(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 XXX: Research and Development FY 2006,
a comprehensive look at the President's budget for R&D in FY 2006.
More tables and continually updated supplemental materials on R&D
in the FY 2006 budget can be found on the AAAS R&D Web site at www.aaas.org/spp/rd).
On February 7, President
Bush released his proposed budget for fiscal year (FY) 2006. Against
a backdrop of record-breaking federal budget deficits, a continuing
and costly war in Iraq, an expansion of Medicare to pay for prescription
drugs, and expensive proposals to introduce private accounts for Social
Security in the future, the federal investment in research and development
(R&D) would increase only modestly in FY 2006, with cuts to R&D
programs outnumbering increases. In order to restrain the budget deficit,
the President proposes to hold nondefense
discretionary spending flat for the third year in a row; after factoring
in increases for international aid and homeland security, domestic non-security
spending overall would fall in FY 2006 by 1 percent. Defense spending
would increase modestly compared to previous years, but the true picture
is uncertain because the budget excludes funding for the Iraq
war. Federal R&D investment mirrors these overall trends, with a
modest increase in defense development and substantial increases for
homeland security and space exploration R&D, offset by cuts for
most other R&D programs.
R&D in the FY 2006 Budget: Cuts for Most Areas, Gains for Space and Homeland Security
The past few years have
seen record-breaking totals for the federal investment in R&D because
of enormous increases for defense weapons development, the creation
of new homeland security R&D programs, and the now-completed campaign
to double the National Institutes of Health (NIH) budget. The federal
R&D investment hits an all-time high in FY 2005 because of defense
and homeland security increases, but in completing FY 2005 appropriations
last December Congress went along with the President’s proposals to
freeze most domestic discretionary spending at FY 2004 levels. As a
result, the nondefense, non-homeland security
R&D portfolio stagnates in FY 2005, with modest increases in some
areas offset by cuts in others. The FY 2006 budget would continue this
austerity, and extends it to defense R&D. As a result, growth in
the federal R&D portfolio would fail to keep pace with inflation
for the first time in a decade, and most R&D programs would suffer
cuts in real terms. (All figures in this release are preliminary and
will be revised in later AAAS releases with revised agency data.)
- The proposed federal R&D portfolio in FY 2006 is $132.3 billion, 0.6
percent or $733 million above this year’s funding level, far short
of the 2.0 percent increase needed to keep pace with expected inflation
(see Table 1). In real terms, the total federal
R&D portfolio would decline for the first time since 1996. Increases
for homeland security R&D in the Department of Homeland Security
(DHS; up $282 million) and space exploration R&D in National Aeronautics
and Space Administration (NASA; up $537 million) would be greater than
the overall $733 million increase, leaving all other R&D programs
(including defense) with less money next year. Total federal support of research (basic and
applied) would fall 0.6 percent to $54.8 billion, even including
DHS’ and NASA’s expanding research efforts (see Table
2).
- The nondefense R&D investment would increase
0.7 percent to $57.1 billion (see Table 1
and Figure 3). While NASA would continue to receive additional resources
for the International Space Station and moon-and-Mars missions, most
other nondefense R&D agencies would see
their funding decline or fall well short of inflation.
- The National Science Foundation (NSF), after a cut in its budget in 2005,
would see a modest increase of 2.7 percent to $4.2 billion for its R&D
portfolio, but most of the increase would go to R&D facilities.
As a result, the average NSF research grant would shrink for the second
year in a row. NSF’s education funding would fall steeply. The National Institutes of Health (NIH) budget, after doubling in the
five years between 1998 and 2003, would see an increase of just 0.5
percent in FY 2006 to $28.7 billion (see Table
1 and Figure 1). NIH projects a decline in the number of research
project grants for the second year in a row and a decline in the RPG
success rate for the fifth year in a row down to 21 percent.
Figure 1. (click
on the image for PDF)
- Other agencies in the federal R&D portfolio would see cuts in 2006,
consistent with Administration plans to cut nondefense,
non-homeland security spending (see Figure 1 and
Table 1). The Department of Energy’s (DOE) Office of Science
would see its R&D funding fall 3.8 percent to $3.2 billion. Environmental
R&D would decline across the board, including cuts to R&D in
the U.S. Geological Survey (USGS; down 4.6 percent to $516 million),
the National Oceanic and Atmospheric Administration (NOAA; down 11.2
percent to $565 million), and the Environmental Protection Agency (EPA;
down 0.5 percent to $569 million). The U.S. Department of Agriculture
(USDA), enjoying a record R&D portfolio in 2005, would see its R&D
funding decline 15.6 percent to $2.0 billion. Some, but not all, of
the cuts would be due to the proposed elimination of congressional earmarks.
- There would be tough budgetary choices even in agencies with increasing
budgets. At NASA, a 4.9 percent boost in R&D funding to $11.5
billion would still require steep cuts in aeronautics and earth sciences
research and the cancellation of a Hubble servicing mission to pay for
NASA’s ambitious space exploration plans and resumed construction of
the Space Station. Although DOE’s energy R&D
portfolio would climb 11.3 percent to $1.3 billion because of increased
investments in hydrogen, nuclear energy, fuel cells, and coal, DOE would
eliminate R&D on gas and oil technologies and sharply reduce funding
for other areas. R&D at the National Institute of Standards and
Technology (NIST) laboratories would climb 12.6 percent to $357 million,
but the budget proposes to eliminate NIST’s Advanced Technology Program (ATP) and halve the budget
of the Manufacturing Extension Partnership (MEP).
- For the
first time in a decade, defense R&D would be subject to fiscal restraints.
Defense R&D would increase just 0.4 percent or $321 million to $75.2
billion, after multi-billion dollar increases for each of the past
five years (see Table 1 and Figure 2). Department
of Defense (DOD) weapons development would see a modest increase overall,
but there would be a $1.0 billion cut to missile defense. There would
be steep cuts to DOD’s S&T (DOD “6.1” through “6.3” plus medical
research) programs. DOD S&T would plummet 21 percent down to $10.7
billion, falling well short of the goal of 3 percent of the overall
DOD budget at just 2.54 percent. DOE’s weapons-related
R&D would fall 2.6 percent, including cuts to inertial confinement
fusion and advanced computing research.
- Homeland
security appears to be the only R&D priority exempt from tough budgetary
choices. The Department of Homeland Security (DHS) would continue its
dramatic expansion of R&D capabilities with an R&D budget of
$1.5 billion, up $282 million or 23.8 percent
(see Table 1 and Figure 1). Total homeland security-related R&D, including
programs in other departments, would jump 10.7 percent to $4.6 billion
after similar gains over the past several years (see Table
3, bottom).
- The total federal investment in research (basic and applied research) would
fall 0.6 percent to $54.8 billion because of cuts in both defense and
nondefense research (see Table
2). Although NASA (up 11.7 percent to $5.4 billion) and DHS (up
18.6 percent to $511 million) plan large increases in their research
portfolios, other agencies would face steep cuts. DOD support of basic
and applied research would fall 14.2 percent down to $5.5 billion because
of the proposed elimination of earmarks and cuts in core research. USDA,
DOE, Interior, and Commerce support of research would all fall. NIH
would support the majority of the federal research effort for the first
time in FY 2006, but its research portfolio of $27.8 billion would increase
only 1.2 percent, far below increases in previous years. NSF research
funding would increase 1.2 percent to $3.8 billion next year, but would
remain below FY 2004 funding levels.
- Funding for all three multi-agency R&D initiatives would decline
in FY 2006 (see Table 4).
After a nearly $100 million increase this year, funding for the
National Nanotechnology Initiative would fall 2.5 percent to $1.1
billion, well short of amounts authorized in the Nanotechnology R&D
Act signed into law in December 2003. Funding for the Networking and Information Technology R&D initiative would decline
6.8 percent to $2.1 billion. The Climate
Change Science Program (CCSP) would see its funding fall 1.4 percent
to $1.9 billion, primarily because of steep cuts in NASA’s contributions
in space-based observations of the environment.
The FY 2006 R&D Budget in Historical Context
The FY 2006 budget would cut funding for key R&D programs and leave
federal R&D investments in several areas with flat or declining
funding for the last 15 years. As
Figure 2 and Figure 3 show, both the defense and nondefense
R&D investments are at record levels in 2005 (in inflation-adjusted
terms), but both defense and nondefense would
fall behind inflation in FY 2006. For many areas, however, budget cuts
would follow cuts in previous years.
For defense
R&D, Figure 2 shows that nearly all of the increases in the past
few years have been in weapons systems development, “6.4” or higher
in the DOD classification system. DOD’s S&T investments (“6.1” through
“6.3”), comprising basic and applied research and technology development,
barely hit a record high in 2005 after taking 16 years to return to
Cold War funding levels. But the FY 2006 budget proposes to cut these
S&T investments 21 percent in just one year, and reverse four years’
worth of increases. The S&T accounts fund all of DOD’s investments
in research, including key federal contributions to the support of the
physical sciences, engineering, and other research fields.
Figure 2. (click
on the image for PDF)
Figure 3. (click
on the image for PDF)
In nondefense
R&D, the record investment of 2005 is primarily a legacy of the
recently completed campaign to double the NIH budget between 1998 and
2003, as shown in Figure 3. Both NIH and non-NIH R&D funding have
stagnated since then. The FY 2006 budget would be the first time in
24 years that NIH R&D funding would fail to keep pace with inflation.
All the other nondefense R&D funding agencies
collectively have seen their budgets remain flat over the past 15 years,
after factoring out the recent creation of the DHS. For these nondefense
agencies, the FY 2006 budget would be the third year in a row of real
cuts. These non-NIH agencies, combined with DOD’s research, fund nearly
all of the federal investment in the non-biomedical sciences, including
the physical sciences, non-medical life sciences, environmental sciences,
engineering, mathematics, computer sciences, and social sciences. Federal
support for these disciplines has remained stagnant for 15 years, and
would decline further in FY 2006.
Highlights of the Major R&D Funding Agencies
(Complete coverage of the
major R&D funding agencies will be available in the forthcoming
AAAS Report XXIX: R&D FY 2006 and on
the AAAS R&D web site in agency updates.)
- The National Institutes of Health (NIH) would
receive $28.7 billion for its total budget in FY 2006, an increase of
$146 million or 0.5 percent. NIH R&D would rise 0.5 percent to $27.9
billion, failing to keep pace with economy-wide inflation for the first
time in 24 years. NIH has already fallen behind its own calculations
of biomedical research inflation, estimated at 3.3 percent this year
and 3.2 percent in 2006. Most NIH institutes would receive increases
in a narrow range between 0.3 and 0.7 percent. The National Institute
of Allergy and Infectious Diseases (NIAID), home to NIH’s
biodefense effort, would do only slightly
better with a 1.3 percent boost to $4.5 billion. The largest percentage
increase would go to the Office of the Director (OD; up 7.6 percent)
to boost OD funding for clinical research, high-risk basic research,
and collaborative research in the NIH Roadmap for Biomedical Research.
The Roadmap would receive $333 million in FY 2006 (up 41 percent), with
$250 million coming from institute budgets. NIH projects a decline in
the number of Research Project Grants (RPGs) for the second year in a row, no inflation adjustment
for most new or continuing grants, and a decline in the RPG success
rate for the fifth year in a row down to 21 percent. Biodefense
research grants would be a bright spot with an 8 percent boost in FY
2006. [Roadmap figure corrected 2/18 from '$333 billion' to $333 million'.]
- The Department of Defense (DOD) would see
its R&D budget grow only slightly by 0.6 percent to $70.8 billion,
an increase of $417 million compared to multi-billion dollar increases
the past five years. DOD weapons development would see a modest increase
overall, but Missile Defense Agency (MDA) funding for the development
of missile defense systems would fall $1 billion or 11.5 percent to
$7.8 billion. On the research side, there would be steep cuts to DOD’s
future-oriented investments: “Science and Technology” (S&T), which
includes research, medical research, and technology development, would
fall 21 percent to $10.7 billion (see Table 1
and Figure 2); at 2.54 percent of the regular DOD budget, this falls
far short of the Pentagon-endorsed target of 3 percent and the 3.39
percent ratio Congress appropriated in 2005. Within S&T, basic research
(“6.1”) funding would fall 12.9 percent, while applied research (“6.2”)
would fall 14.7 percent. The Defense Advanced Research Projects Agency
(DARPA) would be a lone winner among research-oriented programs with
a request of $3.1 billion, a 3.6 percent increase.
- The National Science Foundation (NSF) budget,
after declining in 2005, would receive a modest increase of 2.4 percent
to $5.6 billion, far short of the $8.5 billion authorized in law. NSF
R&D would increase 2.7 percent to $4.2 billion (see Table
1 and Figure 1), but most of the increase would go to R&D facilities
funding. Most research directorates would receive modest increases of
about 1 percent, but coming after 2005 cuts this would leave NSF research
programs at or below 2004 funding levels. NSF’s education and training
programs would suffer steep cuts for the second year in a row, especially
pre-college education programs. The Major Research Equipment and Facilities
Construction account would enjoy a sizeable increase, going from $174
million to $250 million despite the lack of new starts.
- The National Aeronautics and Space Administration (NASA)
continues to face daunting challenges,
even as it receives favored treatment in the federal budget. The
total NASA budget of $16.5 billion would be a 1.6 percent increase after
a much larger boost in 2005, but NASA’s R&D would increase 4.9 percent
to $11.5 billion in FY 2006 because of money freed up by the Space Shuttle’s
expected return to flight in 2005. While the agency would receive additional
resources for its ambitious plans to finish construction of the International
Space Station, explore the solar system, and develop the technologies
needed for planned moon and Mars missions, the FY 2006 request
would still require tough budget choices. NASA would cancel a previously
proposed robotic servicing mission for the Hubble Space Telescope and
continue to rule out a human servicing mission. The FY 2006 budget also
proposes to cut aeronautics research by 5.9 percent down to $852 million,
and proposes steep cuts in environmental, biological, and physical sciences
research in order to shift resources toward solar system exploration
and R&D on moon and Mars mission technologies. There would be large
boosts for robotic moon and Mars exploration (up 17 percent to $858
million) and development of a Crew Exploration Vehicle within a new
Constellation Systems program (up 113 percent to $1.1 billion). The
International Space Station would receive $1.9 billion, up 10.8 percent,
in anticipation of the Space Shuttle’s return to flight.
- The Department of Energy (DOE) would see its
R&D funding decline 1.2 percent to $8.5 billion in FY 2006, after
a similar cut in 2005. On the nondefense side, R&D funding for the Office of Science
(OS) would decline 3.8 percent to $3.2 billion, leaving OS R&D funding
at levels not seen since 2000. The cuts would be spread across a broad
portfolio of programs in physics, fusion, biology, and energy sciences.
Operation times would be reduced at scientific user facilities supported
by OS. DOE’s energy-related R&D would climb 11.3 percent to $1.3
billion because of increased investments in hydrogen, nuclear energy,
fuel cells, and coal. DOE would invest $257 million (up from $224 million)
in a Hydrogen Fuel Initiative to develop technologies for hydrogen-powered
cars. But DOE would eliminate R&D on gas and oil technologies and
sharply reduce funding for several renewable energy technologies. DOE’s defense R&D funding would fall 2.6 percent down
to $4.0 billion, including cuts to advanced scientific computing (down
5 percent to $660 million) and inertial confinement fusion (down 16
percent to $460 million). Although Congress eliminated the controversial
Robust Nuclear Earth Penetrator program in
FY 2005, DOE would try again in FY 2006 with a request of $4 million,
supplemented by a related $4.5 million request in DOD.
- The Department of Homeland Security (DHS) appears
immune from budgetary pressures affecting the other agencies. DHS is
once again the big winner in the R&D budget with a proposed 23.8
percent increase to $1.5 billion. The FY 2006 budget would consolidate
the department’s R&D in the Directorate of Science and Technology.
Within the S&T Directorate, the largest boost would come from the
establishment of a Domestic Nuclear Detection Office (DNDO) funded at
$227 million in FY 2006 to develop technologies to counter radiological
and nuclear threats. DHS would also boost funding to $110 million (up
$49 million) for R&D to counter the threat of shoulder-fired anti-aircraft
missiles. There would also be $20 million in new funds to develop a
Low Volatility Agent Warning System against hard-to-detect chemical
threats.
- The U.S. Department of Agriculture (USDA), enjoying
a record R&D portfolio in 2005, would see its R&D funding decline
15.6 percent in 2006 down to $2.0 billion. Most of the decline is due
to the proposed elimination of R&D earmarks. USDA would dramatically
restructure its extramural research portfolio: the National Research
Initiative (NRI) of competitively awarded research grants would increase
$70 million to a record $250 million, while earmarked Special Research
Grants would plummet from $120 million down to $3 million. Hatch Act
formula funding for land-grant colleges would be cut in half to $89
million, but USDA would create a new $75 million competitive research
grants program for these institutions. USDA intramural research would
decline 10 percent, but the proposed elimination of earmarks would make
room for an increase in homeland security-related agricultural research.
There would be $59 million to complete the construction of the National
Centers for Animal Health in Ames, Iowa.
- Once
again, the Bush Administration proposes to eliminate the Advanced Technology
Program (ATP) at the Department
of Commerce. The ATP has a budget of $140 million in FY 2005.
The budget would also reduce funding for the non-R&D Hollings Manufacturing
Extension Partnership by 57 percent down to $47 million. The savings
would allow for a 12.6 percent boost for intramural research at the
National Institute of Standards
and Technology (NIST) laboratories and a doubling of Construction
of Research Facilities (CRF) investments in NIST laboratory facilities.
National Oceanic and Atmospheric
Administration (NOAA) R&D would decline by 11.2 percent to $565
million, mostly from the elimination of FY 2005 congressional earmarks.
Most NOAA research programs would stay at or slightly below current
funding levels.
- The Department of Veterans Affairs (VA) once again
proposes to reorganize its budget to fully report all costs associated
with its R&D portfolio, including support and personnel costs. VA
federal R&D would be $786 million in FY 2006, up slightly by 0.3
percent, but planned increases in funding from other sources would result
in an increase in the overall VA R&D portfolio to $1.7 billion.
- R&D
in the Department of the Interior
would fall 5.4 percent to $582 million, with a similar 4.6 percent
cut to $516 million for R&D in Interior’s lead science agency, the
U.S. Geological Survey (USGS). The cuts would
be concentrated in USGS’ mineral resources and water resources R&D,
with modest increases or flat funding for other R&D priorities.
- The Environmental Protection Agency (EPA) overall
budget would fall a steep 6 percent down to $7.6 billion in FY 2006.
EPA R&D would fare better with a 0.5 percent cut to $569 million.
The proposed elimination of R&D earmarks would allow for modest
increases to core EPA R&D programs in areas such as global change,
particulate matter, drinking water, and water quality.
- Department of Transportation (DOT)
R&D funding would rise 8.0 percent to $808 million. There would
be a big boost in highway R&D, due in part to a perennial proposal
to shift some resources away from state highway grants to highway research;
similar proposals have been rejected by Congress in past years. R&D
in the Federal Aviation Administration (FAA) would decline 11.4 percent
to $233 million.
The Budgetary Context for FY 2006: Tough Times for Domestic
Programs
The FY 2006 Bush budget
proposes discretionary spending of $840 billion
in FY 2006, a 2.1 percent increase over FY 2005. But regular defense
spending would get a 4.2 percent boost, leaving nondefense
discretionary spending exactly even at $402 billion. Factoring out increases
for homeland security and international aid would leave other domestic
programs collectively with a nearly 1 percent cut, after similar austerity
in the just-completed 2005 budget.
The FY 2006 budget
is as notable for what is left out as for what is included. The budget
allots nothing for future war costs in Iraq
and Afghanistan.
The budget also excludes any costs for the transition to Social Security
private accounts beginning in 2009, although the transition would require
borrowing $750 billion or so just in the first five years. The budget
also excludes the costs of making expiring tax cuts permanent or extending
fixes in the Alternative Minimum Tax. All were high priorities for the
Bush Administration in the 2005 State of the Union address. Excluding
these costs allows the FY 2006 budget to project a record-breaking $427
billion FY 2005 deficit shrinking in half to $207 billion in FY 2010,
but including these costs would see future deficits matching or exceeding
current levels into the future.
Figure 4. (click
on the image for PDF)
For discretionary programs,
however, the budget includes proposals for a future of shrinking resources.
Figure 4 shows that over the past several years, there have been dramatic
increases in both defense and nondefense discretionary
spending after nearly a decade of relative restraint in the 1990s. On
the defense side, there have been large increases in the regular DOD
budget topped off in the last four years by Iraq
and Afghanistan
costs. The FY 2006 budget proposes a sharp drop in defense spending
beginning in FY 2006 by assuming war spending will end this year. On
the nondefense side, there have been large increases in homeland
security spending and reconstruction support for Iraq and Afghanistan
over the past four years along with increases in domestic spending until
2003; the FY 2006 budget assumes that non-homeland security domestic
spending will be frozen at the FY 2004 level through FY 2010, resulting
in dramatic erosions in purchasing power after inflation.
While discretionary spending would shrink, spending on entitlement programs
would increase dramatically. The real growth in federal spending
has been in entitlement and other mandatory programs, now two-thirds
of the federal budget. A prescription-drug benefit for Medicare begins
in 2006, with recent estimates pegging this new benefit’s costs at $720
billion over its first decade. The current Medicare entitlement program
also continues to grow far faster than inflation. Although details of
Social Security reform are not outlined in the budget, President Bush’s
proposals for introducing private accounts to the program would require
trillions of dollars in additional borrowing to finance transition costs
beginning in 2009. In addition, mandatory payments of interest on the
national debt would also climb because the national debt is growing
rapidly from the accumulation of record annual deficits.
These broader trends have
a dramatic impact on the federal R&D portfolio. The trends in Figure
4 for overall discretionary spending mirror the trends in Figure 2 and
Figure 3 for federal R&D, with steady growth to 2003 giving away
to restraint in 2004 and 2005 and further restraint in 2006. Federal
R&D investments have always tracked discretionary spending. Thus,
the proposals to trim discretionary spending over the next five years
could result in similar cuts to most agencies in the federal R&D
portfolio.
- February 10,
2005
(More materials on R&D in the FY 2006 budget, historical data and
charts, and more information on AAAS Report XXX: Research and Development
FY 2006, can be found on the AAAS R&D
Web site at www.aaas.org/spp/rd. The information in this preliminary
analysis will be continually updated with revised agency data, and revisions.)
