American Association for the Advancement of Science

AAAS Preliminary Analysis of R&D in the FY 2007 Budget
February 8, 2006 -

FY 2007 Budget Proposes Gains in Defense, Space,
and Physical Sciences R&D, Cuts in Other Programs

AAAS Preliminary Analysis of R&D in the FY 2007 Budget

Go to:

-R&D in the FY 2007 Budget

-The FY 2007 R&D Budget in Historical Context

-Highlights of the Major R&D Funding Agencies

-Budget Context and Outlook

-Table 1. R&D in the FY 2007 Budget by Agency

-Table 2. Research in the FY 2007 Budget

-Table 3. Major Functional Categories of R&D

- Table 4. Homeland Security R&D

- Table 5. Interagency Science and Technology Initiatives

PDF version of this document

Detailed agency updates (available soon):

Department of Agriculture

Department of Commerce

Department of Defense

Department of Energy

Department of Homeland Security

Department of the Interior

Department of Transportation

Department of Veterans Affairs

Environmental Protection Agency

National Aeronautics and Space Administration

National Institutes of Health and HHS

National Science Foundation

Supplemental Tables and Full-Color Charts (PDF) (NOTE: most of the charts and tables have been revised since the February 8 release of this analysis)


-Table. Total R&D by Agency (REVISED 2/06)

-Table. Basic Research by Agency (REVISED 2/06)

-Table. Applied Research by Agency (REVISED 2/06)

-Table. Research in the FY 2007 Budget (REVISED 2/06)

-Table. Development by Agency (REVISED 2/06)

-Table. Conduct of R&D by Agency (REVISED 2/06)

-Table. R&D Facilities and Capital Equipment by Agency (REVISED 2/06)

-Historical Table 1. R&D by Agency, 1976-2007 (REVISED 2/06)

-Historical Table 2. R&D by Agency, 1976-2007 in Constant Dollars (REVISED 2/06)

-Chart. Trends in Federal R&D, 1976-2007(REVISED 2/06) - Data Table

-Chart. Trends in Federal R&D by character of work, 1976-2007(REVISED 2/06)

- Chart. Trends in Federal R&D as % of GDP, FY 1976-2007


-Chart. Selected Trends in Nondefense R&D, 1976-2007 (REVISED 2/06)

-Chart. Trends in Research by Agency, 1976-2007 (REVISED 2/06) - Data Table

-Chart. Trends in Basic Research, 1976-2007 (REVISED 2/06)- Data Table

-Chart. Trends in Defense R&D, 1976-2007 (REVISED 2/06) - Data Table

-Chart. Trends in DOD S&T, 1994-2007 (REVISED 2/06) - Data Table

-Chart. Trends in Federal R&D, FY 1995-2007 (DOD, NIH, NSF, DOE, NASA, USDA) (REVISED 2/06)

-Chart. Trends in Federal R&D, FY 1995-2007 (DOC, DOI, DOT, EPA) (REVISED 2/06)

-Chart. Trends in DOE Office of Science, 1987-2007 (REVISED 2/06) - Data Table

-Chart. Defense and Nondefense R&D, 1949-2007 (2/06) - Data Table

-Chart. Nondefense R&D by Function, 1953-2007 (2/06) - Data Table

 

(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 XXXI: Research and Development FY 2007, a comprehensive look at the President's budget for R&D in FY 2007. More tables and continually updated supplemental materials on R&D in the FY 2007 budget can be found on the AAAS R&D Web site at www.aaas.org/spp/rd).

On February 6, President Bush released his proposed budget for fiscal year (FY) 2007. The new budget proposes substantial increases for key physical sciences and engineering programs as part of an "American Competitiveness Initiative" that was first previewed in the President's State of the Union address as a response to a growing wave of concern about the state of U.S. innovation. The three favored agencies of the National Science Foundation (NSF), the Department of Energy (DOE) Office of Science, and the National Institute of Standards and Technology (NIST) laboratories in Commerce would receive substantial budget increases after years of flat or declining funding. DOE also benefits from the President’s “American Energy Initiative” with large increases in its energy R&D portfolio.

The overall federal investment in research and development (R&D) would increase to $137 billion in 2007, but in a repeat of past budgets the continuing Administration priorities of weapons development and space vehicles development would take up the entire increase and more, leaving declining funding for the remainder of the R&D portfolio.

The federal investment in basic and applied research (excluding development and R&D facilities) would decline 3.4 percent to $54.7 billion, meaning increases for physical sciences and related research in DOE, NSF, and NIST would be more than offset by cuts in other agencies’ research. The National Institutes of Health (NIH) budget would be flat for the second year in a row and would fund less than 1 out of every 5 grant applications; the National Aeronautics and Space Administration (NASA), despite being a major sponsor of physical sciences research, would see its research funding fall to offset a big increase in development of new space vehicles.

The large proposed increases for physical sciences and engineering research are not enough to keep the federal investment in basic and applied research (excluding development) from declining for the third year in a row after peaking in 2004.

R&D in the FY 2007 Budget: Cuts for Most Areas, Gains for Weapons, Space Vehicles, Energy, and the Physical Sciences

On February 6, President Bush released his proposed budget for fiscal year (FY) 2007 and offered the same themes as in previous years: big increases for defense and homeland security, trims in some entitlement programs, proposed extensions of expiring tax cuts, and a promise to reduce the budget deficit by cutting domestic discretionary spending. But the President also announced two major initiatives in his State of the Union address to boost federal investments in physical sciences research and energy R&D. The FY 2007 budget follows through with large increases for key physical sciences funding agencies and the Department of Energy’s (DOE) energy R&D portfolio, but otherwise the budget request is similar to past requests: federal R&D would increase slightly less than projected inflation, the entire increase and more would go toward the development of new weapons and new human space vehicles, and increases in the remainder of the federal R&D portfolio would be offset by cuts in other areas. The large increases for the DOE Office of Science, NSF, and the NIST laboratories in the American Competitiveness Initiative, the increases for NASA development geared to returning humans to the moon, and increases for DOE energy R&D to pursue alternatives to imported oil all enable nondefense R&D to increase 1.7 percent, in contrast to the 0.5 percent requested cut for all domestic programs in the FY 2007 budget. But within a declining domestic budget, there would be stark contrasts between priority programs and everything else: the above priorities would receive large increases, while everything else in the federal R&D portfolio would face steep cuts (see Figure 1), with only biomedical research flat in the middle. (All figures in this release are preliminary and will be revised in later AAAS releases with revised agency data.)
 
Figure 1.
(click on the image for PDF)

- The proposed federal R&D portfolio in FY 2007 is $137.0 billion, 1.9 percent or $2.6 billion above this year’s funding level, just short of the 2.2 percent increase needed to keep pace with expected inflation (see Table 1 and Figure 2). In real terms, the total federal R&D portfolio would decline for the first time since 1996 after flattening out the last few years. Development would be the clear winner: increases for weapons development in the Department of Defense (DOD; up $4.2 billion) and space vehicles development in the National Aeronautics and Space Administration (NASA; up $851 million) would be far greater than the overall $2.6 billion increase, leaving all other R&D programs collectively with less money next year. Development funding would hit a new high of $78.0 billion (up 6.2 percent). Total federal support of research (basic and applied) would fall 3.4 percent to $54.7 billion, even with large proposed increases for physical sciences and related research in NSF, DOE’s Office of Science, and NIST (see Table 2 and Figure 2). In real terms, the federal research portfolio would fall nearly 6 percent.

 - The nondefense R&D investment would increase 1.7 percent to $58.5 billion, far better than the 0.5 percent cut requested for all nondefense discretionary programs (see Table 1 and Figure 3). Boosts for physical sciences research, energy R&D, and space vehicles development help to offset requested cuts in other nondefense R&D programs, but even increases in these areas are not enough to keep the nondefense portfolio from falling behind expected inflation. Four nondefense R&D agencies would do well in the 2007 budget request (see Figure 1): there would be significant increases for R&D in DOE’s Office of Science (up 14 percent to $3.8 billion), NIST intramural research (up 18 percent to $383 million), and NSF (up 8.3 percent to $4.5 billion) because of the American Competitiveness Initiative; a substantial 8.1 percent increase for DOE’s energy R&D investments to $1.4 billion as part of  the American Energy Initiative; and a 7.5 percent increase to $12.2 billion for NASA R&D to develop a Crew Exploration Vehicle and Crew Launch Vehicle.


Figure 2.
(click on the image for PDF)

- But other nondefense R&D agencies not linked to the high priority areas would see flat funding or steep cuts (see Figure 1). Many but not all of the cuts are due to the proposed elimination of congressional earmarks. The NIH budget, after declining slightly in 2006 for the first time in 36 years, would remain flat at $28.6 billion. All but two NIH institutes and centers would see their budgets fall for the second year in a row. Other R&D agencies would face steep cuts: the Environmental Protection Agency’s (R&D) portfolio would fall 7.2 percent to $557 million, while Commerce’s National Oceanic and Atmospheric Administration (NOAA) would see its R&D funding decline 6.3 percent to $578 million. R&D funding in the U.S. Geological Survey (USGS) and the U.S. Department of Agriculture (USDA; down 16.5 percent) would also fall. Even the Department of Homeland Security (DHS), a past favorite, would see its R&D portfolio decline 5.6 percent to $1.3 billion within a rising overall DHS budget.

- There would be tough budgetary choices even in agencies with increasing budgets. At NASA, an $851 million boost in R&D funding to $12.2 billion would be far less than the $1.3 billion boost to $3.1 billion for the Constellation Systems program, which is charged with developing the next generation of human space vehicle to replace the Space Shuttle and to enable humans to return to the moon. Among the casualties of the shift in resources are NASA’s aeronautics research program, falling 18 percent to $724 million, and what remains of its life sciences program, proposed for a 56 percent cut after a 30 percent cut in 2006. Other NASA research programs would also decline. R&D at the National Institute of Standards and Technology (NIST) laboratories would climb 18 percent to $383 million, but in a repeat of past years the budget proposes to eliminate NIST’s Advanced Technology Program (ATP) and halve the budget of the Manufacturing Extension Partnership (MEP). While NSF’s research directorates would do well, its Education and Human Resources directorate would barely increase, to a level 20 percent below the 2004 budget in real terms. Substantial increases for DOD development would be offset by steep cuts in DOD research. Only DOE appears immune from tradeoffs: the large increases proposed for energy and science R&D are possible because of a nearly $1 billion expected drop in DOE’s environmental costs as several cleanup projects reach completion.

- Defense R&D continues to do relatively well, in a budget that sustains overall defense spending at record funding levels. Total defense R&D would increase 2.1 percent to $78.4 billion, falling just short of matching inflation for the first time since 1996 (see Table 1). Department of Defense (DOD) weapons systems development would increase dramatically by 7 percent to a new high of $62.9 billion (see Figure 1), but once again there would be steep cuts in DOD’s S&T (DOD “6.1” through “6.3” plus medical research) programs. DOD S&T would plummet 18.6 percent down to $11.2 billion, with cuts in all three categories of basic research, applied research, and technology development. DOE’s weapons-related R&D would rise 0.6 percent to $4.0 billion after a cut in 2006. 

 - The total federal research investment (basic and applied research, excluding development and facilities funding) would total $54.7 billion in 2007, down 3.4 percent from the current year (see Table 2 and Figure 2). Although NSF (up 7.1 percent), DOE’s Office of Science (up 11 percent), and NIST (up 11 percent) would do very well for their research portfolios in the 2007 budget, there would be steep cuts in other agencies. Some of the cuts would be from agencies shifting funds out of research and into development, such as DOD (research down 16 percent), the Department of Homeland Security (DHS, down 16.5 percent), and NASA (down 18 percent). Other cuts would result from the proposed elimination of research earmarks, such as USDA (down 13 percent), EPA (7 percent), DOD, and NOAA (down 2.4 percent). NIH, the largest federal sponsor of research, would see its research funding remain flat at $27.7 billion, a 2.2 percent loss after adjusting for inflation.

 - The federal investment in basic research would do better than research overall with a modest 1.2 percent increase to $28.2 billion (see Table 2). As with all research, cuts in DOD, NASA, USDA, and DHS support of basic research would partially offset big proposed gains in DOE’s Office of Science, NIST, and NSF.

 - The Administration priorities of defense development, space exploration, energy, and basic physical sciences research show up clearly in the federal R&D portfolio by mission (see Table 3). The priority missions would all receive large increases, while R&D for national missions would fall sharply. Space-related R&D would gain 10.1 percent to $11.5 billion, though entirely from gains in development funding of new space vehicles instead of the broader space R&D portfolio. Boosts to DOE Office of Science and NSF R&D make up the 10.9 percent gain for general science R&D to $8.3 billion, while a new commitment to renewables, nuclear, hydrogen, and coal R&D are responsible for the proposed 8.3 percent increase in energy R&D to $1.5 billion. Defense R&D continues to be a high priority with a 2.1 percent boost to $78.4 billion. But R&D for other national missions including agriculture (down 19 percent), transportation (down 22 percent), and the environment (down 7 percent) would all fall in a tight domestic budget. Even health R&D, usually on the positive side, would fall for the second year in a row down to $29.7 billion after decades of steady gains.

- Federal homeland security-related R&D would total $5.2 billion in FY 2007, a small gain of $24 million or 0.5 percent that would be a further leveling off of the federal investment after dramatic increases in the aftermath of the 2001 terrorist attacks (see Table 4; the totals are significantly higher than in previous years because DOD recently expanded its reporting of homeland security-related spending). The majority of the multi-agency portfolio would remain outside the Department of Homeland Security (DHS), with the largest part in 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 $2.0 billion in FY 2006, up 6.1 percent despite a flat overall NIH budget. After annual increases greater than 20 percent in the first few years of its existence, the DHS R&D portfolio would fall for the first time with a 5.6 percent proposed cut to $1.3 billion.

 - The federal government continues to invest billions of dollars in multi-agency R&D initiatives that cut across agency missions (see Table 5). After an increase in 2006, funding for the National Nanotechnology Initiative would fall 1.8 percent to $1.3 billion, primarily because DOD would remove earmarked 2006 nanotechnology projects from its 2007 request. Funding for the Networking and Information Technology R&D initiative would increase 2.4 percent to $3.1 billion because of the American Competitiveness Initiative, which encompasses increasing support for computer sciences and other IT research. DOE would boost its IT support 23 percent to $473 million, led by a 36 percent requested increase for the Advanced Scientific Computing Research (ASCR) program at the Office of Science. At NSF, not only would the Computer and Information Science and Engineering (CISE) directorate receive a 6 percent boost but the new Office of Cyberinfrastructure, a CISE offshoot, would see its budget climb 43.5 percent. Climate Change Science Program (CCSP) funding would barely increase by 0.2 percent to $1.7 billion, after a steep cut in 2006 due to falling NASA funding for space-based observations of the environment.

 The FY 2007 R&D Budget in Historical Context: Another Year of Decline


Figure 3.
(click on the image for PDF)

Although high-priority investments in weapons development, human space exploration, and now physical sciences research and alternative energy technologies help to keep the federal R&D outlook brighter than the bleak outlook for domestic programs overall, the FY 2007 budget would keep federal R&D on a downward slope from the highs of a few years ago. Even though some agencies and disciplines would do well in 2007, for trend after trend there were big increases leading up to 2003 or 2004 followed by real cuts that would continue into next year.  

Nondefense R&D peaked in FY 2004 and is now headed down, but for most programs funding has been stagnant for nearly two decades. Nondefense R&D did very well between 1998 and 2003 because of the campaign to double the NIH budget, as shown in Figure 3. The creation of the DHS also helped to boost nondefense R&D investments by creating a new area for investment. But all the other nondefense R&D funding agencies collectively have seen their budgets remain flat for nearly two decades (see the red bars in Figure 3), even as the U.S. economy, the federal budget, and the U.S. population have all boomed during that time. The 2007 proposed increases for NASA, DOE Office of Science, NSF, and NIST would begin to recover the lost ground of the past few years. These non-NIH agencies, combined with DOD’s research investments (also flat or declining in recent years), fund nearly all of the federal investment in non-biomedical research, including the physical sciences, non-medical life sciences, environmental sciences, engineering, mathematics, computer sciences, and social sciences. Federal support of biomedical research was on a growth path until 2003, especially during the NIH doubling campaign, but in recent years growth has leveled off and federal support has begun to decline in real terms.


Figure 4.
(click on the image for PDF)

The federal research investment would continue to decline in the 2007 budget, despite gains for the physical sciences. Federal support of research (excluding development) peaked in 2004 (see Figure 4), driven primarily by big boosts to NIH research. But the research portfolio declines in 2005 and 2006, and would fall even further in 2007 as steep cuts in NASA, DOD, and other agencies’ research, and inflation-adjusted cuts for NIH research more than offset proposed gains in NSF and DOE research. The 2007 budget would leave the federal research portfolio 8 percent below the 2004 level in inflation-adjusted dollars.

 Federal research investments are shrinking as a share of the U.S. economy, just as other nations are increasing their investments. As shown in Figure 5, the federal R&D investment has exceeded 1 percent of U.S. Gross Domestic Product (GDP) in recent years, buoyed by big increases in weapons development, but is projected to decline sharply in 2006 and 2007. Federal investments in development, mostly in DOD, have held steady as a share of the economy, but the federal research/GDP ratio is in free fall down to a projected 0.40 percent in 2007, back down to the long-term historical average after gains during the NIH doubling period. Despite an increasingly technology-based economy and a growing recognition among policymakers that federal research investments are the seed corn for future technology-based innovations, the U.S. government research investment has failed to match the new realities and has also failed to match the competition. While the European Union goal of boosting its government research investments by 2010 may not be met, Asian nations are dramatically increasing their government research investments: both China and South Korea, for example, are boosting government research by 10 percent or more annually.


Figure 5.
(click on the image for PDF)

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 XXXI: R&D FY 2007 and on the AAAS R&D web site in agency updates.)

 - The National Institutes of Health (NIH) budget would remain flat at $28.6 billion in 2007 after a small cut in 2006. NIH R&D would remain exactly even at $27.8 billion. After adjusting for inflation, the NIH budget would decline for the third year in a row (see Figure 6). All but three NIH institutes and centers would see their budgets fall for the second year in a row, with most institutes falling between 0.6 percent and 0.8 percent after a similar cut in 2006. The National Institute of Allergy and Infectious Diseases (NIAID), home to NIH’s biodefense and avian flu effort, would do slightly better with a 0.3 percent boost to $4.4 billion after a cut in 2006. The largest increase would go to the Office of the Director (OD; up 26.6 percent) to boost funding for the NIH Roadmap for Biomedical Research and to dramatically increase biodefense countermeasures efforts. The Roadmap would receive $443 million in FY 2007 (up 34 percent), with $332 million coming from institute budgets and the remainder from OD. The NIH biodefense effort would also increase substantially, by 6.2 percent to $1.9 billion. NIH projects a decline in the number of Research Project Grants (RPGs) for the third year in a row to 35,805 (7 percent fewer than the peak), an average research grant that would be 2 percent smaller in real terms compared to this year, and another decline in the RPG success rate down to just 19 percent. The expected 9,337 new (competing) RPGs in 2007 would be 10 percent fewer than the number of new grants as recently as 2003.

 - The National Science Foundation (NSF) benefits from the Administration’s American Competitiveness Initiative with a 7.9 percent boost in its total budget to $6.0 billion in 2007. Most research directorates would receive increases between 5 percent and 9 percent after several years of flat or declining funding. In real terms, funding for the Mathematical and Physical Sciences (MPS), Geosciences, Biological Sciences, and the social sciences (SBE) directorates would remain below 2004 funding levels even after the 2007 increase, while the computer sciences, polar, and engineering directorates would reach new highs. All the research directorates would increase average award sizes, numbers of research grants, and success rates for grant applications. NSF’s R&D investments would total $4.5 billion, an 8.3 percent increase that would reverse the cuts of the past two years (see Figure 6) to narrowly reach an all-time high in real terms. Although the large 2007 boost is packaged as the start of a 10-year NSF doubling effort, it is worth remembering that Congress and President Bush agreed on an NSF authorization law in 2002 promising a 5-year doubling effort by 2007; the 2007 request falls nearly $4 billion short of that previous doubling target. The Major Research Equipment and Facilities Construction account would enjoy a sizeable increase, going from $191 million to $240 million because of new starts, but the Education and Human Resources directorate budget would barely increase and remain 20 percent the 2004 funding level in real terms.


Figure 6.
(click on the image for PDF)

- The Department of Defense (DOD) R&D investment continues to grow, with a proposed increase of 2.2 percent or $1.6 billion to $74.1 billion, just matching the expected rate of inflation. DOD weapons development would increase dramatically by 7 percent or $4.2 billion to an all-time high of $62.9 billion; after a steep decline last year, the Pentagon requests a $1.6 billion boost for development in the Missile Defense Agency (MDA) to a new record of $9.3 billion and the Air Force requests nearly $3 billion more than the current year for an array of fighter plane and related development projects. But as in past years, the big proposed increases for development are matched by steep cuts to DOD’s future-oriented investments: “Science and Technology” (S&T), which includes research, medical research, and technology development, would fall 18.6 percent to $11.2 billion, erasing six years of gains (see Table 1 and Figure 6); at 2.55 percent of the regular DOD budget, the request would fall far short of the Pentagon-endorsed target of 3 percent. Within S&T, basic research (“6.1”) funding would fall 3.3 percent, while applied research (“6.2”) would fall 13.4 percent, mostly but not entirely due to the proposed elimination of 2006 earmarks. The Defense Advanced Research Projects Agency (DARPA) would be a lone winner among research-oriented programs with a request of $3.3 billion, a 10.6 percent increase, including a 13 percent increase for its basic research program after an even steeper cut in 2006.

- The National Aeronautics and Space Administration (NASA) may be an Administration priority because of the President’s vision of returning humans to the moon as a steppingstone to a Mars mission, but like other agencies NASA is being asked to do more with less. The total NASA budget of $16.8 billion in 2007 would be just 1.0 percent more than in 2006, but fortunately the non-R&D Space Shuttle budget is expected to fall $721 million after the Shuttle returns safely to flight this year and NASA finishes repairing hurricane-damaged Shuttle facilities. The Shuttle savings would go toward boosting NASA R&D by $851 million or 7.5 percent to $12.2 billion (see Table 1 and Figure 1), putting NASA near the head of the class among the top R&D funding agencies. But an acceleration of NASA efforts to develop human space vehicles to replace the Space Shuttle no later than 2014 would eat up the entire increase and more, leaving all other NASA R&D with falling funding. The Constellation Systems program to develop the new Crew Exploration Vehicle and the Crew Launch Vehicle ballooned from just $422 million last year to $1.7 billion in 2006 and would nearly double to $3.1 billion next year. Although NASA would mostly protect the Science program of earth-sun science, earth observing, astronomy, and robotic missions from cuts, aeronautics research would plummet 18 percent down to $724 million and the remnants of the life and physical sciences effort would tumble 56 percent to $275 million after a 30 percent cut in 2006. There would also be steep cuts in other NASA investments such as new propulsion technologies as the agency continues to juggle its many missions within a flat budget.

 - The Department of Energy (DOE) would enjoy substantial increases for its energy and science R&D portfolios in 2007, an unusual turn of events for a department that has mostly seen flat budgets in recent years (see Figure 6). The DOE Office of Science (OS) would emerge as the clear winner in the 2007 budget with a 14 percent increase to $3.8 billion for its R&D portfolio centered around the physical sciences. The largest OS programs would all receive increases of 8 percent or more, including a dramatic 24 percent boost for Nuclear Physics after a decade of stagnant funding, a 36 percent increase for computing research, a 25 percent increase for Basic Energy Sciences centered around several large-scale facilities, and a 31 percent increase for the core life sciences research portfolio. Although these increases would help BES, computing research, and nuclear physics reach new highs, high-energy physics, fusion, and biological and environmental research would remain below previous years’ funding levels because of years of eroding budgets. Fusion research would climb 11 percent to $319 million as the U.S. gears up to be a full partner in the International Thermonuclear Experimental Reactor (ITER) project while also sustaining a domestic fusion program. DOE’s energy R&D would jump 8.1 percent to $1.4 billion because of large increases for hydrogen, nuclear energy, fuel cells, and coal. DOE would invest $288 million in the Hydrogen Fuel Initiative to develop technologies for hydrogen-powered cars, up sharply from $235 million in 2006. Nuclear energy R&D would increase almost 40 percent, while spending on solar energy R&D would nearly double. But DOE would eliminate R&D on gas and oil technologies and some renewable energy technologies.

 - After large increases in the first few years of its existence, the Department of Homeland Security (DHS) R&D portfolio would decline for the first time in 2007, falling 5.6 percent to $1.3 billion even as overall DHS spending would continue to increase. While R&D on radiological and nuclear countermeasures would continue to climb with the establishment of the new Domestic Nuclear Detection Office, other DHS R&D areas would see funding cuts. The biological countermeasures portfolio would fall 10 percent to $337 million, while R&D on technologies to counter shoulder-fired anti-aircraft missiles would fall from $109 million down to $5 million as prototype technologies transition out of R&D to deployment.

 - The U.S. Department of Agriculture (USDA) R&D portfolio would fall 16.5 percent down to $2.0 billion, in a repeat of the annual tug-of-war over congressional earmarks (see Figure 6). Most of the steep cut comes from eliminating 2006 earmarks in the 2007 budget. Despite a falling budget, the National Research Initiative (NRI) of competitively awarded research grants would increase $67 million to a record $248 million, although similar proposed increases in past years have not made it through Congress. The expected completion of the National Centers for Animal Health in Ames, Iowa, and the proposed elimination of earmarked facilities projects would allow intramural facilities funding to plummet from $139 million down to $8 million.

 - The National Institute of Standards and Technology (NIST) laboratories in the Department of Commerce would be a star in the 2007 R&D budget as part of the President’s American Competitiveness Initiative. NIST intramural research would climb 18 percent to $383 million, while construction funding for NIST research facilities would jump 42 percent to $451 million. But once again, the increased investments for the NIST laboratories would be offset by cuts in other NIST programs. The Bush Administration once again proposes to eliminate NIST’s extramural Advanced Technology Program (ATP). The ATP has a budget of $79 million in FY 2006, down by nearly half from the previous year. And in another repeat of previous requests, the budget would cut the non-R&D Hollings Manufacturing Extension Partnership by 56 percent down to $46 million. Total NIST R&D would increase 6.4 percent to $451 million. Also in Commerce, National Oceanic and Atmospheric Administration (NOAA) R&D would fall by 6.3 percent to $578 million, mostly from the elimination of FY 2006 congressional earmarks.

 - The Department of Veterans Affairs (VA) would maintain a flat R&D budget of $765 million in FY 2007, but planned funding from other sources would bring total VA-performed R&D to $1.6 billion.

 - R&D in the Department of the Interior would fall 5.8 percent to $537 million, with a similar 4.3 percent cut to $537 million for R&D in Interior’s lead science agency, the U.S. Geological Survey (USGS). The cuts would, as in previous requests, 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) R&D portfolio of $557 million would be a 7.2 percent cut, mostly from the proposed elimination of earmarks after a similarly-sized cut in 2006.

 - Department of Transportation (DOT) R&D funding would plummet 20.9 percent to $557 million, based on preliminary information. Early reports from DOT indicate steep cuts to both aviation R&D and highway-related R&D.  

Budget Context and Outlook

 The President’s FY 2007 budget now goes to Congress. As members of Congress gear up for budget hearings in coming weeks, they will also be considering a burgeoning number of innovation-related bills that all attempt to address growing concerns about the state of U.S. innovation. These bills take numerous approaches, from revamping science and math education to establishing new incentives for students to choose science, engineering, and mathematics majors to authorizing increasing funding for basic research. As a result, President Bush’s proposals to increase physical sciences and related research funding could find a receptive audience on Capitol Hill. But there will also be immense pressure to boost funding for biomedical research, restore funding to proposed R&D cuts, and add funding to domestic programs proposed for consolidation or elimination, all while keeping the budget deficit in check and keeping dollars flowing to the U.S. military in Iraq and Afghanistan. Just as in past years, there are many months and many obstacles ahead before the FY 2007 budget becomes law, and no guarantee that any of the proposed increases or cuts will make it into the final budget.

 - February 8, 2006

(More materials on R&D in the FY 2007 budget, historical data and charts, and more information on AAAS Report XXXI: Research and Development FY 2007, 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.)

AAAS R&D Budget and Policy Program
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