(This analysis is a preview of
the DOD chapter in the forthcoming AAAS Report XXXI: Research and Development
FY 2007, a comprehensive look at the President's budget for R&D in FY
2007. This analysis contains revised AAAS estimates of DOD R&D, different
from figures originally presented in the President's budget. More tables and continually
updated supplemental materials on R&D in the FY 2007 budget can be found on
the AAAS R&D Web site at http://www.aaas.org/spp/rd.)
Highlights
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R&D in the Department of Defense (DOD) would continue to reach new
highs in the FY 2007 budget with a $1.6 billion or 2.2 percent increase to $74.1
billion in the President’s proposed budget (see Table
1). As in previous years, the entire increase and more would go to weapons
development programs, leaving funding for research and technology development
in steep decline.
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In a repeat of earlier requests, DOD would slash “Science and Technology” (S&T)
investments by 18.6 percent or $2.6 billion down to $11.2 billion (see Table
3). S&T, which includes basic research, applied research, medical research,
and technology development, would fall to 2.55 percent of the regular DOD budget.
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Despite being a major sponsor of physical sciences research, a top Administration
priority on the nondefense side of the budget, DOD’s support of basic and
applied research would fall in FY 2007. Basic research (“6.1”) would fall
3.3 percent to $1.4 billion, primarily from the removal of congressional earmarks
(see Table 1). Applied research (“6.2”) would fall
13.4 percent to $4.5 billion, again mostly but not entirely from the proposed
elimination of FY 2006 earmarks. The research-oriented Defense Advanced Research
Projects Agency (DARPA) would see its budget climb 10.6 percent to $3.3 billion
(see Table 2).
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The Air Force and the Missile Defense Agency (MDA) would be the big winners
in the proposed boosts for weapons development funding. Air Force R&D would climb 12.9 percent
to $24.4 billion because of increases to various space and classified development
programs (see Table 2), while MDA development would
surge 21.2 percent to $9.3 billion after a steep cut in 2006.
DOD R&D in the FY 2007 Budget
The
Department of Defense (DOD), still engaged in a long and expensive war in Iraq,
continues to spend record amounts. But DOD is also investing record amounts in
the next generation of weapons; the FY 2007 Pentagon request would provide $74.1
billion for DOD R&D next year, another substantial increase of $1.6 billion
or 2.2 percent after similar increases in previous years (see Table
1). In real terms, the requested increase would just match the 2.2 percent
expected inflation rate after staying slightly ahead in 2005 and 2006 (see Figure
1). But DOD’s investment in weapons development programs would jump $4.2 billion
to $62.9 billion, resulting in a steep $2.6 billion cut to DOD’s “S&T” investments
in basic and applied research and technology development.
Figure 1.
(click on the image for PDF)
Although physical sciences research is a top priority for the Bush Administration
on the nondefense side of the budget, DOD support of
research would fall in 2007. DOD is the fifth largest federal supporter of physical
sciences research, with about a tenth of the federal total.
DOD basic research funding (the “6.1” category) would fall 3.3 percent to $1.4
billion after a similar cut in 2006, though the 2007 cut would be due to the
proposed elimination of congressional earmarks. Basic research in the Army and
Navy would fall, partially offset by increases in the Air Force and the Defense
Agencies. Funding for the three-service University Research Initiatives would
receive a combined $249 million, a steep cut of 8.4 percent but nearly level funding
after taking out 2006 earmarks. URI competitively awards basic research grants
to university performers. The Defense Research Sciences program, funded in the
three services and Defense Agencies, would receive a combined $905 million, down
1.5 percent but an increase if earmarks are excluded. DARPA’s
Defense Research Sciences effort would climb 13.0 percent to $151 million, part
of a broader proposed increase for the agency. The relatively new National Defense
Education Program (NDEP), founded last year to encourage U.S.
students to pursue science and engineering degrees, would see its budget rise
from $2 million last year to $10 million in 2006 and up to $20 million next year.
Applied research funding (the “6.2” category) is in for a steeper cut
of 13.4 percent down to $4.5 billion after an increase in 2006. The three services would see their “6.2” investments
fall sharply, but Defense Agencies applied research would increase by 6.5 percent
to $2.2 billion, led by an 8.7 percent increase in DARPA “6.2” funding and a 14
percent increase in applied research for the Chemical and Biological Defense Program
(CBDP).
In
a repeat of the usual pattern, the Pentagon would dramatically cut medical research programs (see Table 1)
in the Defense Health Program, by 76 percent down to $131 million. These programs
award $214 million combined in 2006 for breast, ovarian,
and prostate cancer research through peer-reviewed, competitively awarded grants.
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.
There are also earmarked research projects on medical topics, and a separate pool
of $50 million for peer reviewed grants for miscellaneous medical topics. But
it is DOD policy not to request continuing funds for most of these congressionally
initiated programs, so the 2007 budget sees a sharp cut in this account.
Figure 2.
(click on the image for PDF)
DOD funding of “S&T” (the “6.1” through “6.3” categories plus
medical research) would total $11.2 billion in FY 2007, a dramatic drop of
$2.6 billion or 18.6 percent (see Table 3), primarily
from steep proposed cuts in the “6.3” (technology development) programs, although
there would also be cuts in the other categories. For every year this decade,
Congress has been far more supportive of S&T funding than the Pentagon, with
the Pentagon proposing sharp cuts each year and Congress adding billions of dollars
in the appropriations process. Last year,
the Pentagon requested a 22 percent cut in S&T, but Congress ended up appropriating
a slight increase, primarily but not entirely through the addition of earmarks.
Advocates of DOD S&T in the science and engineering community argue that S&T
funding is essential for building the knowledge and technology base for future
DOD needs. Over the past decade, 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. But the Pentagon has never fully endorsed this goal:
although the 2001 Quadrennial Defense Review, DOD’s military strategy document,
included the 3 percent goal, the just-released 2005 QDR does not contain it, and
the annual DOD budget request has never met the 3 percent figure. It has been
up to Congress to boost S&T funding so that the last five budgets have met
that goal after taking out Iraq
and Afghanistan
war spending. In the 2006 final budget, DOD S&T equals 3.3 percent of the
non-emergency DOD budget, but the 2007 request would bring that ratio down to
2.55 percent.
The final 2006 appropriation keeps DOD S&T near its record-high 2005
funding level in real terms, but the 2007 request would be a sharp reversal (see
Figure 2). 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. 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, and
would increase to 13 percent in 2007 only because of steep proposed cuts to “6.3”
programs.
The
weapons development effort is where the big gains would be in the 2007 budget
proposal. DOD weapons development (the non-S&T portion of DOD R&D)
would jump $4.2 billion or 7.1 percent to $62.9 billion in the request, led by
large increases for the Air Force and the Missile Defense Agency (MDA; see Table
2). These programs, in “6.4” and higher categories in DOD’s classification
system, are devoted to engineering, development, and testing work on specific
weapons systems and are extraordinarily expensive compared to research programs.
For example, the largest single development project in DOD, and indeed the entire
federal budget, would once again be the Joint Strike Fighter (JSF), funded by
the Navy and the Air Force at $4.0 billion in 2007. JSF development alone would
almost match the entire R&D budget of the National Science Foundation (NSF);
because the plane is also entering procurement in 2007, the total JSF project
would be $5.3 billion next year. Much of the Air Force’s $2.8 billion increase
for R&D would go to development of space and satellite communications, new
weapons systems, and classified development programs. The MDA’s
efforts in missile defense systems development would receive large increases in
2007 after a cut in 2006, rising 21.2 percent to $9.3 billion, with large increases
for ballistic missile defense technologies. Including procurement and R&D
in other agencies, the total missile defense effort would be $10.4 billion next
year, a nearly $1.7 billion increase.
Led
by the MDA increase, R&D in the Defense Agencies would climb $1.3 billion
or 6.4 percent to $20.8 billion (see Table 2). In addition to the 21.2 percent
increase for MDA, which is entirely development, there would be a 10.6 percent
or $316 million increase to $3.3 billion for the research-oriented Defense
Advanced Research Projects Agency (DARPA). Slightly more than half of DARPA’s budget goes
to “6.1” and “6.2” activities, with the remainder devoted to “6.3” technology
development. 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 funding would increase across
the board in areas such as tactical technology, materials, network-centric warfare,
information and communications technology, cognitive computing, electronics technology,
sensors, guidance technology, and basic research, but with the notable exceptions
of proposed cuts in land warfare technology and biological warfare defense (down
$36 million to $112 million). DARPA’s IT (information technology) research efforts would
be the biggest winners: the Information and Communications Technology “6.2” portfolio
would jump 24 percent to $243 million, and the Cognitive Computing Systems “6.2”
portfolio would climb 35 percent to $220 million. Among the other Defense Agencies,
the Chemical and Biological Defense Program
(CBDP) would lose 8.6 percent of its funding in 2007 after a large increase in
2006, but the CBDP research program would continue to expand, with $99 million
for “6.1” funding (up 5.1 percent) and $280 million for “6.2” funding (up 13.6
percent) offsetting cuts in DARPA’s efforts in this
area.
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 biodefense
R&D related to military security (see Figure 1). The 2007 budget request would
keep DOD R&D and total defense R&D at record levels.
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. 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 and physical 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. 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.
DOD
R&D spending is heavily concentrated, with five states receiving the majority
of DOD’s billions. 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
DOD
is presiding over a 2006 budget that will soon hit a record $537 billion after
Congress approves a $70 billion war supplemental in the next few weeks. With military
occupation costs in Iraq
and Afghanistan
running well over $2 billion a week in spending over and above the regular DOD
budget, DOD spending is expected to keep hitting new highs. Although the 2007
DOD total request is $489 billion, well below the 2006 level, the request contains
only $50 billion for war costs; assuming military operations continue at the present
level through the end of 2007, the 2007 DOD budget could end up above $550 billion
when all is said and done. Within these record totals, DOD R&D has also set
new records, in part driven by development costs of new weapons related to current
and near-term combat needs. Even the record R&D total of $72.5 billion for
2006 could shortly increase by another $782 million or so in the pending supplemental
for classified development efforts related to the war.
Despite
these large requested increases, it has been up to Congress to sustain DOD’s more
longer-term investments in S&T. As the 2007 budget
goes to Congress, Congress once again faces the task of finding money to add to
proposed cuts in basic and applied research programs. But in a fiscal environment
in which, despite budget deficits, defense spending appears immune from fiscal
restraint, Congress is likely to have relatively little trouble boosting DOD R&D
across the board.
(More
materials on R&D in the FY 2007 budget, historical data and charts, and more
information on AAAS Report XXXI: Research and Development FY 2007, can
be found on the AAAS R&D Web site at http://www.aaas.org/spp/rd.)
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February 22, 2006
AAAS R&D Budget and Policy Program
1200 New York Avenue,
NW
Washington, DC 20005
(202) 326-6607
AAAS R&D Web site: http://www.aaas.org/spp/rd
