Highlights
-
Congress has agreed on $82.4 billion for Department
of Defense (DOD) R&D programs in FY 2009, an enormous increase of $3.0 billion
or 3.8 percent to an all-time high (see Table A).
-
DOD’s support of basic research would gain 12.9 percent or $210 million to
$1.8 billion in 2009 (see Table A). Congress would
renew a provision to cap indirect costs on basic research grants at 35 percent.
“6.1” funding would increase substantially in all three military services and
the Defense Agencies. Applied research (“6.2”) would gain 1.7 percent to $5.1
billion.
- Congress would add $2.7
billion to the request for DOD’s future-oriented investments, almost entirely
for earmarked projects, to turn a steep requested cut into a sizeable increase.
DOD “Science and Technology” (S&T) spending would reach $14.3 billion in 2009,
up 6.6 percent or $882 million over 2008 to reach 2.80 percent of the regular
DOD budget (see Table C). S&T funding includes
basic research, applied research, medical research, and technology development.
-
The research-oriented Defense Advanced Research Projects Agency (DARPA) would
do well with an 11 percent increase to $3.1 billion in 2009, despite congressional
concerns about the agency’s ability to execute its portfolio (see Table
B). DOD weapons development would increase dramatically
by $2.1 billion or 3.3 percent to an all-time high of $68.0 billion.
DOD R&D in FY 2009 House-Senate Conference
Appropriations
On
September 24, the House of Representatives debated and approved a massive FY 2009
continuing resolution (CR; HR 2638 amendment) funding federal government programs
through March 6 but also containing $23 billion in disaster relief spending and
three full FY 2009 appropriations bills, including a final Defense appropriations
bill with funding for the Department of Defense (DOD). [President Bush signed
the bill into law on September 30, making DOD one of only three departments to
receive their final 2009 budgets (the others are the Departments of Homeland
Security (DHS) and Veterans Affairs (VA)).] Even though
neither the House nor the Senate ever reported their respective versions of the
Defense bill, the CR Defense bill represents a compromise between the unreleased
draft House and Senate versions of the bill and is equivalent to a House-Senate
conference report. (For details of the President’s request for DOD R&D, see
the February 12 AAAS R&D Funding Update or Chapter
5 in AAAS Report XXXIII: R&D FY 2009.)
The
Department of Defense (DOD) continues to spend record amounts in wartime and receives
a record $513 billion regular budget in 2009, up from $480 billion in 2008, in
addition to $66 billion in 2009 supplemental funding for war costs already appropriated
in June as part of the 2008 supplemental appropriations bill. DOD is also investing
record amounts in the next generation of weapons: the final FY 2009 Pentagon
budget would provide $82.4 billion for R&D next year, an increase of
$3.0 billion or 3.8 percent (see Table A). [The 2009 total includes $3.5 billion
for 1,559 congressionally designated, performer-specific projects, or earmarks,
down slightly from $3.5 billion in 2008 earmarks.] In real terms, the 2009 budget
is a new record, exceeding the 2007 budget as the largest DOD R&D budget in
history (Figure 1). (The 2009 DOD R&D totals include nearly $400 million in
development funding already approved in June as part of the 2008 supplemental
bill, and have been further adjusted to reflect general reductions contained in
the 2009 bill; all 2008 figures include $1.7 billion in R&D funding from the
2008 supplemental bill, and have been further adjusted to reflect rescissions
in the CR; see the June 23 R&D Funding Update on the
2008 supplemental bill for more details.)
Congress has endorsed DOD’s proposal to dramatically
increase its support of basic research. DOD basic research funding (the “6.1”
category) would increase 12.9 percent or $210 million to $1.8 billion (see Table
A). The majority of “6.1” research is performed in universities. Both
the 2008 and 2009 basic research portfolios contain substantial numbers of basic
research earmarks, but even without them the core (non-earmarked) “6.1” programs
would receive substantial increases in 2009. [The 2009 "6.1" portfolio
contains $158 million in earmarks, down slightly from $165 million in 2008. Without
earmarks the DOD basic research increase is 15 percent between 2008 and 2009.]
“6.1” funding in all three military services and the Defense Agencies would gain
substantially (see Table C), with especially large
increases in Army and Defense Agencies basic research. Although DOD is the fifth-largest
federal sponsor of physical sciences research, DOD has been left out of the American Competitiveness Initiative (ACI), the Bush Administration’s ongoing
effort to double federal basic physical sciences research funding over a decade.
But in 2009, DOD sees tremendous gains for its physical sciences-centered basic
research portfolio anyway. Funding for the three-service University Research
Initiatives program, which awards basic research grants competitively to university
performers, would receive a combined $338 million, up 12.6 percent or $38 million
from 2008. The Defense Research Sciences program, funded in the three services
and in DARPA, would receive a combined $1.1 billion, up 12.0 percent. The National
Defense Education program (NDEP) would climb from $44 million in 2008 to $69 million
next year (up 56 percent). From 2001 to
2007, basic research remained stable at just over $1.5 billion in today’s dollars
(see Figure 2), but the 2008 and 2009 increases could signal a new era of growth.
Figure 1. (Click on the image for PDF)
The
2009 Defense appropriations bill retains a provision first included in the 2008
bill that would limit indirect cost reimbursements on basic research grants to
35 percent. 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 provision could dramatically reduce
“6.1” research awards next year.
Applied research (the “6.2” category) would
gain 1.7 percent or $87 million to $5.1 billion in sharp contrast to a 16 percent
requested cut (see Table A). [In the FY 2009 request, DOD proposed to cut $839 million in 2008 congressional
earmarks in the 2009 budget, but Congress instead added back $875 million in "6.2"
earmarks in the 2009 CR; if 2008 and 2009 earmarks are excluded, then "6.2"
funding would increase 1.2 percent in 2009.]
The final Defense bill would
give medical research in the Defense Health Program $903 million (see Table A),
up $9 million from a 2008 total padded with $350 million in funds from the June
supplemental. Congress allocates $250 million in 2009 (up from $228 million in
2008) for longstanding programs in breast, ovarian, and prostate cancer research
through peer-reviewed, competitively awarded grants. But in 2009, Congress initiates
several new peer-reviewed research programs on lung cancer, orthopedics, spinal
cord injuries, vision, and selected cancer topics, and also continues a recently
initiated peer-reviewed medical research program on miscellaneous topics. These
newer programs receive a combined $186 million in the final Defense bill, for
a total of $436 million in DOD funding in 2009 for competitively awarded medical
research grants, up 57 percent from 2008. In addition to these congressionally
initiated but peer-reviewed research programs, there are $77 million in earmarked
medical research projects in this account [and $360 million in earmarked medical
research programs in the services' accounts, mostly the Army.] As shown in Figure
2, DOD funding of medical research has grown dramatically over the past decade.
Figure 2. (Click on the image for PDF)
Congress would reverse proposed cuts in DOD
funding of “S&T” (the “6.1” through “6.3” categories plus medical research)
for a total of $14.3 billion, an $882 million or 6.6 percent increase (see
Table C). [DOD proposed to discontinue $2.2 billion
in S&T 2008 earmarks in 2009, but Congress added $2.7 billion to the request,
of which $2.2 billion would be in the form of 2009 earmarks.] In what has now
become an annual ritual, the Pentagon proposes sharp cuts each year in S&T
funding and Congress adds billions of dollars in the appropriations process, primarily
but not entirely through the addition of earmarks. [If 2008 and 2009 earmarks
are excluded, then DOD "S&T" funding would increase $847 million
or 7.5 percent to a non-earmarked $12.1 billion in 2009.]
The 2009 DOD S&T appropriation represents
a gain after three years of decline from the record-high 2005 funding level in
real terms (see Figure 1). DOD S&T increased in the first half of this
decade after hitting post-Cold War lows in the late 1990s; since 2005, most of
the cuts have been in the “6.3” programs (see Figure 2), while applied research
“6.2” has declined less and “6.1” has held steady and even increased in 2008 and
2009. 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 most DOD regular budgets this decade have
met that goal (after taking out Iraq and Afghanistan war spending), but the 2008
and now 2009 appropriations fall short with a ratio of 2.80 percent.
Figure 3. (Click on the image for PDF)
Once
again, development programs would be big winners in the 2009 budget. DOD weapons
development (the non-S&T portion of DOD R&D) would increase $2.1 billion
or 3.3 percent to an unprecedented $68.0 billion. The Air Force would benefit
the most, with its R&D budget hitting a historical high of $27.1 billion in
2009 (see Table B), a dramatic $1.1 billion or 4.1
percent increase that would have been even larger if Congress had not trimmed
the request (see Figure 3). 90 percent of 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. Navy R&D would also increase dramatically, by
9.2 percent to $19.8 billion, just off historical highs (see Figure 3). The Air
Force and Navy are jointly responsible for the largest single development project
in the federal budget, the Joint Strike Fighter, which receives $3.5 billion in
2009 for development, $419 million more than the request. By contrast, Army R&D
would fall by 1.0 percent down to $12.0 billion.
R&D
in the Defense Agencies would gain $393 million or 1.9 percent to $21.5 billion
(see Table B). The
research-oriented Defense Advanced Research Projects Agency
(DARPA) would be a winner with a $321 million or 11.4 percent increase to $3.1
billion. The appropriation falls short
of the request by $155 million, but DARPA winds up with the same percentage increase
as requested because Congress also rescinds $150 million in unspent funds from
2008 and prior years as part of the final Defense bill. About 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 16 percent
to $202 million, while funding for its applied research programs would increase
more modestly by 3.3 percent, falling short of even larger requested increases
partly because of continuing congressional dissatisfaction with DARPA’s inability
to fully execute its past budgets.
Congress
would also increase funding for the research-oriented Defense Threat Reduction
Agency (DTRA) with a 3.3 percent increase to $471 million, including a doubling
of DTRA’s basic research university partnership program to $22 million. Congress
would also expand the budget of the Chemical and Biological Defense Program (CBDP),
another relatively research-oriented agency, by 8.1 percent to $1.1 billion, although
the increases would be in the “6.3” and higher categories instead of CBDP research.
The Office of the Secretary of Defense (OSD) would also receive an increase, of
5.0 percent to $2.6 billion. Included in OSD is a relatively new effort on Human,
Social, and Culture Behavior Modeling (HSCB), a research program to engage social
scientists to understand the social and cultural terrain of nations in which the
U.S. military
may operate; the effort, begun at $10 million in FY 2008, would expand to $23
million next year.
The
Missile Defense Agency (MDA) remains the largest defense-wide agency with a 2009
budget of $8.5 billion, but its funding would decline 2.0 percent to a level below
recent highs (see Figure 3). MDA no longer funds research and is a development-oriented agency with almost
all of its funding in the “6.4” category; its annual budget has doubled in real
terms since the beginning of the decade (see Figure 3).
Outlook
for Defense R&D
[The
House quickly approved the continuing resolution (CR) containing the Defense bill
on September 24 with little debate, followed by Senate approval on September 27
and a presidential signature on September 30 just hours before the start of FY
2009.]
DOD
enters FY 2009 in a relatively secure financial situation. Not only is the Pentagon
set to receive a full appropriation at the start of the fiscal year for the first
time in years, but Congress and the President have already appropriated (in June)
$66 billion in FY 2009 war funding to keep the Iraq and Afghanistan war effort
funded through the first several months of FY 2009, unlike other years in which
lawmakers have played catch up in paying for the war. DOD’s regular 2009 budget
is a record $513 billion, on top of which lawmakers have already added $66 billion
for the war. Within this record total, 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; in the last few years, these development funds have been further
boosted by war supplementals.
Despite
these large requested increases, until now DOD’s longer-term investments in S&T
have lagged. But the dramatic increase for DOD basic research in 2009 represents
a break from past budgets containing flat “6.1” funding, and also represents at
least one bright spot for overall federal basic research funding in a budget environment
in which most domestic agencies will have to wait for months to find out their
final 2009 budgets.
(This
analysis is one of a series of AAAS R&D Funding Updates on FY 2009 congressional
appropriations. The complete series of AAAS R&D Funding Updates, including
continually updated analyses of R&D in FY 2009 appropriations, is available
on the AAAS R&D web site (http://www.aaas.org/spp/rd)
in the "FY 2009 R&D" or the "What's
New" sections.)
- September 25, 2008 (revised Oct. 27 - revisions
in [ ] )
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
