The full report will be released at the 25th
Anniversary AAAS Colloquium on Science and Technology Policy "Science
and Technology at the Millennium: Retrospect and Prospect"at the
Omni Shoreham Hotel in Washington, DC, April 11-13, 2000.
This document, ordering information for AAAS Report XXV,
the full text of AAAS Report XXV, the Colloquium program and registration
materials, and other information on federal funding for R&D are available
on the World Wide Web at: http://www.aaas.org/spp/R&D
(This AAAS document supersedes previous preliminary analyses
of R&D in the FY 2001 budget (February 10, March 10) and incorporates
final AAAS estimates of R&D, based on agency data obtained after the
release of the President's budget)
Highlights
The President's fiscal year (FY) 2001 budget projects
a string of surpluses for the next decade, and sets forth a plan to
pay off the national debt by 2013 while still providing expanded Medicare
coverage and real increases in discretionary spending, the part of the
federal budget out of which nearly all federal support for research
and development (R&D) is funded.
Budget requests in the past several years have been
constrained because of tight caps on discretionary spending enacted
in 1997. Although final appropriations have been generally favorable
after Congress and the President figured out how to circumvent the caps,
the FY 2001 cap would have required sharp cuts in discretionary programs
in the FY 2001 request. The President, however, proposes to repeal the
existing caps and replace them with far more generous ones that would
allow a 5.2 percent increase in total discretionary spending in FY 2001.
As a result, the budget finds room for increases in most R&D programs,
including a nearly 20 percent increase for R&D in the National Science
Foundation (NSF). (References in italics are to chapters in the
full report.)
· The request
for total federal R&D in FY 2001 is $85.4 billion, $2.1 billion
or 2.5 percent more than FY 2000 (see Table 1).
· For the second
year in a row, the budget requests more for nondefense R&D than
defense R&D. Nondefense R&D would increase by 6.6 percent
to $43.4 billion, or 50.9 percent of total R&D (see Table
1). The increase would be well ahead of the expected 2.0 percent
inflation rate. Defense R&D would fall $602 million to $42.0
billion, a decline of 1.4 percent.
· The budget
places a high priority on a balanced allocation of resources among science
and engineering disciplines. Although a series of large increases
for the National Institutes of Health (NIH) has resulted in an emphasis
on biomedical and life sciences research in recent years, the FY 2001
budget proposes large increases for R&D programs in non-life sciences
disciplines. Every major R&D funding agency would receive
an increase except the Department of Defense (DOD).
· The FY 2001 budget
packages many of the proposed increases for R&D in new or existing
multi-agency initiatives organized around a common theme, including
a new initiative on nanotechnology ($495 million; up 83.3 percent) and
existing initiatives in information technology ($2.3 billion; up 34.5
percent; see Chapter 24) and global climate change ($1.7 billion;
up 2.3 percent; see Chapter 17).
· The AAAS analysis
of the outyear projections in the FY 2001 budget shows that nondefense
R&D would increase from $40.8 billion in FY 2000 to $46.5 billion
in FY 2005, a 3.4 percent gain after adjusting for expected inflation
(see Table 3 and Chapter 4). Defense
R&D would fall 13.7 percent in inflation-adjusted terms, even as
total defense spending would rise.
· Basic research
is a high priority for the Clinton Administration. Basic research would
total $20.3 billion in FY 2001 (up 6.8 percent), following an even larger
increase in FY 2000 (see Table 2 and
Chapter 4). Unlike in FY 2000 appropriations, however, when the
bulk of the increase went to National Institutes of Health (NIH) basic
research in the life sciences, the FY 2001 request would increase support
across the broad range of science and engineering disciplines.
· Because
the majority of federally funded basic research is performed by colleges
and universities, the budget's emphasis on basic research would result
in increases for federal support for R&D at colleges and universities
(up 7.6 percent to $18.1 billion). The largest sponsor of academic research
would continue to be NIH with $10.9 billion (see Table
4 and Chapter 4).
· Industry support
for R&D continues to grow far faster than federal R&D or
the U.S. economy as a whole. U.S. industry-funded R&D increased
by 12.0 percent in 1999, following similar increases in the previous
four years. Total U.S. R&D reached $247 billion in 1999, and further
increases are expected in 2000 (see Table
6 and Chapter 5).
· The FY 2001 budget
packages many science and technology-oriented programs of special interest
to the Clinton Administration in the "21st Century
Research Fund," a grouping of both R&D and non-R&D
S&T programs that was introduced the FY 1999 budget. Programs in
the Fund would enjoy a substantial increase of 7.1 percent or $2.9 billion
to $42.9 billion in FY 2001 (see Table 5
and Chapter 1), with more than half of the increase going to
NSF and NIH. FS&T, another measure of federal investments in science
and technology proposed by the National Academy of Sciences, would increase
3.3 percent to $53.7 billion (see Table 1).
Agency Highlights
· The centerpiece
of the Clinton Administration FY 2001 R&D request is the National
Science Foundation's (NSF) request for $4.6 billion. This represents
an increase of $675 million, or 17.3 percent. If appropriated by Congress,
this increase would represent the largest increase in a single year
ever received by NSF and double the largest dollar increase ever proposed
previously. NSF R&D would jump 19.8 percent to $3.4 billion. Most
of the proposed increase would go to four major initiatives that involve
each of the seven NSF directorates. However, nearly half of the increase
would strengthen core research programs. (See Chapter 9.)
· The FY 2001
request for R&D in the Department of Defense (DOD) is $38.6
billion, $706 million or 1.8 percent below FY 2000; the overall DOD
budget, however, would climb $11 billion or 4.0 percent to $292 billion.
DOD's support of basic research (the "6.1" category) would
receive 4.9 percent more in FY 2001 for a total of $1.2 billion. The
Ballistic Missile Defense Organization (BMDO) would boost its budget
by 15.0 percent to $3.9 billion, and would use much of the increase
to accelerate development of a national missile defense system. (See
Chapter 8.)
· The National Institutes of
Health (NIH) budget would increase by $1.0 billion or 5.6 percent
over FY 2000, for a total of $18.8 billion. NIH's support of R&D
would increase by 5.8 percent to $18.1 billion. Many Members of Congress
are committed to doubling the NIH budget in five years, and FY 2001
would be the third year of that effort which began with large increases
in FY 1999 and FY 2000. NIH is by far the largest federal supporter
of R&D at universities and colleges. NIH also funds more than half
of all federal support for basic research. (See Chapter 10.)
· The FY 2001 budget
for the National Aeronautics and Space Administration (NASA) would
increase to $14.0 billion, a 3.2 percent increase over last year's enacted
budget of $13.6 billion. Total FY 2001 NASA support of R&D would
increase by 2.7 percent to $10.0 billion. Several NASA R&D programs
would receive substantial increases, including Space Science (up 9.4
percent to $2.4 billion), Life and Microgravity Sciences (up 10.1 percent
to $302 million), and Aero-Space Technology (up 6.1 percent to $1.2
billion because of work on a second-generation reusable launch vehicle).
In marked contrast to projections of declining outyear budgets in previous
years, NASA now anticipates real increases in its budget to FY 2005.
(See Chapter 12.)
· The Department
of Energy's (DOE) R&D budget would increase by 7.3 percent to
$7.6 billion. There would be substantial increases for DOE's Science
programs, led by an increase of $236 million or 30.6 percent (to $1.0
billion) for Basic Energy Sciences, primarily for construction of the
Spallation Neutron Source. DOE would boost its support for nondefense
scientific computing research by 42.3 percent to $182 million. DOE's
defense programs have been reorganized and most are now in the semi-autonomous
National Nuclear Security Administration (NNSA), which would house $3.2
billion of DOE's R&D portfolio (up 2.9 percent), including its nuclear
weapons, inertial confinement fusion, and defense computing R&D.
(See Chapter 11.)
· R&D in the
U.S. Department of Agriculture (USDA) would increase by 3.5 percent
to $1.8 billion, including a $31 million proposed boost to $150 million
for competitively awarded research grants in the National Research Initiative.
There would also be $120 million (the same as FY 2000) for the second
year of a similar competitive research grants program with mandatory
funds, if Congress does not block these funds. (See Chapter 13.)
· The Department
of Commerce would see its R&D budget increase by 7.0 percent
to $1.1 billion in FY 2001 due to an expanded intramural research program
at the National Institute of Standards and Technology (NIST), a substantial
increase for the Advanced Technology Program (ATP), and a new Institute
for Information Infrastructure Protection (IIIP). There would also be
a substantial increase in Technology Opportunity Grants aimed at developing
new technologies to improve public access to information technologies.
(See Chapter 14.)
· R&D in the
Department of the Interior would increase by 2.9 percent to $590
million in FY 2001. Interior's lead science agency, the U.S. Geological
Survey (USGS), would receive 7.3 percent more for its R&D programs
for a total of $539 million. USGS would place a high priority on geographic
and biological research. (See Chapter 14.)
· The Department
of Transportation's (DOT) R&D in FY 2001 would increase substantially
by $172 million or 28.3 percent to $778 million for aviation, highway,
and traffic safety R&D. The budget proposes to finance much of the
increase with additional highway trust fund revenues, but a similar
proposed increase was rejected by Congress last year. (See Chapter
14.)
· The Environmental Protection
Agency's (EPA) R&D budget would increase 4.0 percent to $673
million. Research on clean air, ecosystems, risk assessment, and emerging
risk issues would be high priorities in the request. (See Chapter
14.)
U.S. Industry Support for
R&D
In addition to the federal support of R&D described
above, the U.S. R&D system also encompasses more substantial privately
funded R&D efforts. All in all, the U.S. invested an estimated $247
billion in R&D in 1999 (see Table 6).
This represents 2.79 percent of the nation's Gross Domestic Product
(GDP). The largest share of this money (about 69 percent; total $169
billion) came from industrial firms. Most of the balance (27 percent)
came from the federal government. Colleges and universities, private
foundations, other nonprofit institutions, and state and local governments
provided the remainder.
There has been a remarkable shift in the composition
of total U.S. R&D over the past 25 years, as shown in Figure 1.
Back in the 1970s, the federal government was still the dominant supporter
of R&D in the United States as it had been for the entire post-World
War II era, while U.S. industrial firms were steadily but slowly increasing
their investments in privately funded R&D. In 1980, however, industry
support of R&D exceeded federal support of R&D for the first
time because of stagnating federal support combined with accelerated
growth in industry support. Since then, industry support of R&D
has grown dramatically, but federal support of R&D has actually
stagnated or declined in real terms after peaking in the mid-1980s.
In 1999, industry support of R&D grew by 12 percent,
the fifth consecutive year with increases at or above double-digit levels.
A recent forecast by the Industrial Research Institute predicts that
this growth will continue in 2000, but perhaps at a slower rate. Battelle
Memorial Institute forecasts that industry's funding of R&D will
rise 10.5 percent in 2000.
The fastest rising component of this growth in industrial
R&D was not development, as one might expect, but applied research,
which increased 91 percent over the past five years, followed by basic
research, which rose 79 percent. Development was the slowest-growing
segment, rising only 65 percent, though it still accounts for the vast
majority of industrial R&D (See Chapters 2 and 5).
Figure 1. (click on the image to view a full-size PDF
chart)
Figure 2. (click on the image to view a full-size PDF
chart)
Figure 3.(click on the image to view a full-size PDF
chart)
Federal support for R&D is projected to increase
from $83.3 billion in FY 2000 to $87.1 billion in FY 2005, which becomes
a decline of 5.3 percent after adjusting for expected inflation (see
Table 3). The overall decline is due to projected cuts in defense
R&D over the next five years. By FY 2005, defense R&D would
fall 13.7 percent in inflation-adjusted terms even as total defense
spending would rise. Nondefense R&D, however, would increase under
the President's proposals from $40.8 billion in FY 2000 to $46.5 billion
in FY 2005, a gain of 14.2 percent. After adjusting for expected inflation,
the five-year gain becomes 3.4 percent in contrast to a projected 6.7
percent cut over five years in last year's budget.
To understand these projections, one must view them
in the context of the entire federal budget. Nearly all federal R&D
is funded through the discretionary one-third of the budget subject
to annual appropriations. The FY 2001 budget proposes to increase total
discretionary spending by 5.2 percent in FY 2001 and at a rate high
enough to keep pace with expected inflation thereafter, from $592 billion
in FY 2000 to $668 billion in FY 2005, a 2.2 percent inflation-adjusted
increase.
Included in these projections are some surprising increases
for agencies and programs long accustomed to declining outyear budgets.
NASA R&D would increase from $9.8 billion in FY 2000 to $11.5 billion
in FY 2005 (up 6.1 percent after inflation; see Figure 3). The increase
is even larger for key R&D programs because the International Space
Station would see its R&D budget halved over the next five years
as development and construction are completed, leaving more room for
other programs. NASA plans a dramatic expansion of the Space Science
program from $2.2 billion in FY 2000 to $3.6 billion in FY 2005 (47.8
percent after inflation), including a full complement of Mars exploration
missions. NASA R&D in Aero-Space Technology would double from $1.1
billion to $2.3 billion (up 85.4 percent after inflation) because of
accelerated efforts to develop a new generation of reusable launch vehicles.
Other programs slated for dramatic increases include: Industrial Technology
Services in the National Institute for Standards and Technology (NIST;
up 60.8 percent after inflation) because of a new Institute for Information
Infrastructure Protection and increases for the Advanced Technology
Program; and DOE's Energy Supply R&D (up 23.3 percent after inflation)
for solar, renewable, and nuclear energy R&D.
Most other programs' projections generally show growth
in FY 2001 and smaller increases at the rate of inflation thereafter,
consistent with the pattern for discretionary spending as a whole. NSF's
R&D would jump by almost 20 percent in FY 2001 but would increase
only slightly thereafter to end up 15 percent above the FY 2000 level
after adjusting for inflation (see Figure 3). NIH R&D would increase
by nearly $1 billion between FY 2000 and FY 2001 but would take four
years to increase by another $1 billion.
In contrast to projected cuts for most R&D programs
in past budgets, only a few are projected to decline in the FY 2001
budget. USDA R&D would decline 6.1 percent after inflation because
a $120 million a year mandatory competitive grants program would expire
before FY 2005, offsetting projected increases for appropriated R&D
programs. National Oceanic and Atmospheric Administration (NOAA) R&D
would decline 3.9 percent because modest increases in the budget would
fail to keep pace with inflation.
For defense R&D, the long post-Cold War slide in
R&D funding is projected to continue. While DOD's basic research
(down 5.8 percent) and applied research (down 11.3 percent) programs
would fare somewhat better than its development programs, total DOD
R&D would fall 14.6 percent after inflation to $37.0 billion. DOE's
defense R&D would also decline by 2.8 percent after inflation. While
DOE's nuclear weapons R&D would see increases from $2.2 billion
to $2.4 billion, the increases would fail to keep pace with inflation,
resulting in a 0.8 percent cut by FY 2005 in real terms. (See Chapter
4.)
Outlook
The President's budget is now under consideration in
Congress. Within the next few weeks, Congress is expected to approve
its FY 2001 budget resolution setting out broad spending targets for
the appropriations process. (The AAAS analysis of R&D in the budget
resolution will be available soon.) After that, Congress will begin
the arduous task of setting appropriations for individual programs and
getting them through both the House and the Senate, and then to the
President.
Because of projected surpluses and bipartisan agreement
to increase R&D spending in last year's appropriations process,
the outlook for federal R&D in FY 2001 is highly favorable. Congress,
of course, will have its own priorities and will alter the President's
request, but it seems almost certain that final FY 2001 appropriations
for R&D in the aggregate will be similar and maybe even higher than
these requested funding levels. With the concern for a balanced research
portfolio articulated by no less than President Clinton himself, there
is a high probability that programs across the breadth of the federal
R&D portfolio will benefit.
