Highlights
- Congress has agreed on a final budget of $73.0 billion for R&D in
the Department of Defense (DOD) in FY 2006, $1.5 billion more than
last year for a 2.1 percent increase in contrast to a requested cut
(see Table A).
- Congress
adds $3.1 billion to the request for DOD
“Science and Technology” (S&T) programs for a total of $13.8 billion
(see Table C). S&T, which includes research, medical
research, and technology development, would
have declined 22 percent in the Pentagon request, but Congress allocates
a slight increase to bring funding to 3.3 percent of the total DOD budget.
- Most DOD services and agencies gain in final FY 2006 appropriations. The Defense Advanced Research Projects Agency
(DARPA) budget remains flat at $3.0 billion, while the Chemical and
Biological Defense Program (CBDP) sees its budget surge 47 percent to
$1.0 billion (see Table B). The Missile
Defense Agency, however, loses $1.2 billion in funding down to $7.7
billion.
- Congress adds millions of dollars for DOD support of basic and applied research, much of it in
the form of earmarks. Basic research (“6.1”) falls 2.9 percent to
$1.5 billion, but this is an improvement over the Pentagon’s 13 percent
proposed cut (see Table A). Applied research
(“6.2”) gains 6.5 percent to $5.2 billion, again despite steep cuts
in the Pentagon request.
DOD R&D in FY 2006 Conference Appropriations
On December 18,
congressional appropriators finally released the conference report (final
agreement) for the FY 2006 Defense appropriations bill (HR 2863), which
funds most of the Department of Defense (DOD). The House approved it
just hours later on the morning of December 19, but Senate approval
is not assured because the bill has become a vehicle for several controversial
legislative provisions, including measures to open the Arctic National
Wildlife Refuge (ANWR) to oil drilling and to grant liability protections
to biodefense vaccine manufacturers. The bill
also contains $3.8 billion in emergency funding for avian flu preparedness,
$33 billion in new and reallocated funds for hurricane disaster assistance,
$50 billion for six month’s worth of emergency military operations funding
for Iraq
and Afghanistan,
and a 1 percent across-the-board cut for nearly all FY 2006 appropriations.
The Military Quality of Life bill (HR 2528), already signed into law,
funds the remainder of DOD. Together, the bills provide $415
billion for the regular DOD budget in FY 2006, but emergency appropriations
bring total DOD funding to $465 billion and counting in FY 2006.
The final
Defense bill provides a record-breaking $73.0 billion for DOD R&D
in FY 2006, a substantial increase of $1.5 billion or 2.1 percent
over the previous record of $71.6 billion last year (see Table
A). (All figures in this analysis are adjusted to reflect rescissions,
supplementals, and several across-the-board
cuts in the Defense bill.) While the Pentagon requested a cut in DOD
R&D, Congress reshuffled DOD priorities to provide increases to
a broad range of R&D programs, offset by cuts in other DOD accounts
as well as funding shifts from the regular DOD budget to emergency funding.
(For details of the President’s request for DOD R&D, please see
Chapter 6 of AAAS Report XXX: R&D
FY 2006 or the February 23 DOD
R&D Funding Update). The DOD request would have been
the first real cut in DOD’s R&D since 1996 after four years of record-setting
gains (see Figure 1), but Congress extends the gains for a fifth year.
Although
82 percent of the R&D increase goes to development programs, DOD
support of basic and applied research does far better in the final appropriation
than in the request. DOD’s “6.1” (basic research) and “6.2” (applied
research) activities combined gain 4.2 percent to $6.6 billion, a $1.2
billion improvement over a 14 percent requested cut (see Table
A). In real terms, the proposed cut would have reversed six years
of increases and left DOD research support at 2000 funding levels, but
the final increase enables DOD support to stay ahead of expected inflation.
Figure 1. (click
on the image for PDF)
But basic research funding (the “6.1” category) falls 2.9 percent to $1.5
billion, reversing an 11 percent increase last year, even though
Congress adds funds to many “6.1” accounts to improve on a 13 percent
requested cut. Table C shows that
basic research in the Army, Navy, and Air Force all decline, though
by less than the request. Basic research funding in the Defense Agencies,
however, increases by 5.7 percent to $260 million, mostly because of
a near-doubling of the basic research portfolio of the Chemical and
Biological Defense Program (CBDP) to $94 million. Funding for the University
Research Initiatives program falls 7.5 percent down to $272 million
despite additions to the request in the form of earmarks. URI competitively
awards basic research grants to university performers and is funded
by the three services. The Defense Research Sciences program, which
primarily funds in-house research but also awards external grants, receives
a combined $919 million in FY 2006, a cut of 5 percent. One area due
for increased funding is the new National Defense Education Program
(NDEP), started this year in the Office of the Secretary of Defense
(OSD) with $3 million and increasing to $10 million next year in the
final appropriation.
Applied research funding (the “6.2” category) gains 6.5 percent in the
congressional plan to $5.2 billion in FY 2006 instead of a 15 percent
requested cut. Appropriators moderate steep requested cuts
to applied research programs in the three services, mostly through the
addition of earmarks, and add to a requested increase for the Defense
Agencies.
Congress provides $537 million for congressionally
designated medical research programs in FY 2006 (see Table
A) in the Defense Health Program. Included in the total is $214
million combined for breast, ovarian, and prostate cancer research through
peer-reviewed, competitively awarded grants (down slightly from the
current year total). Over the years, the DOD program has become a major
force in cancer research; NIH spending on these cancers, for example,
is estimated at $1.2 billion annually. Most of the remaining appropriation
goes to earmarked research projects on medical topics, although there
is a separate pool of $50 million for peer reviewed grants for miscellaneous
medical topics. In addition, there is nearly $500 million in the Army
R&D appropriation for earmarked medical R&D projects in “6.2”
and “6.3” accounts.
Figure 2. (click
on the image for PDF)
DOD funding of “S&T” (the “6.1” through “6.3” categories plus
medical research) totals $13.8
billion in FY 2006, a slight increase of 1.2 percent from $13.6 billion
last year (see Table C). For the past
several years, Congress has been far more supportive of S&T funding
than the Pentagon, and the pattern continues to hold true in FY 2006.
The final appropriation is $3.1 billion more than the $10.7 billion
DOD request, which would have amounted to a 22 percent cut. 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 four budgets, including this year’s,
have met that goal after taking out Iraq
and Afghanistan
war spending. The final Defense bill boosts the ratio to 3.3 percent
of the non-emergency DOD budget.
The final FY 2006 appropriation keeps DOD S&T near its record-high
2005 funding level. DOD S&T has increased in recent years after
hitting post-Cold War lows in the late 1990s, though it took nearly
two decades for S&T funding to return to mid-1980s levels (see Figure
2). 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, a trend that has many DOD S&T advocates worried.
Recently, advocates have called for at least 20 percent of S&T funding
to be devoted to basic research. As Figure 2 shows, basic research makes
up only 11 percent of S&T funding in 2006, a ratio has been declining
steadily over the past decade with no reversal in sight.
The overall weapons
development effort is up nearly $1.3 billion in 2006, but there is mixed
news for DOD’s big-ticket weapons development programs. The largest
single development project in DOD, and indeed the entire federal budget,
is once again the Joint Strike Fighter (JSF), funded by the Navy and
Air Force together at a development cost of $4.6 billion, up from $4.3
billion last year as the fighter plane nears production. In a sign of
how expensive weapons development can be, the JSF project alone is more
than the entire R&D portfolio of the National Science Foundation
(NSF). But there are steep cuts in development funding for several projects
making up the national missile defense system in the Missile Defense
Agency (MDA; see below), and cuts in a satellite communications development
project (down 8 percent to $430 million).
After several
years of large increases, R&D in the Defense Agencies falls $1.2
billion or 5.7 percent to $19.6 billion, primarily because of a $1.2
billion or 13.1 percent cut to $7.7 billion for development in the Missile
Defense Agency (MDA; see Table B). Although missile defense systems have begun
to be deployed in Alaska, the development effort slows in FY 2006. 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.
The Defense Advanced Research Projects Agency (DARPA) sees its R&D funding
remain flat at $3.0 billion in FY 2006, just $2 million more than
last year (see Table B). DARPA is research-oriented (51 percent of its
budget is for research, with the remainder devoted to “6.3” technology
development), 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’s
efforts in areas such as tactical technology, materials, network-centric
warfare, information and communications technology, and cognitive computing
receive increases, while there are cuts in DARPA support of electronics
technology, biological warfare defense, sensors, and guidance technology,
and steep cuts in basic research.
Among the other Defense Agencies, the big winner is the Chemical and Biological
Defense Program (CBDP), with a 47 percent increase for its R&D to
$1.0 billion. CBDP funds chemical and biological defense R&D at
all stages from basic research through testing and evaluation of new
technologies; most categories receive large increases in FY 2006, especially
basic research with a 74 percent boost to $94 million and applied research
(up 46 percent to $247 million). But R&D in the Office of the Secretary
of Defense (OSD) falls nearly 11 percent to $2.1 billion. The Defense
Threat Reduction Agency (DTRA), after a large increase in 2005, sees
its R&D funding fall 7 percent down to $422 million. Most of the
cuts come from DTRA’s applied research programs
oriented toward weapons of mass destruction (see Table
B).
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). The final Defense bill
keeps both DOD R&D and the narrower DOD “S&T” portfolio near
the record high funding levels of FY 2005.
DOD
supports a diverse group of science and engineering disciplines, as
shown in Figure 3. More than half of DOD’s research portfolio supports
the engineering sciences, not surprising considering the discipline’s
potential contributions to DOD’s warfighting capabilities. But DOD also invests heavily in
the mathematics and computer sciences research necessary to sustain
a high-tech, IT-heavy military and in physical sciences research. In
recent years, DOD support of life sciences research has also grown,
as a result of growth in congressionally designated medical research
programs but also from DARPA and service investments in biological defense.
Figure 3. (click
on the image for PDF)
DOD is responsible for only 13
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 4). DOD supports 36 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 also supports
graduate education in these fields and seeds 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. DOD support for these disciplines should increase slightly in FY 2006
as a result of the Defense appropriations bill.
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. 40 percent of DOD research is performed
by DOD laboratories, while 35 percent is performed by industry. 19 percent
of DOD basic and applied research is performed by universities and colleges.
All performers should benefit from the increases in “6.2” funding in
the FY 2006 DOD budget; the development increases will go almost
entirely to defense contractors.
Figure 4. (click
on the image for PDF)
DOD R&D spending is heavily
concentrated, with five states receiving the majority of DOD’s billions (see
Figure 5). Because development funding in particular is awarded in multibillion
dollar contracts, DOD R&D tends to go states with large military
contractors such as California, Maryland,
Virginia, Alabama,
and Massachusetts. Virginia
also benefits from being the location of the Pentagon as well as numerous DOD
laboratories and FFRDCs, while the District
of Columbia and Maryland
also benefit from DOD facilities located close to the Pentagon. DOD research spending
is less concentrated, especially DOD investments in university research.
Outlook
for Defense R&D
The final appropriation
for DOD R&D, combined with already enacted defense-related R&D
funded by the Department of Energy (DOE) and the Department of Homeland
Security (DHS), brings total federal defense R&D to a new record
of $77.4 billion in FY 2006 (see Table D
and Figure 1), a 1.8 percent boost over the record funding level of
$76.0 billion last year. U.S.
spending on defense R&D exceeds defense R&D in every other nation
combined, and the gap between the U.S.
and the rest of the world would further widen in FY 2006. Among major
U.S.
allies, only the United Kingdom
and France
invest large proportions of their government R&D portfolios on defense,
though nowhere near the majority share that defense R&D holds in
the U.S.
federal R&D portfolio.
Figure 5. (click
on the image for PDF)
The final Defense bill goes to
the Senate for final approval this week, but could run into roadblocks there
because of opposition to some of its provisions, especially the ANWR oil
drilling provision. If the Senate approves the bill this week, President Bush
is expected to sign the bill into law before Christmas, finally bringing to an
end the FY 2006 appropriations process. The pressing need for emergency funds
in Iraq and Afghanistan
means that there will be one or two supplemental bills in FY 2006 to add $35
billion or more to the budget before the fiscal year is done.
- December 19, 2005
(This analysis is one of a series of AAAS R&D
Funding Updates on FY 2006 congressional appropriations. The complete
series of AAAS R&D Funding Updates, including continually updated
analyses of R&D in FY 2006 appropriations, is available on the
AAAS R&D Web Site (http://www.aaas.org/spp/rd)
in the "FY 2006 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
AAAS R&D
Web site: www.aaas.org/spp/rd
