GUIDE TO R&D FUNDING DATA -
THE PRESIDENT'S PROPOSED FY 2006 BUDGET

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AAAS Offers Online Tutorial on the Federal Budget

The AAAS R&D Budget and Policy Program now offers an online tutorial on the U.S. federal budget process. This tutorial is adapted from an "Introduction to the Federal Budget" seminar presented by Kei Koizumi, Director of the R&D Budget and Policy Program, to various audiences. The tutorial is designed to introduce audiences to the U.S. federal budget process, especially as it relates to federal R&D funding. The tutorial will be updated continually with the latest federal budget information, including information about the FY 2006 budget currently under consideration in Congress, highights of which are below.

The full budget seminar will be part of the Science and Technology Policy 2005 AAAS Leadership Seminar, a 4 1/2-day 'crash course' in science and technology policy, which will be offered at AAAS from November 14-18, 2005. Click here to find out more, or to register.

Click here to begin the budget tutorial

- August 22, 2005

August 22 - Online Tutorial on the U.S. Federal Budget Process

Budget Highlights:

President Bush released his proposed fiscal year (FY) 2006 budget on February 7. This budget requires approval from Congress. Below are selected tables and charts based on data from the FY 2006 budget documents. (FY 2006 begins on October 1, 2005.)

The data below are for the proposed budget only, and do not reflect congressional action. The complete set of budget documents is available on-line from the Office of Management and Budget in the Executive Office of the President, or in printed form from the Government Printing Office. This page presents data only for the overall federal budget. Please see our FY 2006 R&D page for our analyses of R&D funding proposals contained within the federal budget. For information specifically on R&D in the federal budget, please go to the next section of the Guide.

The first table presents an overview of the FY 2006 budget by broad category of spending (discretionary, Social Security, Medicare, etc.), including comparisons of the FY 2006 budget with the most recent estimates for FY 2005. It shows that two-thirds of the budget is for mandatory programs (net interest and entitlement programs), leaving just one-third of the budget for discretionary spending (annually appropriated programs) out of which nearly all federal R&D is funded.

-Table I-2. The President's FY 2006 Budget (2/05)

The chart below displays the same information in pie chart form.

-Chart. The President's FY 2006 Budget by Category (2/05)

The FY 2006 budget also contains projections for spending in budget categories out to FY 2010. Growth in entitlements is expected to continue unchecked, while discretionary spending would decline in real terms. Interest on the national debt, once expected to disappear, would continue to be a large expense because the government will continue to run deficits.

-Chart. Federal Budget by Category, FY 2004-2010 (2/05)

The FY 2006 budget proposes to cut overall discretionary spending in FY 2006, in sharp contrast to rapid growth in recent years. But the FY 2006 proposals allot nothing for the FY 2006 and future costs of occupying Iraq and Afghanistan and restrain nondefense, non-homeland security spending with a cut of nearly 1 percent in FY 2006. The Bush Administration proposes to restrain spending growth in future years, also.

-Chart. Trends in Discretionary Spending, FY 1976-2010 (revised 8/05)

Historical data in the budget show that mandatory programs have grown steadily as a share of the federal budget, and discretionary spending declined until recent years, but the discretionary share of the federal budget is now increasing (especially defense) and is expected to continue to increase moderately to FY 2010.

Table I-3. Historical Trends in R&D and Federal Outlays (2/05)
Chart. Distribution of Federal Outlays by Category, 1970-2010 (2/05)

Other historical data in the charts below highlight budget deficits or surpluses, the national debt in dollars and as a share of GDP, and federal spending and revenues as a share of the economy. In the past several years, budgets have gone from deficits to surpluses, but because of the recession, tax cuts, homeland security costs, and wars in Iraq and Afghanistan, the federal government recorded a record budget deficit in FY 2004 and is projected to borrow another recoed amount in 2005. Future projections exclude many costs, such as future costs of the occupation of Iraq and Afghanistan and extensions of expiring tax cuts. The government had begun to pay down the national debt to the public in the late 1990s, but with the return of deficits the government is adding to the national debt again. The government will continue to accumulate government-held debt, mainly debt held by the Social Security trust fund.

At the same time, federal spending as a share of the economy has increased in recent years, while federal revenues have declined as a share of the U.S. economy because of increased spending on one side and proposed and enacted tax cuts on the other.

The discretionary portion of the budget funds programs with a variety of missions, though the largest single mission remains national defense. Discretionary spending is appropriated each year through 13 appropriations bills of varying sizes. The chart below shows appropriations under the old structure; Congress recently approved a reorganization of appropriations bills. The chart will be updated soon.

-Chart. Discretionary Spending by Appropriations Bill, Proposed FY 2006 (2/05)

R&D is a significant but declining part of the federal budget. Nearly all federal R&D is funded through the discretionary portion of the budget, and although R&D has remained relatively constant as a share of all discretionary spending, R&D has declined as a proportion of the total budget as the discretionary share of the budget has declined. (For more information on R&D in the federal budget, please go to the next section of this Guide.)

-Chart. R&D as Percent of the Federal Budget: FY 1962-2006 (2/05)
-Chart. R&D as Percent of Discretionary Spending: FY 1962-2006 (2/05)

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