The federal government’s fiscal
year (FY) 2005 began on October 1, but the FY 2005 budget is still far from
complete. Only 4 of the 13 appropriations bills funding government programs
have been signed into law, and further progress came to a halt last week when
Congress adjourned until November 16. The President has signed a continuing
resolution (CR; temporary appropriations bill) extending funding for the 9
remaining appropriations bills at FY 2004 levels through November 20. The
remaining appropriations bills, including R&D funding for all agencies except
the Departments of Defense (DOD) and Homeland Security (DHS), will likely be
resolved in a post-election session through an omnibus appropriations bill.
Record-breaking
federal budget deficits, high-priority spending increases for homeland
security and national defense, and restraints on domestic spending to
bring down future deficits are combining to squeeze the federal investment
in non-defense, non-homeland security R&D. But there are large differences
between House and Senate proposals for domestic programs to be resolved
in November.
In action so far, the House, the Senate, and the President have agreed
on substantial increases in the defense and homeland security R&D
portfolios that will bring the total federal R&D investment to record
highs in FY 2005. But the remaining nondefense,
non-homeland security R&D portfolio is unfinished and could be headed
for spending cuts. The House would provide a substantial increase
in the federal R&D portfolio, but the entire increase would go to
defense and homeland security. In that chamber’s plan, R&D would
reach another all-time high of $131.1 billion in FY 2005, a $5.0 billion
or 3.9 percent increase over last year (see Table
1). But taking out large increases for defense and homeland security
R&D would leave the remaining R&D portfolio down 0.1 percent,
and taking out an increase for the National Institutes of Health (NIH)
would leave nondefense R&D down 2.3 percent.
Historically, the
Senate has been more generous to R&D programs than the House, and
the FY 2005 budget is no exception. Over the past month the Senate,
in a flurry of activity, succeeded in drafting 12 of the 13 bills but
adjourned without completing action on most of them. The Senate would
bring total R&D funding to $132.9 billion, $2.2 billion more than
the request and $1.8 billion more than the House for a 5.3 percent increase
over last year.
Because the House
and Senate have already agreed on final budgets for DOD and DHS, the
entire $1.8 billion difference between the two chambers is in the nondefense
R&D portfolio. There are
sharp contrasts between the House and the Senate in their treatment
of nondefense R&D agencies, with large increases in Senate
action contrasting with steep cuts in House action, or significant increases
in the Senate contrasting with flat funding in the House. The Senate
appropriations would leave nondefense, non-homeland
security R&D with a 3.1 percent increase rather than the House’s
cut, and even taking out NIH the Senate would give the remaining nondefense
R&D portfolio a 2.6 percent increase rather than the House’s 2.3
percent cut.
As congressional
negotiators head into November attempting to bridge differences between
House and Senate budget proposals, it is clear that enacted increases
for defense and homeland security within a tight total congressional
budget target of $820 billion for all appropriations are squeezing funding
for domestic programs. The House and the Senate are bound by the same
target, but the Senate has given itself an extra $10 billion or so for
domestic programs through the use of accounting maneuvers and ‘emergency’
spending outside the target, which combined with the Senate’s traditionally
more favorable attitude to R&D funding let the Senate propose increases
for the same R&D programs that the House felt compelled to cut.
Whether the Senate’s proposed increases will survive in the final budget
depends on whether the House will agree to all or part of the extra
$10 billion the Senate has proposed.
FY 2005 R&D in House and Senate Appropriations
In November, the House and
the Senate will have to resolve hundreds of differences between their
proposed appropriations for domestic programs. Hanging in the balance
are large differences between House and Senate appropriations for R&D
programs, with many programs caught between a large cut in the House
and a large increase in the Senate. This analysis focuses mostly on
Senate action on R&D appropriations because of more recent Senate
action on these appropriations, and Tables 1,
2, and 3
provide details of Senate R&D appropriations, except for DOD and
DHS, which reflect final congressional action. (For details of House
appropriations for FY 2005 R&D, see the August Status Report.)
- Defense R&D climbs to another record high in FY 2005. In August,
the President signed into law a bill that provided $70.3 billion for
the DOD R&D investment, a $4.7 billion or 7.1 percent increase.
Congress rebuffed Pentagon efforts to cut DOD’s long-term investments,
and instead approved a record $13.6 billion for DOD’s “S&T” investments
in basic and applied research and early technology development, an increase
of 8.0 percent (see Table 1).
Figure 1. (click
on the image to view or download a full-size PDF version of the chart)
- Homeland security R&D also received large increases for FY 2005.
Just yesterday (October 18), the President signed into law a final DHS
budget that provides $1.2 billion for DHS R&D activities in FY 2005,
a 20 percent boost over last year (see Table
1).
- Most of the other R&D funding agencies face large differences between
House and Senate proposals for their R&D programs, and all of them
will have to wait weeks or months to receive their final budgets.
The final outcome will depend on how the House and the Senate resolve
their differences, but the traditional tactic of splitting the difference
will leave many agencies with flat or declining funding. As shown in
Figure 1, the difference between the two chambers can be considerable,
especially with the Department of Commerce (a 16 percent House cut vs.
a 18 percent Senate increase), and agencies such as the National Science
Foundation (NSF), the National Aeronautics and Space Administration
(NASA), and the Department of Transportation (DOT) are caught between
House cuts and Senate increases. Even agencies slated for increases
in both chambers, such as NIH, would see their funding growth fall short
of recent increases.
- The federal investment in nondefense R&D
would increase by $1.8 billion or 3.3 percent to $57.8 billion in the
Senate budget, $600 million more than the request and $1.8 billion
more than the House. Nondefense R&D minus
DHS would increase 3.1 percent, in contrast to a 0.1 percent House cut.
- Within the
Senate nondefense total, there would be a modest increase for biomedical
research at NIH of 3.9 percent; excluding the NIH increase, the remaining
nondefense R&D portfolio encompassing investments in space,
general science, energy, commerce, agriculture, transportation, environment,
international missions, and homeland security would increase 2.6 percent
to $29.5 billion, a sharp contrast to the House plans which would cut
these investments by 2.3 percent (see Table
1).
- The Senate would break sharply from the House in funding for NASA, NSF,
and Commerce. Faced with severe self-imposed budget constraints
and competing priorities, the House would slash NASA R&D by 6.2
percent down to $10.2 billion, eliminating new funding for a human return
to the moon and then Mars, but the Senate would use $800 million in
‘emergency’ funding to boost NASA R&D by 0.5 percent to $11.0 billion
and preserve most of the moon and Mars programs. While the House would
cut NSF R&D by 0.9 percent, the Senate would match the request for
a 2.9 percent increase; the House would eliminate the Advanced Technology
Program and cut other programs to bring Department of Commerce R&D
16 percent below this year’s funding level, but the Senate would provide
substantial increases for ATP and other programs to boost total Commerce
R&D by 18 percent to a record-breaking $1.3 billion.
- The federal basic and applied research portfolio would increase 3.8
percent in the Senate plan with the increases spread across the defense,
biomedical, homeland security, and other research portfolios (see Table
2). By contrast, the House’s 1.1 percent increase would be due to
increases in defense and homeland security research offsetting cuts
in the rest of the federal research portfolio. The federal research
portfolio (basic and applied research) would total $57.7 billion in
FY 2005 under the Senate plan, $2.1 billion more than last year and
$1.5 billion more than the House plan (see Table
2). Half of the increase, as well as half the total research funding,
would go to the NIH’s support of biomedical
research, totaling $27.9 billion in the Senate for an increase of $899
million (up 3.3 percent). Already enacted are an 8.4 percent increase
for DOD support of research to $6.8 billion and a near-tripling of DHS’
fledgling research effort to $467 million. There are large differences
to be resolved: the Senate would boost NSF research funding across a
broad range of disciplines by 4.4 percent to $3.9 billion, while the
House would cut it by 1.6 percent; Commerce support of environmental,
engineering, and physical sciences research would soar 17 percent in
the Senate and plummet 14 percent in the House.
- The current focus on defense and homeland security would result in large
increases for defense and justice R&D, and increases in the Senate
or steep cuts in the House for R&D in support of other national
missions (see Table 3). Defense
R&D (including DOD, DOE’s defense activities,
and a portion of the DHS R&D portfolio) would rise $4.9 billion or 7.0 percent to $75.1 billion for a record
total driven largely by substantial boosts to defense-related development
activities in DOD and DHS. Health R&D, mostly in NIH and its sister
agencies in the Department of Health and Human Services (HHS), would
climb 4.1 percent in Senate appropriations to make up nearly a quarter
(22.9 percent) of the federal R&D portfolio. The majority of DHS
R&D in the cross-cutting area of homeland security would be classified
under the justice mission; justice R&D would increase 11.8 percent
to $742 million.
Agency Highlights in FY 2005 House and Senate R&D Appropriations So
Far
(For details
on individual agency appropriations, please see the agency R&D Funding
Updates on the AAAS R&D Web
site. The on-line version of this document contains links.)
- The Senate would add $373 million to the FY 2005 request and House appropriation
for the National Institutes of Health (NIH)
for a total NIH budget of $29.1 billion, a 3.9 percent or $1.1 billion
increase. Most NIH institutes would receive increases between 3.4
and 4.6 percent, in contrast to a range of 2.8 and 3.3 percent in the
House plan. The additional Senate funds would fall short of the amounts
necessary to change NIH estimates that the total number of NIH Research
Project Grants (RPGs) would barely increase
next year by 1.4 percent; the number of new grants would rise slightly, but only back to last
year’s level after falling this year. The RPG proposal success rate
would fall to 27 percent in 2004 and stay there in 2005, down from 30
percent last year. The additional Senate funds could, however, let the
average grant size rise 2 percent, above the 1 percent allowed for in
the request and House appropriation but still below the 3.5 percent
expected inflation rate for biomedical research.
- Congress finalized a record-breaking $70.3 billion for R&D in the
Department of Defense (DOD) in FY 2005,
$4.7 billion more than this year for a 7.1 percent increase (see Table
1). The big winner in DOD next year will be the missile defense
program. Funding for development in the Missile Defense
Agency (MDA) jumps 16 percent to $8.8 billion in preparation for initial
deployment of national missile defenses this year. DOD support
of basic and applied research is also a winner: basic research (“6.1”)
will gain 6.1 percent to $1.5 billion, in contrast to steep cuts in
the Pentagon request (see Table 2). Applied research (“6.2”) gains 9.6
percent to $4.8 billion, again in contrast to requested cuts. DOD “Science
and Technology” (S&T) increases by $1 billion or 8.0 percent to
an all-time high of $13.6 billion in FY 2005. “S&T,” which includes
research, medical research, and technology development, comfortably
exceeds 3 percent of the total DOD budget of $401 billion.
- Yesterday (October 18),
President Bush signed into law a
final FY 2005 budget for
the Department of Homeland Security (DHS) that
gives the new department an R&D portfolio of $1.2 billion, up $206
million or 19.9 percent after an even larger increase the year before
(see Table 1).
Congress added funds to the DHS request for university programs,
interoperable communications, shipping container security, and air cargo
security technologies. Compared to FY 2004, the largest DHS R&D
increase goes to biological countermeasures, including funds for construction
of a new biodefense laboratory. In addition to the R&D portfolio,
DHS has already received $885 million in FY 2004 and $2.5 billion in
FY 2005 for Project BioShield, a procurement
program to purchase biodefense countermeasures
that is designed to encourage private-sector biodefense
R&D investments.
- The House and Senate are $1.2 billion apart in their plans for the NASA
budget. The Senate would rely on $800
million in emergency funding to shore up the FY 2005 NASA budget for
a total NASA budget of $16.4 billion, $1 billion or 6.5 percent more
than FY 2004, with most of the increase going to returning the Space
Shuttle to flight in spring 2005. NASA R&D, which excludes the Shuttle,
would stay even at $11.0 billion (up 0.5 percent; see Table
1). By relying on emergency funds, the Senate would be far more
generous than the House’s proposal to cut
funding for NASA down to $15.1 billion and NASA R&D by 6.2 percent
through the elimination of proposed programs to get the new moon-and-Mars
missions underway. The Senate would fund most of the moon-and-Mars programs,
though not at the levels proposed by NASA. In the Senate, NASA’s
support of basic and applied research would fall 8 percent, primarily
from a delay of moon-and-Mars programs and the delay of some Space Station
research due to the grounding of the Shuttle, but this would be an improvement
over the House’s plans to cut NASA research by 18 percent. The Space
Science program would emerge a winner among science programs in the
Senate bill with $4.3 billion, up 9.3 percent, an increase due mostly
to $300 million in emergency funds allocated to a repair mission for
the Hubble Space Telescope.
- The
Senate and the House are also far apart in their plans for the National Science
Foundation (NSF) budget next year, with the Senate proposing an
increase and the House a cut. In sharp
contrast to a House proposal to cut the National Science Foundation
(NSF) budget next year, the Senate would match the request for an NSF
budget of $5.7 billion in FY 2005, 3.0 percent more than the current
year. In contrast to the House proposal to cut most research directorate
budgets, the Senate would allow for modest increases in the research
directorates. NSF’s R&D funding would total $4.2 billion in FY 2005 in the Senate
plan, a 2.9 percent increase (see Table 1).
- The largest gap between House cuts and Senate increases would be for R&D
in the Department of Commerce. The Senate would draw a sharp contrast
with House and Administration plans to cut Commerce R&D, instead
proposing a record-breaking $1.3 billion in FY 2005, a substantial
increase of 17.9 percent or $203 million (see Table 1). The Senate would
boost Advanced Technology Program (ATP) funding to $203 million, in
sharp contrast to Administration and House plans to eliminate the program. The Senate would join the House in tripling funding for the Manufacturing Extension Partnership (MEP) back up
to last year’s funding level. National Oceanic and Atmospheric Administration
(NOAA) R&D would climb dramatically by 21.3 percent to $748 million
in the Senate proposal, again contrasting sharply with House and Administration
plans to cut funding. The Senate would respond to the recent U.S. Commission
on Ocean Policy report by dramatically boosting NOAA funding of ocean-related
research, and would also create a new NOAA scholarship program to encourage
U.S.
citizens to study oceanic and atmospheric science. The National Institute
of Standards and Technology’s (NIST) intramural laboratory R&D programs
would be one of the few R&D programs to do well in both the House
and Senate plans.
- Department of Transportation (DOT) R&D funding
is also caught between House cuts and Senate increases. DOT R&D
would increase 1.6 percent to $719 million in FY 2005 in the latest
Senate budget bill (see Table 1).
The Senate proposal would be less than a larger 6.7 percent increase
requested by the Bush Administration, but would be well above the sharp
cuts contained in a House proposal.
- The House would give $8.9 billion for R&D in
the Department of Energy in FY 2005, an increase of $141 million
or 1.6 percent that would barely stay ahead of inflation (see Table
1). DOE’s Office of Science would have an
R&D budget of $3.3 billion in FY 2005, a boost of 4.4 percent or
$141 million in contrast to a requested cut. The House would add funds
for high-performance computing research, domestic fusion research, increased
operating time at user facilities, and nanoscale
science but would refrain from the traditional addition of earmarked
projects. DOE’s energy R&D programs would decline 8.3 percent to
$1.3 billion. The Senate has not drafted the bulk of DOE’s
budget; all Senate figures for DOE in this analysis assume the President’s
request.
- The House and Senate do agree on some R&D budgets, including $2.4
billion for the U.S. Department of Agriculture’s
(USDA) R&D in FY 2005, a substantial increase of 6 percent in
contrast to a requested cut (see Table 1). Nearly
the entire increase would go to laboratory construction projects, leaving
basic and applied research even with this year. Both the House and Senate
would add more than $200 million to the Administration’s request, mostly
to reinstate earmarks that USDA had proposed to eliminate, including
$109 million in the Senate for Special Research Grants. The Senate would
provide $183 million for the National Research Initiative of competitively
awarded extramural research grants, up more than 10 percent from last
year. While the Senate would provide only $122 million, the House would
fully fund the requested $178 million to complete animal research and
diagnostic facilities at the National Centers for Animal Health in Ames,
Iowa.
- The U.S. Geological Survey (USGS) would see virtually no change in its R&D budget for FY 2005 under
both the House and Senate plans. The Senate proposed $547 million
for USGS R&D in FY 2005, unchanged from last year and just $1 million
less than a House plan (see Table 1). In
keeping USGS funding flat, both the House and the Senate would reverse
many of the Bush Administration’s proposed cuts to geology and water
research programs; all four USGS divisions would see their R&D funding
essentially unchanged from FY 2004.
- The Senate has drafted an Environmental Protection
Agency (EPA) budget for FY 2005 that would cut the agency’s R&D
budget by 2.0 percent or $12 million to $604 million, a more generous
allocation than the deeper cuts contained in the agency request and
the House’s budget plan because of added Senate earmarks (see Table 1).
The Senate would be generous with EPA’s total budget, providing an increase
of $135 million to $8.5 billion in contrast to steep cuts in the EPA
request and the House plan.
- R&D in the Department of Veterans Affairs (VA) would decline 6.1 percent
to $770 million in FY 2005 in the House (see
Table 1), with the House agreeing to the VA’s request. The Senate
would keep funding at last year’s level of $820 million. All VA R&D
is performed in-house in the VA network of labs and hospitals and is
focused on biomedical research with relevance to the veterans’ medical
needs.
Policy Context and Budget Outlook
The U.S. Treasury recently reported that last year’s (FY 2004) federal budget
deficit was a record-breaking $413 billion, up from the previous record
of $375 billion the year before. Although the budget deficit has
not emerged as an election-year political issue, the sheer size of federal
borrowing has resulted in pledges from policymakers, both Republican
and Democrat, to try to get the deficit under control in future years,
beginning in FY 2005.
Within this fiscal environment,
restraint on discretionary spending and thus federal R&D is likely
to be the final result of the FY 2005 appropriations process. With a
Republican majority in both chambers determined to stick to an $820
billion discretionary spending total that would allow for increases
in defense and homeland security but flat funding at best for all other
programs, it would take the last-minute infusion of billions of dollars
in additional funds to win increases for R&D agencies such as NSF
and NASA. Although the Senate resorted to just such an infusion of approximately
$10 billion, fiscal conservatives in the House are expected to fiercely
resist these accounting maneuvers in House-Senate negotiations. The
difference between the House-proposed R&D cuts and Senate-proposed
R&D increases will be decided by the larger decision to accept,
reject, or modify these additional Senate funds.
The most likely scenario is that
Congress will attempt to hurriedly wrap up appropriations and other legislative
matters beginning November 16 in the one week before Thanksgiving (November
25). To do so, at least 5 and probably all 9 remaining appropriations bills
will be rolled into a single omnibus appropriations bill negotiated behind
closed doors and pushed through both chambers in frenzied late-night sessions.
But depending on the outcome of the November elections, this scenario could be
derailed in any number of ways, and Congress could be forced to keep working on
appropriations into December. But it is just as likely that, like the past two
budgets, Congress may leave the budget as unfinished business for January, or
Congress may give up entirely and pass a year-long CR that would leave agencies
with last year’s budgets for all of FY 2005. Either way, agencies and the
scientists and engineers they support could spend weeks or months waiting for
their final FY 2005 budgets, and with the House and
Senate so far apart in many areas they will wait with no idea how much key
R&D programs will eventually receive.
(This analysis is a progress report on FY 2005 House and Senate
appropriations so far in the budget process. The complete series of
AAAS R&D Funding Updates, including continually updated analyses
of R&D by agency in FY 2005 appropriations, is available on the
AAAS R&D Web Site (http://www.aaas.org/spp/rd)
in the "FY 2005 R&D" or the "What's
New" sections.)
- October 19, 2004
AAAS R&D Budget and Policy Program
American Association for the Advancement of Science
1200 New York Ave, NW
Washington, DC 20005
(202) 326-6607
science_policy@aaas.org
http://www.aaas.org/spp/rd
Go to Tables
1-3
.
