American Association for the Advancement of Science

AAAS Analysis of R&D in the FY 2007 Budget
March 8, 2006 REVISED (revisions March 20 in [ ] )-

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

AAAS 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. AAAS Analysis of the Outyear Projections for R&D in the FY 2007 Budget

- Table 6. R&D by Appropriations Subcommittee

- Table 7. Interagency Science and Technology Initiatives

PDF version of this document

Detailed agency updates:

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

AAAS Analysis of the Outyear Projections for R&D in the FY 2007 Budget

Full Text of AAAS Report XXXI: Research & Development FY 2007

Supplemental Tables and Full-Color Charts (PDF) (NOTE: most of the charts and tables were revised March 8)


-Table. Total R&D by Agency (REVISED 3/06)

-Table. Basic Research by Agency (REVISED 3/06)

-Table. Applied Research by Agency (REVISED 3/06)

-Table. Research in the FY 2007 Budget (REVISED 3/06)

-Table. Development by Agency (REVISED 3/06)

-Table. Conduct of R&D by Agency (REVISED 3/06)

-Table. R&D Facilities and Capital Equipment by Agency (REVISED 3/06)

-Historical Table 1. R&D by Agency, 1976-2007 (REVISED 3/06)

-Historical Table 2. R&D by Agency, 1976-2007 in Constant Dollars (REVISED 3/06)

-Chart. Trends in Federal R&D, 1976-2007(REVISED 3/06) - Data Table

-Chart. Trends in Federal R&D by character of work, 1976-2007(REVISED 3/06)

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


-Chart. Selected Trends in Nondefense R&D, 1976-2007 (REVISED 3/06)

-Chart. Trends in Research by Agency, 1976-2007 (REVISED 3/06) - Data Table

-Chart. Trends in Basic Research, 1976-2007 (REVISED 3/06)- 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 3/06)

-Chart. Trends in Federal R&D, FY 1995-2007 (DOC, DOI, DOT, EPA) (REVISED 3/06)

-Chart. Trends in DOE Office of Science, 1987-2007 (REVISED 3/06) - 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

 

(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. This analysis contains revised estimates of federal R&D, different from figures originally presented in the President's budget and the February 8 Preliminary Analysis. 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 (ACI), first previewed in the 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. 

The overall federal investment in research and development (R&D) would increase to nearly $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. As result, funding for the remainder of the R&D portfolio would fall, even after the ACI increases are taken into account. 

The federal investment in basic and applied research (excluding development and R&D facilities) would decline 3.3 percent to $54.8 billion, meaning increases for some physical sciences and related research programs 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; and the National Aeronautics and Space Administration (NASA), despite being a major sponsor of physical sciences research, would see its research funding fall sharply to offset a big increase in development of new space vehicles. 

The large proposed increases for selected physical sciences and engineering research programs 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. Looking to the future, the Bush Administration’s 5-year budget plans show that in the push to reduce budget deficits primarily through cuts in discretionary spending, all R&D funding agencies except NASA, NSF, NIST, and DOE Science would see their budgets decline in real terms over the next five years.

R&D in the FY 2007 Budget: Cuts for Most Areas, Gains for Weapons, Space Vehicles, 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 a major initiative in his State of the Union address to boost federal investments in physical sciences research. The FY 2007 budget follows through with large increases for key physical sciences funding agencies, 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 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 and the increases for NASA development enable nondefense R&D to increase 1.6 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 have been revised since the February release of the budget and the February 8 AAAS Preliminary Analysis.)


Figure 1.
(click on the image for PDF)
 

- The proposed federal R&D portfolio in FY 2007 is $136.9 billion, 1.8 percent or $2.4 billion above this year’s funding level, 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 $907 million) would be far greater than the overall $2.4 billion increase, leaving all other R&D programs collectively with less money. Development funding would hit a new high of $77.9 billion (up 6.0 percent). Total federal support of research (basic and applied) would fall 3.3 percent to $54.8 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 1.6 percent to $58.5 billion, far better than the 0.5 percent cut requested for all nondefense discretionary programs (see Table 1 and Figure 4). Boosts for physical sciences research and space vehicles development help to offset cuts in other 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 21 percent to $382 million), and NSF (up 8.3 percent to $4.5 billion) because of the American Competitiveness Initiative; and a 8.0 percent increase to $12.2 billion for NASA R&D to develop a Crew Exploration Vehicle and Crew Launch Vehicle.

- But other nondefense R&D agencies not linked to the high priority areas would see flat funding or steep cuts (see Figure 1). The NIH budget, after declining slightly in 2006 for the first time in 36 years, would remain flat at $28.6 billion. All but three 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 7.1 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 fall 10.3 percent to $1.1 billion. And despite proposed increases for some alternative energy R&D investments, steep cuts or outright program terminations in energy conservation, fossil energy, and some renewable technologies would leave DOE energy R&D down 4.8 percent to $1.3 billion.


Figure 2.
(click on the image for PDF)

- There would be tough budgetary choices even in agencies with increasing budgets. At NASA, a $907 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 to develop the next generation of human space vehicle to replace the Space Shuttle. 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, but the budget proposes to eliminate NIST’s external Advanced Technology Program (ATP). 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. 

- 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 1.9 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.

- The total federal research investment (basic and applied research, excluding development and facilities funding) would total $54.8 billion in 2007, down 3.3 percent from the current year (see Table 2 and Figure 2). Although NSF (up 7.1 percent), DOE’s Office of Science (up 12.3 percent), and NIST (up 11 percent) would do very well for their research portfolios in the 2007 budget because of the ACI emphasis on the physical sciences, there would be steep cuts in other agencies, even in agencies such as DOD and NASA that are major supporters of physical sciences research. 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 19.8 percent), and NASA (down 16.5 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 remain flat at $27.7 billion, a 2.2 percent loss after inflation.

- The Administration priorities of defense development, space exploration, and basic physical sciences research would all receive large increases, while R&D for other national missions would fall sharply (see Table 3). Space-related R&D would gain 10.7 percent to $11.5 billion, though entirely from gains in development of new space craft instead of the broader space R&D portfolio. Boosts to DOE Science and NSF R&D make up the 11.0 percent gain for general science R&D to $8.3 billion. Defense R&D continues to be a high priority with a 1.9 percent boost to $78.4 billion. But R&D for other national missions including agriculture (down 19 percent), transportation (down 16 percent), and the environment (down 7 percent) would all fall in a tight domestic budget. Despite increases for some alternative energy R&D programs, cuts in energy conservation, fossil fuels, and some renewables would result in a 4 percent cut for energy R&D to $1.4 billion. Even health R&D would fall for the second year in a row down to $29.8 billion after decades of steady gains, as would justice R&D (down 11.5 percent) after steady gains for the DHS R&D portfolio over the previous four years. 

- Federal homeland security-related R&D would total $5.1 billion in FY 2007, a small loss of $29 million or 0.6 percent that would be the first cut in a portfolio that has expanded dramatically 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). 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. The DHS R&D portfolio would fall for the first time with a 10.3 percent proposed cut to $1.1 billion. 

- Although the Bush Administration projects that NASA and the three ACI agencies would continue to receive increases in future years, the same projections show that all other R&D funding agencies would sacrifice heavily over the next five years. In the AAAS analysis of the outyear budget projections, federal R&D would grow to $141.9 billion by 2011, an increase in current dollars but a 5.1 percent cut from this year after adjusting for expected inflation (see Table 5). [There is money set aside for NSF, DOE’s Office of Science, and NIST to win substantial gains every year through 2011 to stay on course for a 10-year doubling path. But there are projected real cuts for every other R&D funding agency (see Figure 3).] The NIH budget would decline every year to 2010 before rebounding slightly in 2011; NIH R&D would fall 12.1 percent in real terms between 2006 and 2011. DOD R&D would fall 11.6 percent below the current budget after inflation by 2011. Most nondefense R&D agencies are projected to see their R&D budgets fall by between 10 and 30 percent over the next five years. Although NASA R&D is projected to gain 42 percent in real terms, the gains would go to a dramatic ramp-up of Constellation Systems from $1.7 billion this year to $7.7 billion in 2011, and a 21 percent real boost for finishing the Space Station, leaving NASA Science down 5.0 percent and all other NASA R&D down 24 percent. (The full AAAS Analysis of the Outyear Projections for R&D in the FY 2007 Budget is available on the AAAS R&D web site.)


Figure 3.
(click on the image for PDF)

- In the congressional appropriations process, the federal R&D investment is contained in 10 of the 11 appropriations bills (see Table 6). The large proposed increases for NSF, NASA, and NIST will have to find room in the new Science, State, Justice, and Commerce appropriations bill, while DOD development increases would be funded in the Defense bill. The flat NIH budget would be funded in the always-contentious Labor/HHS/Education bill, which contains many health and education programs that are proposed for steep cuts or even elimination in the FY 2007 request.  

- The federal government continues to invest billions of dollars in multi-agency R&D initiatives that cut across agency missions (see Table 7). 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 surge 7.7 percent to $3.1 billion because the American Competitiveness Initiative encompasses increasing support for computer sciences and other IT research. The three ACI agencies of NIST, NSF, and DOE Office of Science, all large contributors to the initiative, would all boost their funding for IT research.  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 4.
(click on the image for PDF)

Although high-priority investments in weapons development, human space exploration, and now physical sciences research 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 4. 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 4), 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. 

The federal research investment would continue to decline in the 2007 budget, even for the physical sciences. Federal support of research (excluding development) peaked in 2004 (see Figure 5), 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. Even physical sciences research funding could decline, as research cuts in three major sponsors of the physical sciences (DOD, NASA, and NIH) offset increases in NSF, DOE, and NIST. The 2007 budget would leave the federal research portfolio 8 percent below the 2004 level in inflation-adjusted dollars.
 
Figure 5.
(click on the image for PDF)

Federal research investments are shrinking as a share of the U.S. economy, just as other nations are increasing their investments. 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 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. 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.  

Highlights of the Major R&D Funding Agencies

(Please see the detailed agency updates on the AAAS R&D web site and the forthcoming AAAS Report XXXI: R&D FY 2007 for more information on R&D in the agencies below.)

- After falling for the first time since 1970 in 2006, the 2007 request would keep the National Institutes of Health (NIH) budget exactly even at $28.6 billion. All but three of NIH’s institutes and centers (IC’s) would see their budgets shrink for the second year in a row. Most IC budgets would fall 0.5 and 0.8 percent in 2007, after similar cuts in 2006. NIH R&D funding, 97 percent of the total budget, would barely increase by $5 million to $27.8 billion (see Table 1). Only the Office of the Director (OD) would receive a large increase (up 26.6 percent to $668 million) because of increases for the two NIH priorities of biodefense R&D and the NIH Roadmap for Biomedical Research. Biodefense R&D would total $1.9 billion, an increase of $110 million or 6.2 percent going entirely to OD to develop biodefense countermeasures. Roadmap funding would increase by $113 million or 34.4 percent to $443 million. After adjusting for economy-wide inflation, NIH R&D would decline for the third year in a row, down 5.4 percent in 2007 from the 2004 peak (see Figure 6). But NIH’s own calculations of biomedical inflation are running higher; the NIH budget would fall 11 percent from 2004 to 2007 based on these calculations. NIH projects it will fund only 19 percent of all Research Project Grants (RPGs) applications in 2006 and 2007. In 2007, the number of RPG’s would fall for the third year in a row to 35,805 (7 percent fewer than the peak). R&D in the other Department of Health and Human Services (HHS) agencies combined would fall 4.1 percent to $1.3 billion. All HHS agencies would have flat or declining funding.

 
Figure 6.
(click on the image for PDF)

- The National Science Foundation (NSF) benefits from the American Competitiveness Initiative to boost physical sciences research with a 7.9 percent boost for its budget to $6.0 billion in 2007. The increase would benefit all disciplines in NSF’s research portfolio. Most research directorates would receive increases between 5 percent and 9 percent after several years of flat or declining funding. 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. 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 [below] the 2004 funding level in real terms.

- R&D in the Department of Defense (DOD) would continue to reach new highs in 2007 with a $1.6 billion or 2.2 percent increase to $74.1 billion, just matching expected inflation. The entire increase and more would go to weapons development (up 7 percent or $4.2 billion to $62.9 billion), leaving funding for research and technology development in steep decline. As in previous years, DOD would slash “S&T” investments by 18.6 percent or $2.6 billion to $11.2 billion (see Figure 6). S&T, which includes basic research, applied research, medical research, and technology development, would fall to 2.55 percent of the regular DOD budget. Despite being a major sponsor of physical sciences research, DOD’s support of basic and applied research would fall in 2007, primarily but not entirely from the proposed elimination of 2006 earmarks. While the Defense Advanced Research Projects Agency (DARPA) would see its budget climb 10.6 percent to $3.3 billion, most other research-oriented programs would suffer steep cuts.  

- The National Aeronautics and Space Administration (NASA) continues to be an Administration priority because of the President’s Vision for Space Exploration, 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 NASA expects considerable savings in the non-R&D Space Shuttle program after NASA returns the Shuttle to flight this spring and finishes repairing hurricane-damaged Shuttle facilities. The Shuttle savings would help boost NASA R&D by $907 million or 8.0 percent to $12.2 billion (see Table 1). But an acceleration of NASA efforts to develop human space vehicles to replace the Space Shuttle by 2014 would eat up the entire increase and more, leaving all other NASA R&D with cuts. Constellation Systems 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. The heavy emphasis on development of space vehicles over NASA’s support of basic and applied research would lead to a 16.5 percent cut in NASA research to $3.3 billion after a cut in 2006. 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 and the remnants of the life and physical sciences effort would tumble 56 percent to $275 million. There would also be steep cuts in other NASA investments such as new propulsion technologies, and the postponement or termination of many planned missions.  

- The Department of Energy (DOE) would enjoy substantial increases for its science portfolio in 2007 because of the Office of Science’s (OS) leading role in the American Competitiveness Initiative. Office of Science R&D would emerge as the clear winner in the 2007 budget with a 14.4 percent increase to $3.8 billion for its portfolio centered on the physical sciences (see Figure 6). After several years of flat or declining budgets, funding for every OS program would increase substantially, including a dramatic 24 percent boost for Nuclear Physics, a 36 percent increase for computing research, a 25 percent increase for Basic Energy Sciences centered on several large-scale facilities, and a 31 percent increase for the core life sciences research portfolio. Although President Bush outlined large increases for some alternative energy R&D programs as part of an Advanced Energy Initiative in his State of the Union address, DOE energy R&D would fall 4.8 percent to $1.3 billion. Substantial increases for R&D on hydrogen, fuel cells, biomass, and solar technologies would be more than offset by steep cuts and even program terminations in other areas such as fossil fuels, energy conservation, and geothermal. Many of the increases are related to a $288 million Hydrogen Fuel Initiative (up from $235 million) to develop hydrogen-powered cars. Total DOE R&D, including defense programs, would rise 3.7 percent to $9.0 billion (see Table 1). 

- After several years of large increases, the Department of Homeland Security’s (DHS) R&D funding would fall for the first time in 2007, by 10.3 percent down to $1.1 billion. While R&D on radiological and nuclear countermeasures would surge 61 percent to $328 million within the new Domestic Nuclear Detection Office, funding for nearly all other DHS R&D areas would decline. Because of an emphasis on development over research, basic and applied research in DHS would fall 20 percent in 2007. University and Fellowship Programs funding would fall $10 million down to $52 million after a similar cut this year. 

- The U.S. Department of Agriculture (USDA) R&D portfolio would fall 16.5 percent down to $2.0 billion, mostly from the proposed elimination of 2006 earmarks in the 2007 budget (see Figure 6). Despite a falling budget, the National Research Initiative (NRI) of competitively awarded research grants would increase $67 million to a record $248 million. USDA would also shift some formula funding to competitive grants; Hatch Act funding would remain at $177 million, but a growing share of program funding would go to competitive grants. The completion of an animal health laboratory and the elimination of earmarked projects would allow intramural facilities funding to plummet 94 percent to $8 million; intramural research at USDA labs would fall 11.5 percent to $1.0 billion, mostly from the elimination of 2006 earmarks. 

- Intramural research at the National Institute of Standards and Technology (NIST) would be favored with substantial increases in 2007 as part of the American Competitiveness Initiative. NIST’s intramural research would increase 21.3 percent to $382 million, while intramural R&D construction would also climb. But once again, the budget proposes to eliminate NIST’s extramural Advanced Technology Program (ATP). The budget would also cut the non-R&D Hollings Manufacturing Extension Partnership in half to $46 million. National Oceanic and Atmospheric Administration (NOAA) R&D would fall by 6.3 percent to $578 million, mostly from the elimination of 2006 earmarks. NOAA and ATP cuts would offset gains at the NIST labs, leaving total Department of Commerce R&D down 0.9 percent to $1.1 billion.

- 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’s lead science agency, the U.S. Geological Survey (USGS), would fall $27 million or 4.7 percent to $532 million in FY 2007. As in previous requests, the cuts would be concentrated in USGS’ mineral resources and water resources R&D.   

- The Environmental Protection Agency (EPA) R&D portfolio of $557 million would be a 7.1 percent cut after a similar cut in 2006. Although most of the reduction would come from the proposed elimination of 2006 earmarks, funding for most EPA research areas would decline, except for homeland security R&D. 

- After a dramatic increase to an all-time high in 2006 because of last summer’s highway bill, the Department of Transportation’s (DOT) R&D funding would fall 8.5 percent or $71 million to $767 million. Highway R&D would continue to increase, by 4.6 percent to $397 million, but aviation R&D would fall steeply by 24 percent to $235 million after a large congressional increase in 2006.   

Budget Context and Outlook 

The President’s FY 2007 budget is now working its way through Congress. As members of Congress gear up to write a budget resolution setting the framework for this year’s budget debate and then writing the appropriations bills to fill in the details for discretionary programs, 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 authorizing increasing funding for basic research. As a result, President Bush’s proposals to increase physical sciences and related research funding have found a receptive audience on Capitol Hill. But members of Congress have also faced and even instigated pressure to boost funding for biomedical and other research funding, 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. 

- March 8, 2006 (revisions March 20 in [ ] )

(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.)

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