argued
that post-Cold War cutbacks over the past decade eroded this base. In
the past few years, 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. The last three budgets, including
this year’s, have met that goal after taking out Iraq
and Afghanistan
war spending. The FY 2005 request would have cut S&T funding steeply,
lowering the S&T/budget ratio to 2.64 percent; the House Defense
bill boosted the ratio to 3.24 percent and the Senate provided 3.10
percent, but the final Defense bill tops them all with an S&T/budget
ratio of 3.38 percent.
Figure 2. (click
on the image to view or download a color, full-size PDF version of the
chart)
DOD S&T will reach its highest funding level ever in FY 2005.
Although DOD S&T approached $13 billion in today’s dollars during the
height of the Cold War in the late 1980s, DOD S&T hit post-Cold War lows of
just above $8 billion in today’s dollars in the late 1990s (see Figure 2). But
in recent years, congressional appropriators have provided steady increases,
and the FY 2005 budget carries DOD S&T investments above $13 billion for
the first time. While this is a relief for DOD S&T advocates, Figure 2
shows that the composition of the DOD S&T portfolio has been changing. DOD
support of basic research has increased relatively little, and is a shrinking
proportion of the DOD S&T portfolio. While “6.2” funding has increased a
little more, recent growth in DOD S&T has come predominantly from growth in
“6.3” funding of advanced technology development rather than from research.
R&D in the Services and Defense Agencies
R&D in the
Army, Navy, the Air Force, and the Defense Agencies will all increase
next year (see Table B), with most of the
increases going to weapons development activities for big-ticket weapons
systems such as the Joint Strike Fighter ($4.3 billion in the Navy and
Air Force) and armored systems modernization in the Army ($2.3 billion).
R&D
in the Defense Agencies will increase $1.6 billion to $20.5 billion,
primarily because of a $1.2 billion increase to $8.8 billion for development
in the Missile Defense Agency (MDA; see Table
B). The missile defense program
is a high priority for the Bush Administration and Congress. While
Congress ends up providing less than the $9.1 billion MDA requested,
the appropriation will still be a substantial 15.8 percent increase
over FY 2004. The MDA (formerly the Ballistic Missile Defense Organization)
no longer funds research; there would be some funds for technology development
but now nearly all missile defense funds go to advanced development,
testing, manufacturing development, and evaluation of missile defense
systems. Including procurement and development funds in other parts
of the DOD budget, Congress provides $9.8 billion for ballistic missile
defense programs, divided into theater missile defenses (battlefield
defense) and national missile defenses (defense of U.S. territory).
MDA is gearing up for initial deployment this fall of national missile
defense systems.
The Defense Advanced Research Projects Agency (DARPA) sees its R&D funding
increase by 4.9 percent to $3.0 billion, slightly off the $3.1 billion
request. The final Defense bill follows the Senate lead in criticizing
several DARPA programs for being too large to manage effectively. But
instead of cutting funding, the Defense bill splits four large programs
making up half the DARPA budget (in computing systems and communications,
materials and electronics, aerospace and space, and sensor and guidance
systems) into eight smaller ones to give each new program a smaller
research focus area; the combined budgets of the eight new programs
are well above current-year funding for the four larger programs. The
biggest boost to DARPA will be for its basic research “6.1” program
in Defense Research Sciences, which will climb 23 percent to $171 million.
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. In the 1980s, DOD supported nearly two-thirds of total federal
R&D. Because of defense cutbacks following the end of the Cold War,
however, DOD’s support for R&D declined by a third after FY 1987,
bottoming out in the mid-1990s, but has increased dramatically in the
past few years to new highs. 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 R&D
related to military security (see Figure 1).
Figure 3. (click
on the image to view or download a color, full-size PDF version of the
chart)
DOD is responsible for only
15 percent of all federal support of basic and applied research (“6.1”
and “6.2”), but is a key sponsor for several science and engineering
(S&E) disciplines (see Figure 3). DOD supports 37 percent of all
federal research in the computer sciences and a similar proportion of
all engineering research, as well as significant shares of research
in mathematics and oceanography. DOD’s impact is even greater in several
engineering sub-disciplines such as electrical engineering and mechanical
engineering. DOD funds research in these disciplines for their contributions
to national defense, but this research is also a key source for major
innovations in the civilian economy, most evident in DOD’s early support
for research that led to the now-ubiquitous Internet. DOD is also a
key supporter of social sciences research.
A majority of
DOD’s R&D (and nearly all the work in categories “6.4” and higher)
is performed by industrial firms such as the large defense contractors
Lockheed Martin and Boeing. FFRDCs (federally funded research and development centers),
defense laboratories, and colleges and universities also perform R&D.
If one excludes DOD development, which is nearly exclusively performed
by industry, DOD basic and applied research (“6.1” and “6.2”) is performed
by a diverse group of institutions. 39 percent of DOD research is performed
by DOD laboratories, while 32 percent is performed by industry. A quarter
(25 percent) of DOD basic and applied research is performed by universities
and colleges. All performers should benefit from the large increases
in “6.1” and “6.2” funding in the FY 2005 DOD budget; the development
increases will go almost entirely to defense contractors.
The final Defense bill adds substantially
to the Pentagon’s FY 2005 request, but there remain questions over the
long-term outlook for DOD’s research programs. The Pentagon’s five-year budget
plan calls for the total DOD budget to increase from $402 billion in FY 2005 up
to $488 billion in FY 2009, though these budgets exclude any costs associated
with the occupation of Iraq. As noted above, Congress provided $1 billion less
for DOD overall but $1.6 billion more within the total for R&D.
The AAAS analysis
of the Pentagon projections show that total DOD R&D would increase
in line with inflation and end up at $71.1 billion by FY 2009. But the
Pentagon’s five-year budget projections call for sharp cuts in DOD’s
support of S&T, including DOD support of basic and applied research.
Total DOD S&T would fall from $12.6 billion this year down to $10.5
billion in FY 2006 before edging up slightly to $11.2 billion by FY
2009, for a cut of 17.9 percent after inflation between FY 2004 and
2009. DOD S&T would fall further and further away from the 3 percent
goal and end up at 2.3 percent of the total DOD budget by FY 2009 in
the DOD projections. DOD support of basic research would fall 17 percent
after inflation over the next five years, while
DOD applied research would fall by 11 percent. The steepest cuts are
projected to take place over the next two years, with some recovery
after that. While the cuts would still leave “6.2” and “6.3” funding
somewhat above recent historical levels, they would leave “6.1” funding
on a steady downward trend from the past decade. (For more on the five-year
projections for federal R&D, see the April
22 (revised May 7) AAAS Analysis of the Outyear
Projections for R&D in the FY 2005 Budget.)
The final FY 2005
appropriation, of course, alters the Pentagon projections for FY 2005
dramatically by turning requested cuts in “6.1” and “6.2” to appropriated
increases. It remains to be seen whether future Congresses will continue
to find the dollars to alter the Pentagon’s projected course for research
funding. And the Pentagon itself will continually revise its budget
plans to reflect changing defense needs, budget outlooks, and future
war and occupation costs.
President Bush signed the Defense bill into law on August 5, making
the Defense bill the first of the 13 FY 2005 appropriations bills to be signed
into law. Congress and President Bush put the bill on a fast track because the
$25 billion in emergency funds for Iraq
became available immediately after the President signs; the regular FY 2005 funds,
of course, became available on October 1.
(For details
of R&D in the FY 2005 DOD request, see the February
20 AAAS R&D Funding Update; for details of House and Senate
authorizations for DOD, see the June 2 AAAS
R&D Funding Update; for details of House appropriations for
DOD, see the June 23 AAAS R&D Funding Update;
and for details of Senate appropriations for DOD, see the June
29 AAAS R&D Funding Update.)
- July 22, 2004 (revised November 30)
(This analysis is one of a series of AAAS R&D Funding Updates
on the FY 2005 congressional appropriations process. This analysis
includes information on R&D in final 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 2005 appropriations,
is available on the AAAS R&D
Web Site (http://www.aaas.org/spp/rd) in the "FY
2005 R&D" or the "What's New"
sections.)
AAAS R&D Budget and Policy Program
1200 New York Ave, NW
Washington, DC 20005
(202) 326-6607; -6600
science_policy@aaas.org
www.aaas.org/spp/rd
