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Go to:
-R&D in the
FY 2003 Budget: DOD and NIH Increases Lead to Record Totals
-Highlights of
the Major R&D Funding Agencies
-The Budgetary
Context for FY 2003: Big Increases for Defense, Flat Funding for Other
Programs, and Deficits are Back
-Outlook
for the FY 2003 Budget Process
-Table 1. R&D
in the FY 2003 Budget by Agency
-Table 2. Research
in the FY 2003 Budget
-Table 3."Federal
Science and Technology Budget"
-Table 4. Major
Functional Categories of R&D
PDF version
of this document
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(All figures in this analysis are preliminary
and will be revised in later AAAS releases. This analysis is a preview
of the forthcoming AAAS Report XXVII: Research and Development FY 2003,
a comprehensive look at the President's budget for R&D in FY 2003. More
tables and continually updated supplemental materials on R&D in the FY
2003 budget can be found on the AAAS R&D Web site at http://www.aaas.org/spp/R&D.)
On February 4, President Bush released a FY 2003 budget
request containing overall increases for the federal investment in R&D,
especially for the high-priority areas of defense, health, and homeland
security against terrorism. In sharp contrast to the financial optimism
of last year's budget when budget projections forecast endless surpluses,
the FY 2003 budget assumes a deficit in FY 2002 and proposes deficit
spending for FY 2003.
Citing the war on terrorism and a recessionary economy
as justification for a return to deficit spending, President Bush's
proposals for further tax cuts and large increases in discretionary
spending follow on even larger increases in FY 2002. Discretionary spending,
the one-third of the budget subject to annual appropriations decisions
by Congress and the President, is the part of the budget out of which
nearly all federal R&D is funded. The FY 2003 budget calls for overall
discretionary spending to rise 6.8 percent or $49 billion in FY 2003
to $767 billion, on top of an FY 2002 total already inflated by emergency
appropriations approved in the immediate aftermath of September 11.
But in a repeat of last year's request, nearly the entire increase would
go just to the Department of Defense (DOD) and the National Institutes
of Health (NIH), leaving all other discretionary programs, including
R&D programs outside NIH and DOD, with flat or declining funding
overall.
R&D in the FY 2003 Budget:
DOD and NIH Increases Lead to Record Totals
Because DOD and NIH are the two largest funding sources
of federal R&D, the special treatment given to them in the budget
would allow overall federal R&D to increase substantially in FY
2003. But the other R&D funding agencies would share in flat funding
for nondefense discretionary spending. (All figures in this release
are preliminary and will be revised in later AAAS releases with revised
agency data.)
- The request for total federal R&D in FY 2003 is a record
$111.8 billion, $8.6 billion or 8.3 percent more than FY 2002 (see
Table 1). As was the case last year, the
proposed increases for DOD ($5.4 billion) and NIH ($3.9 billion) account
for more than the overall increase, leaving all other R&D funding
agencies combined with less money than in FY 2002.
- There are no clear patterns in the mix of increases and decreases
for the other R&D funding agencies (see Figure 1). Unlike last
year, when most R&D funding agencies would have seen their R&D
funding decline, FY 2003 would see increases and decreases scattered
even within agency portfolios as agencies try to prioritize in an
environment of scarce resources. Some cuts are due to the Bush Administration's
campaign to eliminate congressional R&D earmarks, which reached
$1.5 billion in FY 2002. Other cuts would be declines to more normal
funding levels from FY 2002 totals inflated by post-September 11 counter-terrorism
appropriations; while counter-terrorism R&D would see increases
at some agencies such as NIH, other agencies with one-time laboratory
security upgrades in FY 2002 would see their counter-terrorism R&D
funds decline sharply in FY 2003.
- Nondefense R&D would increase by 7.8 percent or $3.8
billion to $53.2 billion. NIH would make up almost half of the entire
nondefense R&D portfolio with another large increase, the fifth
and final installment of a plan to double the NIH budget in the five
years to FY 2003. Excluding NIH, however, all other nondefense
R&D would fall by 0.4 percent to $26.7 billion.
Figure 1. (click on the image to view or download a color,
full-page PDF version of the chart)
- The federal investment in basic research would grow by 8.5
percent or $2.0 billion to another all-time high of $25.5 billion
(see Table 2). NIH has supported the
majority of federal basic research since FY 2000 and in FY 2003 would
provide 57 percent of all federal support. NIH basic research would
increase 9.7 percent, less than its overall R&D increase, because
of a new emphasis in FY 2003 on applied research on cancer and bioterrorism.
Most agencies would see their basic research funding increase in the
FY 2003 budget request.
- The total federal investment in research (basic and applied
research) would increase 8.8 percent to $51.8 billion in FY 2002 (see
Table 2), with a large increase for
NIH (up 16.1 percent to $25.7 billion) responsible for most of the
increase. Without NIH, total federal research would increase moderately
by 2.5 percent or $645 million to $26.1 billion.
- The high priority placed by the Bush Administration on defense and
health is evident in Table 4, which
shows federal R&D by mission area. Defense and health R&D
together make up more than three-quarters of the federal R&D portfolio,
and their share is increasing. Defense R&D (up 8.8 percent) and
health R&D (up 15.2 percent) would increase substantially in the
request because of large increases for DOD and NIH. Most other national
missions would see their R&D decline in the FY 2003 request, except
for general science and space. Space R&D would increase 7.0 percent
to $9.2 billion because of substantial new investments in space science
and space launch technologies in the NASA request, while general science
R&D (up 2.6 percent) would benefit from the Bush Administration's
favorable attitude toward NSF and its programs, including the transfer
of three programs from other missions to the NSF portfolio.
- Three major multi-agency initiatives would receive increases in
the FY 2003 budget. After jumping by more than $100 million in FY
2002, funding for the Nanoscale Science, Engineering, and Technology
Initiative would climb another $100 million (or 17.3 percent)
to $679 million in FY 2003. NSF's lead contribution to the initiative
would rise by 11.1 percent to $221 million. NSF also continues its
lead role in the Networking and Information Technology R&D
initiative, which would see its budget edge up 2.5 percent to $1.9
billion. NSF's contribution would be $678 million, mostly in the Computer
and Information Science and Engineering (CISE) directorate. The longstanding
U.S. Global Change Research Program would climb 5.0 percent
to $1.8 billion. While NASA's Earth Science program continues to provide
the bulk of funding ($1.1 billion), the increases would go mostly
to other agencies' contributions, including $40 million in new funds
for the Climate Change Research Initiative (CCRI) aimed at funding
fundamental research to answer key gaps in knowledge in climate science.
- The Office of Management and Budget (OMB) again presents a 'Federal
Science and Technology' (FS&T) budget in the FY 2003 budget (see
Table 3). The FS&T budget
is successor to the Clinton Administration's "21st
Century Research Fund" and contains most of the same programs.
FS&T is a collection of selected R&D and non-R&D programs
that emphasize basic and applied research and the creation of new
knowledge or technologies. It also includes some S&T education
and training activities but excludes most development, and is designed
to be an alternative measure for the federal investment in science
and technology. FS&T would increase 8.9 percent to $57.0 billion
in FY 2002, with a mixed bag of increases and decreases for programs
skewed toward the positive by the large increase for NIH.
Highlights of the Major R&D
Funding Agencies
- The National Institutes of Health (NIH) would receive $27.3
billion for its total budget in FY 2003, an unprecedented increase
of $3.7 billion (15.7 percent) that would fulfill the commitment to
double the NIH budget between FY 1998 and 2003. NIH R&D would
rise 17.4 percent to $26.5 billion. The big winner would be the National
Institute of Allergy and Infectious Diseases (NIAID) which would receive
a boost of 57.3 percent to $4.0 billion as NIH's lead institute for
bioterrorism R&D and a key part of the Administration's homeland
security request. NIAID is also the lead NIH institute in AIDS research,
which would increase 10 percent over FY 2002 to $2.8 billion. Cancer
is another high priority for the Bush Administration; the FY 2003
cancer research budget would be $5.5 billion, of which $4.7 billion
would go to the National Cancer Institute (NCI; up 12.2 percent).
Another high priority would be Buildings and Facilities, which would
nearly double to $633 million over an FY 2002 total already inflated
by emergency counter-terrorism funds. The new funds would further
improve NIH laboratory security, build new facilities for bioterrorism
research, and finish construction of NIH's new Neuroscience Research
Center. Most of the other institutes would receive increases between
8 and 9 percent. With the large increase, NIH hopes to offer a record
35,920 research project grants in FY 2003, with grants an average
of 4.0 percent larger than FY 2002.
- The Department of Defense (DOD) would receive its second-largest
dollar boost in history for its R&D to $54.6 billion in FY 2003,
an increase of $5.4 billion or 10.9 percent coming after a record
increase of $7 billion last year. Most of the increase would go to
the development of weapons systems in the services (the Air Force
and Navy in particular) rather than research. Basic and applied research
in DOD would remain flat despite the record increase in the overall
DOD budget of 13.4 percent to $380 billion; DOD S&T, which includes
research plus generic technology development, would fall 2.0 percent
down to $9.7 billion (see Figures 1 and 2). After nearly doubling
its budget in FY 2002, the Ballistic Missile Defense Organization
(BMDO) would see its R&D budget decline slightly to $6.7 billion,
which would still be more than 50 percent above the FY 2001 funding
level. The Defense Advanced Research Projects Agency (DARPA) is a
big winner in the FY 2003 budget with a proposed 19.2 percent increase
to $2.7 billion across its broad portfolio of research programs aimed
at expanding the frontiers of knowledge and military technology to
provide future solutions to DOD's technology needs, including a 23
percent boost for Defense Research Sciences, DARPA's basic research
portfolio.
Figure 2. (click on the image to view or download a color,
full-page PDF version of the chart)
- The National Science Foundation (NSF) wins praise from the
Bush Administration for its management, and increases for its R&D
programs. The NSF budget would total $5.0 billion in FY 2003, an increase
of 5.0 percent. Excluding NSF's non-R&D education activities,
NSF R&D would be $3.7 billion, a boost of 3.6 percent or $129
million. More than half of the increase is due to the NSF Geosciences
directorate's acquisition of the National Sea Grant program from Commerce,
hydrologic sciences from Interior, and environmental education from
EPA. The three programs account for $76 million of the $129 million
increase. Most disciplinary programs in the research directorates
would receive small increases or cuts. While mathematical sciences
would receive a substantial 20 percent increase to $182 million, other
programs in Mathematical and Physical Sciences (MPS) such as chemistry,
physics, and astronomy would all decline. Another big winner would
be Information Technology Research (up 9.9 percent), though at the
expense of other computer sciences research. Funding for the Major
Research Equipment and Facility Construction account would fall $13
million to $126 million, with one new start (EarthScope) more than
offset by proposals not to renew two FY 2002 congressionally earmarked
projects. In the non-R&D education programs, NSF would boost funding
for the Administration's high-priority Math and Science Partnerships
from $160 million to $200 million, but would cut most other education
and human resources programs.
- The National Aeronautics and Space Administration (NASA)
would see its total budget increase by 1.4 percent to $15.1 billion
in FY 2003, but NASA's R&D (two-thirds of the agency's budget)
would climb 5.3 percent to $10.1 billion. Although spending on Human
Space Flight, which includes the International Space Station and the
non-R&D Space Shuttle, would decline, R&D in Science, Aeronautics
and Technology (SAT) would climb 10.3 percent to $8.9 billion. While
the much-delayed International Space Station would receive $1.5 billion
for construction, down from $1.7 billion, most science programs would
receive increases. Space Science funding would climb 13 percent to
$3.4 billion. While canceling the Outer Planets program (including
Pluto and Europa missions), NASA proposes a New Frontiers program
to select promising planetary missions through competitive proposals
and would also make major new investments in new propulsion technology
development to enable future missions. The Biological and Physical
Research program expanded greatly last year to take on all Space Station
research; BPR funding would rise 2.8 percent in FY 2003 to $851 million.
Aero-Space Technology would climb 11.7 percent to $2.9 billion, including
$759 million (up 63 percent) for the Space Launch Initiative to continue
efforts to develop new technologies for space launch to replace the
Space Shuttle. The NASA request would eliminate most R&D earmarks
added on to the budget in FY 2002, resulting in a nearly 50 percent
cut to Academic Programs, a perennial home to congressional earmarks.
- The Department of Energy (DOE) would see its R&D fall
8.0 percent to $8.5 billion from an FY 2002 total inflated with one-time
emergency R&D funds. Funding for the Office of Science would remain
flat at $3.3 billion, but most programs (including the physics programs,
Basic Energy Sciences, and computing research) would receive increases,
offset by cuts in R&D earmarks and a planned reduction in Spallation
Neutron Source construction. While overall funding for Solar and Renewables
R&D would remain level, there would be many program shifts toward
hydrogen, hydropower, and wind research and away from other areas.
In Fossil Energy R&D, there would be steep cuts of up to half
in R&D on natural gas and petroleum technologies, with a continuing
shift in emphasis toward coal R&D. In Energy Conservation, DOE
would abandon the Partnership for a New Generation of Vehicles (PNGV)
to develop high-mileage gas-powered vehicles and would replace it
with FreedomCAR, a collaborative effort with U.S. auto companies to
develop hydrogen-powered fuel cell vehicles. DOE's defense R&D
programs would fall 13.5 percent to $4.0 billion because the FY 2002
total is inflated with one-time counter-terrorism emergency funds
for the defense weapons labs and nonproliferation R&D, and because
funding for construction of the National Ignition Facility would decline
in FY 2003 to $214 million. Many ongoing defense R&D programs
such as advanced scientific computing R&D and stockpile R&D
would receive increases.
- R&D in the U.S. Department of Agriculture (USDA) would
fall $218 million or 9.3 percent to $2.1 billion, mostly because of
steep cuts to R&D earmarks and the loss of one-time FY 2002 emergency
anti-terrorism funds. Funding for competitive research grants in the
National Research Initiative (NRI) would double from $120 million
to $240 million, offsetting steep cuts in earmarked Special Research
Grants from $103 million down to $7 million. The large NRI increase
would partially make up for the Administration's decision to block
a $120 million mandatory competitive research grants program from
spending any money in FY 2003, as in FY 2002. In the intramural Agricultural
Research Service (ARS) programs, Buildings and Facilities funding
would fall from $119 million down to $17 million because FY 2002 emergency
anti-terrorism security upgrades and congressionally earmarked construction
projects would not be renewed; ARS research would fall $30 million
to $1.0 billion, but selected priority research programs would receive
increases, offset by the cancellation of R&D earmarks.
- Department of Commerce R&D programs would decline 1.3
percent in FY 2003 to $1.1 billion. While last year's budget would
have eliminated the Advanced Technology Program (ATP) at the National
Institute of Standards and Technology (NIST), the FY 2003 budget
would keep it alive, though at a greatly reduced level. NIST would
instead redirect funds to intramural R&D in the NIST laboratories,
which would receive a $70 million increase to $402 million, including
funding to make a new Advanced Measurement Laboratory operational.
National Oceanic and Atmospheric Administration (NOAA) R&D
would decline by 2.2 percent or $14 million because of a transfer
of the $62 million (in FY 2002) National Sea Grant program from NOAA
to NSF in FY 2003. Overall, NOAA R&D programs would see increases.
- R&D in the Department of the Interior would fall 4.8
percent to $628 million, but steeper cuts would fall on Interior's
lead science agency, the U.S. Geological Survey (USGS). USGS
R&D would fall 7.0 percent or $41 million to $542 million. Hardest
hit would be programs in Water Resources as a result of reductions
in the National Water Quality Assessment Program and the Toxic Substances
Hydrology Program; these programs provide data and research-based
information to state and federal regulatory agencies such as the EPA.
Included in the Toxics Program is a $10 million transfer to NSF to
initiate a competitive grants process to address water quality issues.
- The Environmental Protection Agency (EPA) R&D budget
would rise 6.2 percent to $650 million in FY 2003. Much of this increase
may be attributed to the $77.5 million set aside for research in homeland
security, which could include developments in dealing with biological
and chemical incidents. The total EPA budget would decline from $8.2
billion in FY 2002 to $7.7 billion in FY 2003, a 5.5 percent drop.
- Department of Transportation (DOT) R&D funding would
fall 16.4 percent to $725 million. These numbers should be viewed
with caution, however, as the transfer of some functions (including
R&D) to the new Transportation Security Administration
has yet to be fully reflected in agency budget documents.
The Budgetary Context for FY 2003: Big Increases
for Defense, Flat Funding for Other Programs, and Deficits are Back
The FY 2002 Bush budget proposes discretionary spending
of $767 billion in FY 2003, a large increase of $49 billion or 6.8
percent over FY 2002 (see Figure 3), following on an even larger increase
in FY 2002, boosted in part by emergency funds to respond to the September
11 terrorist attacks. Much of the emergency spending on homeland security
would continue in FY 2003. Nearly all of the increase, however, would
go to the Department of Defense (DOD, up $45 billion). Two other agencies,
the National Institutes of Health (NIH, up $3.7 billion) and the Department
of Education (up $0.5 billion) would also rank as high priorities and
would receive increases. Just like last year's budget, this would leave
all other discretionary programs with slightly less than FY 2002. Non-NIH
nondefense R&D joins other programs such as foreign aid, immigration,
justice programs, national parks, and environmental protection in a
competition for shrinking resources. Not surprisingly, then, in the
FY 2003 R&D request NIH and DOD R&D programs would receive substantial
increases while other agencies' R&D programs would be flat overall,
with increases balanced out by cuts.
Figure 3. (click on the image to view or download a color,
full-page PDF version of the chart)
Although the discretionary spending proposals look
similar to last year's Bush budget, the overall budgetary context could
not be more different. Last year, budget projections showed $5.6 trillion
in projected surpluses over the next 10 years, with surpluses growing
each year into the future. This allowed President Bush to propose large
tax cuts, which were enacted into law last June. As recently as August,
Democrats and Republicans were united in the commitment to keep the
federal budget in balance even without counting the Social Security
program's surpluses, thus allowing Social Security surpluses to pay
down and possibly even erase the national debt. Although they were bitterly
divided about how to do so, the task seemed possible even as the first
signs of an economic slowdown manifested themselves in falling tax revenues
and the first installments of the June tax cut bill flowed out of the
Treasury. But the September 11 terrorist attacks, a recession now judged
to have begun in March 2001, and the need for emergency funds for war,
homeland security, and disaster relief blew large holes in all previous
budget scenarios.
Figure 4. (click on the image to view or download a color,
full-page PDF version of the chart)
The federal budget is now back in deficit and looks
to stay that way for several years to come, as shown in Figure 4. Thirty
years of deficits gave way to four years of surpluses beginning in FY
1998, but it now seems certain that the federal government will end
FY 2002 in deficit. And although both parties committed to balancing
the budget even without the Social Security surplus (the lower line
in Figure 4), that commitment was fulfilled only in FY 1999 and FY 2000;
the non-Social Security accounts fell into deficit in FY 2001. In a
sign of just how much things have changed over the past year, the FY
2002 non-Social Security deficit is now projected to reach $262 billion.
Instead of paying down the national debt, the federal government is
again adding to it.
President Bush's FY 2003 budget is the first budget
in five years to propose deficit spending for the coming year, even
though it would have been possible to propose a balanced budget. Asserting
that the first priority of the federal government is to provide for
national defense, homeland defense, and economic security, the FY 2003
budget proposals would lead to a unified deficit of $80 billion (and
a non-Social Security deficit of $259 billion). Although the large spending
increases for defense and homeland security within discretionary spending
contribute to the deficit, the FY 2003 budget contains proposals for
another series of tax cuts in an economic stimulus package that would
reduce tax revenues by $77 billion in FY 2003 and far larger amounts
in future years.
Without the controversial economic stimulus proposals,
it would have been relatively easy to erase a remaining $3 billion deficit
to present a balanced budget. The fact that the budget proposes a deficit,
however, gives Congress and the President more flexibility to reduce
taxes or increase spending by whatever amounts they feel are necessary,
without the constraint of forcing the budget to balance. Gone for now,
of course, are any ideas about balancing the budget without the Social
Security surplus.
Outlook for the FY 2003 Budget
Process
The FY 2003 budget now moves to Congress. Congress
is faced with task of approving a FY 2003 budget resolution, Congress'
own blueprint of its budget priorities for FY 2003 and beyond. This
task occurs in a far different Congress than last year. With the Senate
now under Democratic control, the consensus on balancing the budget
shattered, and the temporary partisan truce in the aftermath of September
11 long ended, the process is expected to be lengthy and contentious.
Senate Democrats have already criticized the Bush budget for spending
too little on domestic programs and are looking for ways to block another
round of tax cuts, while on the other side there are conservative Republicans
who criticize the Bush proposals for spending too much and would like
to return to a balanced budget in FY 2003. But with President Bush having
taken the lead to prepare the public for budget deficits for the next
few years, the most likely outcome is that Congress will spend whatever
it feels it needs in order to adequately fund defense, domestic programs,
homeland security, other priorities, and its electoral hopes in the
November 2002 elections. Since the difference between a deficit and
a higher deficit is much more politically palatable than the difference
between a deficit and a surplus, Congress will treat the Bush request
as a base upon which it can add spending for its own priorities. This
outcome became even more likely this week, when the Senate killed the
economic stimulus package of tax cuts, freeing up more resources for
spending.
For federal R&D programs, the only thing certain
is that NIH will eventually receive its requested $27.3 billion, and
perhaps even more. For other agencies, congressional appropriators will
disagree with the President, and at the moment it appears that, like
last year, the President will offer little resistance to Congress adding
in spending for its own priorities on top of the request. In an election
year, the pressures for Congress to add on more money will be even greater
than last year. Combined with the continuing crisis atmosphere on matters
related to war and security and the near-disappearance of balancing
the budget as a constraint, the President's budget will almost certainly
be a floor rather than a ceiling for R&D appropriations action to
come.
Go to Tables
1-4
- February 7, 2002
(More materials on R&D in the
FY 2003 budget, historical data and charts, and more information on
AAAS Report XXVII: Research and Development FY 2003, can be found
on the AAAS R&D Web site at http://www.aaas.org/spp/R&D,
or by calling 202-326-6607. )
AAAS R&D Budget and Policy Program
American Association for the Advancement of Science
1200 New York Ave, NW
Washington, DC 20005
(202) 326-6607
science_policy@aaas.org
http://www.aaas.org/spp/R&D
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