(All figures in this analysis are revised estimates
of R&D in the FY 2006 budget, different from the figures in the
preliminary analysis of February 10. The figures
were revised again on March 22. 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 barely grow 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 flat funding for defense R&D and 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, Modest 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 hit an all-time high this year 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
this year, with modest increases in some areas offset by cuts in others.
The FY 2006 budget for next year would continue this austerity, and
extend 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.
(Figures in this analysis have been revised since the February
10 preliminary analysis based on revised agency data.)
- The proposed federal R&D portfolio in FY 2006 is $132.3 billion, just
barely an increase of 0.1 percent or $84 million above this year,
and 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 space exploration R&D in the National
Aeronautics and Space Administration (NASA; up $508 million) would far
exceed the $84 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 1.4 percent
to $55.2 billion, especially after factoring out NASA’s expanding research
efforts (see Table 2).
- The nondefense R&D investment would barely increase 0.2 percent to
$56.9 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, nearly all other
nondefense R&D agencies would see their funding decline.
- The National Science Foundation (NSF), after a cut in its budget in 2005,
would see a modest increase of 2.8 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 research
project grants (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 4.5 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 4.8 percent to $515 million),
the National Oceanic and Atmospheric Administration (NOAA; down 11.2
percent to $565 million), and
the Environmental Protection Agency (EPA; down 0.7 percent to $568 million).
The U.S. Department of Agriculture (USDA), enjoying a record R&D
portfolio in 2005, would see its R&D funding decline 14.6 percent
to $2.1 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 4.6 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
8.4 percent to $1.2 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 12.7 percent to $357 million, but the budget
proposes to eliminate NIST’s Advanced Technology Program (ATP) and halve
the budget of the Hollings Manufacturing Extension Partnership (MEP).
- For the
first time in a decade, defense R&D would be subject to fiscal restraints.
Defense R&D would fall slightly by $16 million to $75.4 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 far 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.
- Congress will tackle the FY 2006 appropriations process in a newly reorganized
committee structure (see Table 3).
Both the House and the Senate recently approved separate restructurings
of their Appropriations Committees; instead of 13 subcommittees in each
chamber writing 13 appropriations bills, the House shuffled subcommittee
jurisdictions to consolidate into 10 subcommittees. The Senate chose
12 subcommittees with jurisdictions similar to, but not identical to,
the House. The result could be an appropriations process more protracted
and confusing than normal. The federal R&D portfolio would be divided
among all 10 House appropriations bills, and 10 of the 12 Senate bills
(see Table 3). As before, four appropriations
bills would fund 95 percent of all federal R&D, and the major R&D
funding agencies of DOD, NIH, NASA, and DOE would continue to be funded
in separate bills. NASA and NSF would move together from the eliminated
VA-HUD bill to a Commerce, Justice, and Science bill in the Senate (Science,
Commerce, and Justice in the House) to join the Commerce R&D portfolio,
while EPA would move from VA-HUD to the Interior bill to join the Department
of the Interior.
- Federal homeland security-related R&D would total $4.4 billion in
FY 2006, a gain of $208 million or 4.9 percent that represents a
leveling off of the federal investment after dramatic recent increases
(see Table 4). The majority of the multi-agency
portfolio would remain outside the Department of Homeland Security (DHS),
with the largest part of funding coming from the National Institutes
of Health (NIH) for its biodefense research portfolio. NIH’s portfolio,
mostly in the National Institute of Allergy and Infectious Diseases
(NIAID), would total $1.8 billion in FY 2006, up 0.4 percent but with
room for an 8 percent increase for biodefense research because of a
drop in laboratory construction funding. After annual increases greater
than 20 percent in the first few years of its existence, growth in the
DHS R&D portfolio would level off with an FY 2006 request of $1.3
billion, up $44 million or 3.6 percent. (Click here
for an analysis of the homeland security-related R&D portfolio.)
- The total federal investment in research (basic and applied research) would
fall 1.4 percent to $55.2 billion because of cuts in both defense and
nondefense research (see Table 2).
Although NASA (up 11.6 percent to $5.4 billion) plans a large increase
in its research portfolio, other agencies would face steep cuts. DOD
support of basic and applied research would fall 18.1 percent down to
$5.6 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 $3.7
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 5).
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 or
near 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.
In nondefense R&D, the record
investments of 2004 and 2005 are 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 2006.
Figure 2. (click
on the image for PDF)
Figure 3. (click
on the image for PDF)
Highlights of the Major R&D Funding Agencies
(Complete coverage of the
major R&D funding agencies is now available on the AAAS
R&D web site in individual agency updates, and also in the forthcoming
AAAS Report XXX: R&D FY 2006.)
- 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 to $1.7 billion.
- The Department of Defense (DOD), the largest
federal sponsor of R&D, would see its R&D budget grow only slightly
by 0.1 percent to $71.0 billion in FY 2006,
an increase of just $80 million compared to multi-billion dollar
increases the past five years. On the research side, there would be
steep cuts. DOD “Science and Technology” (S&T),
which includes research, medical research, and early technology development,
would plummet 21.3 percent down to $10.7 billion (see Table 1); at 2.54
percent of the regular DOD budget, this would fall far short of the
Pentagon-endorsed target of 3 percent and the 3.39 percent ratio Congress
appropriated in 2005. Within S&T, DOD funding for basic and applied
research would both decline steeply. Basic research (“6.1”) would fall
12.9 percent to $1.3 billion, while applied research (“6.2”) would fall
14.7 percent to $4.1 billion in FY 2006, after large increases for both
in this year’s budget. DOD weapons development would see a modest increase
overall, but there would be some steep cuts. Missile Defense Agency (MDA) funding
for the development, testing, and evaluation of missile defenses would
fall $1 billion to $7.8 billion. Including procurement funds and R&D
in other DOD agencies, the total missile defense investment would be
$8.8 billion, down from $9.9 billion this year. The Defense Advanced
Research Projects Agency (DARPA) would be a winner among research-oriented
programs, with a request of $3.1 billion in FY 2006, 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 2.8 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 the increases would still leave most 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 small increases for
the research directorates would squeeze NSF funding of competitively
awarded research grants. The
total number of research grants would increase to 6,310 in FY 2006,
but would remain below 2004 numbers. Competition for grants would remain
difficult: NSF expects to make awards to just one in five applications.
- 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 4.6 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 1.9 percent or $161 million
to $8.5 billion in FY 2006, after a similar cut in 2005. R&D funding
for the Office of Science (OS) would decline 4.5 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 at OS scientific user facilities
would be reduced. Energy-related R&D would be a winner with an 8.4
percent gain to $1.2 billion because of proposed increases for hydrogen,
nuclear energy, fuel cells, and coal R&D. 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 investments would fall 2.6
percent to $4.0 billion, including cuts to advanced scientific computing
and inertial confinement fusion. 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.
- Recent growth
in Department of Homeland
Security (DHS) R&D funding would slow in FY 2006, but would
still gain ground in an era of tight budgets. DHS R&D would increase
$44 million or 3.6 percent to $1.3 billion, after increases of more
than $200 million in each of the past three years. The top priorities
in the DHS R&D portfolio would be $246 million for radiological
and nuclear countermeasures (double this year’s investment) to establish
a Domestic Nuclear Detection Office (DNDO), $102 million for chemical
countermeasures (up 93 percent) and $110 million for R&D to counter
portable anti-aircraft missiles (up 80 percent). Large increases for
the top priorities would be offset by cuts in other areas of the DHS
R&D portfolio, including explosives countermeasures (down a quarter
to $15 million), threat and vulnerability assessments (down 29 percent
to $47 million), standards development (down 11 percent to $36 million),
and rapid prototyping (down two-thirds to $21 million. The largest part
of the DHS R&D portfolio would continue to be biological countermeasures
with an investment of $362 million, down slightly. The budget proposes
to finish consolidating all DHS R&D into the Directorate of Science
and Technology (S&T).
- The U.S. Department of Agriculture (USDA), enjoying
a record R&D portfolio in 2005, would see its R&D funding decline
14.6 percent in 2006 down to $2.1 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 9.6 percent, but the proposed elimination of earmarks would
make room for a nearly three-fold increase in homeland security-related
research.
- 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 to $47 million. The savings would
allow for a 12.7 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 earmarks. Most NOAA research programs would
stay at or slightly above 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 5.5 percent to $581 million, with a similar 4.8 percent
cut to $515 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 5.7 percent down to $7.6 billion in FY 2006.
EPA R&D would fare better with a 0.7 percent cut to $568 million.
Homeland security-related R&D would be the big winner in the R&D
portfolio, with large increases for decontamination research and drinking
water security. 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 8.5 percent to $807 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, mirroring similar cuts to aeronautics research in NASA
and aviation security R&D in DHS.
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.
For discretionary
programs, 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.
Figure 4. (click
on the image for PDF)
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.
- March 9, 2005
(revised March 22)
(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.)
