Highlights
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The Senate would give the Department of Defense
(DOD) $76.3 billion for its R&D programs in FY 2008, a sharp cut of 2.4 percent
or $1.9 billion from this year’s total in contrast to increases for most nondefense
R&D programs (see Table A). But Congress is likely to add $2.9 billion or more in supplemental development
funds later this fall to make the final 2008 total an increase.
- Both House and Senate
appropriators would add hundreds of millions to DOD’s future-oriented investments,
primarily for earmarked projects, but would still leave funding down from this
year’s funding level. DOD proposed to slash “Science and Technology” (S&T)
spending 22 percent or $3.1 billion down to $10.9 billion, erasing seven years
of gains; the Senate would add back $1.2 billion, almost entirely for earmarks,
to bring DOD S&T to $12.1 billion, down 13.9 percent (see Table
C). S&T funding, which includes basic research, applied research, medical
research, and technology development, would fall to 2.56 percent of the regular
DOD budget.
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DOD’s support of basic and applied research would fall in the FY 2008 Senate appropriation,
though not as much as DOD requested. Basic research (“6.1”) would fall 0.4
percent to $1.6 billion, keeping funding roughly even in real terms with the last
seven years (see Table A). The Senate would not cap
indirect costs on basic research grants at 20 percent as the House would do. Applied
research (“6.2”) would fall 13.2 percent to $4.6 billion. The research-oriented
Defense Advanced Research Projects Agency (DARPA) would see its budget fall 8.7
percent to $2.8 billion (see Table B) because of
congressional frustration over DARPA’s inability to spend past budgets.
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The Air Force would be the big winner in the
2008 budget. Air Force R&D would
climb 5.8 percent or $1.4 billion to $25.9 billion because of increases to various
weapons development programs, and is certain to climb even higher when supplemental
funds are added later in the year (see Table B).
DOD R&D in FY 2008 Senate Appropriations
On
September 12, the Senate Appropriations Committee approved its version of the
FY 2008 Defense appropriations bill (HR 3222) providing funding for most of the
Department of Defense (DOD). The full House approved its own version of the bill
on August 4. The Senate bill, like the House version, contains
nearly $460 billion in 2008 discretionary spending for most of DOD’s programs.
A separate bill funds DOD military construction accounts, and the Defense bill
excludes (for the moment) more than $140 billion in supplemental funds requested
for ongoing war operations that Congress plans to consider later this fall.
The Senate Defense bill, like the House version
of the same bill, appears to provide less for DOD R&D in 2008 than the current
year, the first time in more than a decade that DOD R&D would decline (see
Figure 1). But the primary reason DOD R&D would decline $1.9 billion or 2.4
percent to $76.3 billion in the Senate appropriation (see Table
A) is that Congress has not yet considered $2.9 billion in development funds
requested as part of a $140+ billion 2008 supplemental war funding package. Since
Congress is expected to approve most of the supplemental request intact, the final
DOD R&D total for 2008 is likely to be another large increase when all is
said and done, and will almost certainly be another record high. Thus, the decline
in defense R&D shown in Figure 1 for 2008 is likely to be temporary. (All
figures in this analysis exclude the $2.9 billion supplemental request from the
FY 2008 Request figures to facilitate comparisons with FY 2008 House and Senate
figures. FY 2007 figures INCLUDE $1.1 billion in 2007 supplemental
R&D funding enacted in May.)
On the research side,
the Senate would add $744 million to the Pentagon’s request for basic and applied
research, to turn steep requested cuts into more moderate cuts. Although
physical sciences research is a top priority for the Bush Administration on the
nondefense side of the budget through continued support of the American Competitiveness
Initiative (ACI), DOD support of research would fall in 2008 even though DOD is
the fifth largest federal supporter of the physical sciences. DOD basic research funding (the “6.1” category)
would fall 0.4 percent in the Senate mark to $1.6 billion, a slight cut of $6
million compared to a $136 million requested cut after the Senate's addition of
$100 million in "6.1" earmarks and increases for university research
and other program increases. Since 2001, basic research has remained at roughly
$1.5 billion in today’s dollars (see Figure 2), a trend the House and Senate would
continue. The Pentagon has proposed steep cuts to “6.1” funding every year in
recent years, primarily from the proposed elimination of congressional
earmarks of the year before, but every year Congress adds them back in. Basic
research in the three services would fall in both the House and Senate appropriations,
but funding for basic research in the Defense Agencies would increase 4.3 percent
in the Senate to $310 million. Funding for the three-service University Research
Initiatives, which awards basic research grants competitively to university performers,
would receive a combined $293 million, up 4.3 percent from 2007. The Defense Research
Sciences program, funded in the three services and in DARPA, would receive a combined
$957 million, down 2.4 percent instead of a 6 percent requested cut. The largest
increase among basic research programs would go to the fledgling National Defense
Education program (NDEP), more than doubling from $19 million this year to $44
million in 2008. (For details of DOD R&D in the FY 2008 budget request, see
Chapter 5 of AAAS Report XXXII:
R&D FY 2008 or the February 21 AAAS R&D Funding
Update on DOD. For details of House appropriations for DOD R&D, see the
July 31 AAAS R&D Funding Update.)
Figure 1. (Click on the image for PDF)
The
Senate bill does not contain a provision in the House Defense bill that would
limit indirect cost reimbursements on basic research grants to 20 percent. Currently,
university and other external research performers are reimbursed for indirect
costs associated with the performance of research at rates negotiated through
a government-wide process overseen by the Office of Management and Budget (OMB).
Leading research universities usually receive indirect cost reimbursements exceeding
50 percent of direct costs, so the House provision could dramatically reduce “6.1”
research awards. The fate of the indirect cost provision will be decided in House-Senate
conference.
The Senate would add $272 million to the request
for applied research (the “6.2” category) for a 13.2 percent cut instead of an
even steeper cut in the DOD request. Despite the additional Senate dollars, including $428 million in earmarked
projects and added funds for medical research and alternative energy research
partially offset by program cuts in other areas, applied research in the three
services and the Defense Agencies would all fall compared to 2007 (see Table
C).
In a repeat of the usual
pattern, the Senate would join the House in restoring funding to medical research
programs the Pentagon proposes to cut. The Senate would give medical research
in the Defense Health Program $477 million (see Table
A), down from $680 million this year but more than triple the request, including
$240 million (up from $218 million in 2007 and the 2008 House appropriation) for
breast, ovarian, and prostate cancer research through peer-reviewed, competitively
awarded grants. Over the years, the DOD peer-reviewed program has become a major
force in cancer research; by comparison, NIH spending on these three cancers totals
$1.2 billion this year. In addition to these congressionally initiated but peer
reviewed research programs, there are several earmarked medical research projects
in this account and hundreds of millions of dollars in earmarked medical research
programs in Army accounts. The Senate would also allocate an additional $50 million
for peer reviewed medical research on other topics.
Figure
2. (Click on the image for PDF)
DOD funding of “S&T” (the “6.1” through
“6.3” categories plus medical research) would fall to $12.1 billion in FY 2008,
a dramatic drop of 13.9 percent (see Table C and
Figure 2), with cuts in all categories. Despite the Senate adding $1.2 billion
to the request for S&T, including $1.2 billion in earmarks and a net zero
in non-earmarked increases for some areas and cuts in others, the additional dollars
would not be enough to reverse the $3.0 billion or 22 percent cut in the 2008
request. For every year this decade, Congress has been far more supportive of
S&T funding than the Pentagon. In what has now become an annual ritual, the
Pentagon proposes sharp cuts each year and Congress adds billions of dollars in
the appropriations process. Last year, the Pentagon requested a 19 percent
cut in S&T, but Congress ended up appropriating just a 1 percent cut, primarily
but not entirely through the addition of earmarks. So far, this year’s 2008 appropriations
looks to be the same, though the Pentagon’s requested cut is so steep that the
House and now the Senate are unable to bring S&T funding back to 2007 funding
levels.
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 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 six budgets have met that goal (after taking out Iraq
and Afghanistan
war spending). In 2007, DOD S&T equals 3.2 percent of the regular DOD budget
(excluding emergency war funding), but the House and Senate 2008 appropriations
would fall short with ratios just under 2.6 percent.
The Senate 2008 appropriation, like the House
appropriation, would mark a continuing retreat from DOD S&T’s record-high
2005 funding level in real terms (see Figure 2). DOD S&T increased in
the first half of this decade after hitting post-Cold War lows in the late 1990s.
Figure
3. (Click on the image for PDF)
Air
Force weapons development programs would be the biggest winners in the 2008 budget.
DOD weapons development (the non-S&T portion of DOD R&D) would just
barely increase $62 million or 0.1 percent to $64.3 billion in the Senate, but
there would be an enormous increase in Air Force R&D to an unprecedented $25.9
billion (up 5.8 percent), a total likely to go even higher when 2008 supplemental
appropriations are added (see Table B and Figure
3). The Air Force increase would go to programs in the “6.4” and higher categories
for engineering, development, and testing work on specific weapons systems. By
contrast, Navy R&D would fall sharply and Army R&D would increase only
slightly (see Figure 3).
R&D
in the Defense Agencies would fall $1.7 billion or 7.8 percent to $20.2 billion
(see Table B). The research-oriented Defense
Advanced Research Projects Agency (DARPA) would see its budget fall $272 million
or 8.7 percent in the Senate to $2.8 billion. 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 basic research funding would increase 10.8 percent in
the 2008 Senate appropriation to $161 million, but funding for its applied research
programs would fall steeply, due partly to congressional frustration that DARPA
has been unable to spend all of its past budgets. The Senate would also cut funding
for the research-oriented Defense Threat Reduction Agency (DTRA) with a 7.8 percent
cut to $421 million. The Chemical and Biological Defense Program (CBDP) is another
relatively research-oriented agency, devoting a third of its resources to research.
CBDP would receive a $939 million total Senate appropriation (down 4 percent).
The House would increase funding for both DTRA
and CBDP.
Among other Defense Agencies, the Missile Defense
Agency (MDA) remains the largest with a Senate appropriation of $8.4 billion,
down $943 million or 10 percent from 2007 because of congressional concerns about
unrealistic missile defenses deployment schedules (see Table B). MDA no longer
funds research and is a development-oriented agency with almost all of its funding
in the “6.4” category; its budget has grown dramatically in recent years (see
Figure 3) and would remain high by recent historical standards even after the
House and Senate cuts.
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.
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 Senate would bring total defense
R&D in 2008 to $80.4 billion (see Table D), down
2.2 percent or $1.8 billion from the current year but headed to a record total
once 2008 supplemental appropriations are added this fall.
Outlook for Defense R&D
The
Senate will try to debate and approve its Defense appropriations bill before the
October 1 start of FY 2008, but could be delayed by its debate on the Defense
authorization bill this week. The full House debated and approved its Defense
appropriations bill on August 4, just before the August congressional recess.
Congress will try to send a final version of the bill to President Bush before
October 1, but the likelihood of accomplishing that is diminishing as October
approaches, especially if appropriators follow through on their intention of attaching
war supplemental funding to the final Defense bill. Because the details of the
supplemental appropriations are far from completion, much less a resolution of
House-Senate differences in the regular bill, the Defense bill will almost certainly
join the nondefense spending bills as unfinished business for the fall. Although
President Bush has threatened vetoes of many of the domestic spending bills for
exceeding his budget requests, the Defense bill will come in well under his request
and is not expected to attract a veto unless Congress succeeds in attaching policy
language limiting the Iraq
war.
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September 19, 2007
AAAS R&D Budget and Policy Program
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