(This analysis is a progress
report on FY 2006 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 2006 appropriations,
is available on the AAAS R&D Web Site (http://www.aaas.org/spp/rd)
in the “FY 2006 R&D” or the “What’s
New” sections.)
Fiscal year (FY) 2006 began on
October 1, but the FY 2006 budget is far from finished and the prospects for
federal research and development (R&D) funding are uncertain. The
burgeoning costs of responding to Hurricanes Katrina and Rita have not only
delayed the FY 2006 appropriations process but have also set off a scramble to
find offsetting domestic spending cuts that could hit R&D programs.
As the
new fiscal year begins, the House and the Senate have drafted their
separate versions of all the appropriations bills, but have come to
agreements on final budgets for only the Departments of Homeland Security
and the Interior, and the Environmental Protection Agency (EPA). All
the other R&D funding agencies are still waiting for their final
budgets, and are operating through November 18 at the lowest of the
FY 2005, House-approved, or Senate-approved funding levels while House-Senate
conference committees iron out differences between House and Senate
bills. Most agencies are likely to still be waiting in November or December
because of a crush of other legislative business, including a Supreme
Court nomination, disaster relief, and a reconciliation bill to cut
taxes and entitlements spending.
Based on
appropriations action so far, the Senate would increase the total
federal R&D investment by 2.3 percent or $3.0 billion to $135.6
billion in FY 2006, but nearly the entire increase would go to weapons
development and the National Institutes of Health (NIH; see Table
1). For nondefense R&D, the Senate
total of $58.6 billion would be a 3.7 percent gain, dominated by a proposed
increase for biomedical research at NIH. Both totals would be more than
the House appropriations bills would provide, and more than the President’s
request from February, but final appropriations are likely to be closer
to House proposals than Senate proposals. Major differences between the House and the Senate
continue to be NIH and the Department of Commerce: the Senate would
give NIH nearly $900 million more for its FY 2006 budget than the House
or the Bush Administration for a 3.7 percent increase as opposed to
a 0.5 percent increase (House and Administration), and the contrast
for Commerce R&D could not be sharper than a 11 percent increase
in the Senate plan against a 21 percent CUT in the House (see Figure
1). The Senate would provide more R&D funding than the House for
many other agencies, also. Looking only at the federal research portfolio
(excluding development and R&D facilities), the Senate is on track
to provide nearly $58 billion for basic and applied research, a 3.4
percent gain that would be $1.1 billion more than the House, again primarily
because of NIH and Commerce. Yet these Senate-proposed increases are
threatened as budget negotiations drag on.
Figure 1. (click
on the image for PDF version)
Most R&D funding agencies are still in
line to receive flat funding or modest increases falling short of inflation
in their R&D portfolios, but are likely to end up closer to the
more modest House proposals than the Senate proposals (see Tables 1 and
3, and Figure 1). In their final budgets,
the Department of the Interior and EPA receive modest increases short
of the 2.0 percent inflation rate for their environmental R&D portfolios,
in contrast to the requested cuts proposed by the Administration. The
Department of Homeland Security (DHS) just received a modest increase
in its final R&D budget that falls well short of the double-digit
percentage gains of past years. The Department of Energy’s (DOE) Office
of Science (OS), a key supporter of the physical sciences, would receive
an increase slightly more than 1 percent in separate House and Senate
plans instead of a requested cut. And NIH is likely to end up closer
to the House’s 0.5 percent increase than the Senate’s 3.7 percent boost,
the first time in more than two decades that the NIH budget would fail
to keep pace with inflation.
Even the National Aeronautics and Space
Administration (NASA), the unambiguous winner so far in the appropriations
process, is now likely to see flat or declining funding for its R&D
programs because of
troubles with the recent Space Shuttle launch. Both the House and
the Senate drafted increases greater than 7 percent for NASA R&D
before the Shuttle’s July 26 return to flight, but NASA’s scrubbing
of future launches until at least May 2006 to correct safety problems
discovered during the launch and also the costs of repairing hurricane-damaged
NASA facilities threaten to once again divert R&D money to the non-R&D
Space Shuttle program in 2006, just as in previous years.
Highlights of FY 2006 R&D in House and Senate Appropriations
Congress is still working through the FY
2006 appropriations process to determine program-by-program funding
allocations for R&D programs for the fiscal year which began on
October 1. The House of Representatives has approved all (11) of its
appropriations bills but the Senate has proceeded more slowly, approving
only 8 bills (out of 12) and finally drafting the last of its 12 bills
this week. In August, President Bush signed into law two of the bills,
including the bill funding Interior and EPA, and the bill funding DHS
should be ready for his signature this week. This analysis focuses on
House and Senate action so far in the appropriations process, including
final action on DHS, EPA, and Interior. Tables 1
and 2 provide details of Senate FY 2006
R&D appropriations, while Tables 3
and 4 provide details of House action.
- The Senate would give $135.6 billion for the total federal R&D portfolio
in 2006, an increase of $3.0 billion or 2.3 percent and a $3.3 billion
boost over the request (see Table 1). Nearly
the entire increase would go to DOD weapons development (up $1.8 billion)
and NIH (up $1.0 billion), leaving all other federal R&D essentially
flat. The House would provide slightly less with $135.0 billion (see
Table 3), but DOD weapons development would make up 89 percent of
the $2.5 billion increase, leaving most R&D funding agencies including
NIH with flat funding or cuts.
- In nondefense R&D, the Senate total of
$58.6 billion, an increase of $2.1 billion or 3.7 percent, would be
$1.6 billion more than the comparable House appropriation, leaving big
differences to resolve in coming weeks (see Tables 1 and 3). NIH
and Commerce account for most of the difference: the Senate would use
accounting tricks to boost the NIH budget to $29.6 billion for a 3.7
percent gain, roughly $900 million more than the House and the request,
while the Senate Commerce R&D appropriation of $1.3 billion (up
10.8 percent) compares to the House’s 20.6 percent cut.
- The Senate’s federal research
portfolio (basic and applied) would be $57.8 billion, 3.4 percent or
$1.9 billion more than last year and $2.6 billion more than the request
(see Table 2), but the final results
are likely to be closer to the House’s $56.7 billion research total,
up just 1.4 percent (see Table 4). The majority of the Senate’s boost is due
to the Senate’s generosity toward NIH and Commerce.
- So far, congressional appropriators have added
funds to turn requested cuts into modest increases for key R&D programs,
but these gains are threatened in the post-hurricane search for domestic
spending cuts. Both the House and the Senate would add roughly $200
million to the request for DOE’s Office of
Science to turn a proposed cut into a slight increase over this year,
with an emphasis on sustaining operating times at DOE scientific user
facilities and protecting domestic fusion research. The final budgets
for the U.S. Geological Survey (USGS) in Interior and EPA show modest
increases for their R&D funding (2.5 percent for USGS, 1.2 percent
for EPA) in contrast to requested cuts.
- Other R&D
funding agencies would see little to no change in funding because of
the tight fiscal environment. The House would provide the $28.7
billion request for the NIH, but the 0.5 percent increase would be the
first time in 24 years that the NIH budget would fail to keep pace with
inflation for the economy as a whole (see Table 3). While the Senate’s
$1 billion increase would be far more generous, it relies on accounting
tricks that the House is unlikely to accept.
FY 2006 Appropriations in Historical Context
Despite some potential gains because of generous Senate appropriations,
the latest congressional budget plans would still leave most nondefense R&D programs with flat or declining budgets
for more than a decade, and even biomedical and homeland security research
funding could level off after strong recent gains. After record-breaking
increases, defense R&D could level off in 2006, and defense funding
of basic and applied research could decline steeply.
Figure 2. (click
on the image for PDF version)
Figure 3. (click
on the image for PDF version)
For nondefense R&D,
the House’s 1.0 percent increase would fall behind the 2.0 percent expected
rate of inflation but the Senate would boost the investment by 3.7 percent.
As Figure 2 incorporating Senate FY 2006 proposals shows, nondefense R&D investments peaked in FY 2004,
primarily because of the completed campaign to double the NIH budget
between 1998 and 2003 and also because of the creation of DHS to
fund new homeland security research. All the other nondefense
R&D funding agencies collectively have seen their budgets barely
increase over the past decade. Increases up to 2003 served only
to recover the lost ground of the mid-1990s, but since 2003 these investments
have lost ground to inflation. These non-NIH agencies, combined with
DOD’s research investments, fund nearly all of the federal investment
in the non-biomedical sciences, including the physical sciences, non-medical
life sciences, environmental sciences, engineering, mathematics, computer
sciences, and social sciences. The FY 2006 Senate appropriations would
keep non-NIH R&D ahead of inflation, but these gains are threatened
by NASA’s shuttle troubles and the strong probability that the House
will not go along with the Senate’s big boosts to Commerce R&D.
For biomedical research, NIH R&D would decline after hitting new
highs in the immediate post-doubling period if the House appropriation
prevails. The slight rise in Figure 2 shows the Senate’s $1 billion
NIH increase, which is unlikely to be sustained in conference.
For defense R&D, large increases in recent years have
boosted federal investments to record levels (see Figure 3), but nearly
all of the additional resources have gone to weapons development programs
(“Other DOD R&D 6.4 –” in Figure 3). DOD’s investments in “S&T”
(basic and applied research plus technology development) hit an all-time
high in 2005, but just barely after taking nearly two decades to recover
from post-Cold War cutbacks. Although the Pentagon’s draconian 22 percent
cut in DOD S&T is unlikely to prevail, House and Senate appropriators
are likely to leave DOD’s investments well below 2005 levels. DOD investments
are a large part of the federal investments in engineering, physical
sciences, mathematics, and computer sciences research.
The
combination of modestly increasing funding for nondefense
R&D agencies and likely cuts in DOD research would leave the federal
basic and applied research investment with a slight increase in the
Senate plans, but final appropriations could show flat or declining
funding. As shown in Figure 4, the federal research investment peaked
in FY 2004, primarily because of the NIH doubling campaign but also
because of budget increases for NSF and other nondefense agencies in a time of budget surpluses. But with
record-breaking budget deficits and consequent restrictions on domestic
spending, federal research investments fell in FY 2005. Although these
research investments would recover in FY 2006 in the Senate plan because
of large NIH, NASA, and Commerce increases, all of these boosts are
threatened in this fall’s negotiations. If the final FY 2006 appropriations
bills trim or eliminate proposed Senate increases for these agencies,
then the federal research investment would continue to fall across all
disciplinary groups.
Figure 4.
(click on the image for PDF version)
Agency Highlights in FY 2006 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. Most of the highlights below are unchanged from the earlier
August status report. The on-line version of
this document contains links.)
- The House
has approved an FY 2006 budget for the National
Institutes of Health (NIH) that would
essentially agree to NIH’s request for $28.7
billion next year, an increase of $143 million or 0.5 percent. NIH R&D
would rise 0.5 percent to $27.9 billion, failing to keep pace with general
inflation for the first time in 24 years (see Table 3). The Senate would
add $1 billion to the NIH budget for a total of $29.6 billion, a boost
of 3.7 percent, but the increase depends on shifting a program payday
from FY 2006 to FY 2007 and other accounting tricks that the House is
unlikely to accept. Most NIH institutes would receive increases between
2.8 and 3.8 percent in the Senate plan.
- The Senate has just drafted a Defense appropriations bill that would provide
$72.4 billion for R&D in the Department of Defense (DOD) in fiscal year (FY) 2006, nearly $1 billion more than in 2005 for
a 1.2 percent increase in contrast to a requested cut (see Table 1).
The House would provide slightly more than the Senate. The Senate joins
the House in rejecting steep requested cuts to DOD’s “Science and Technology” (S&T) programs for
a total of $12.7 billion. S&T,
which includes research, medical research, and technology development,
would have declined 22 percent in the Pentagon
request, but the Senate cut would be 7 percent. The Senate action would
bring S&T funding to 3.15 percent of the regular DOD budget. The
Defense Advanced Research Projects Agency (DARPA) budget would fall
1.8 percent to $2.9 billion because of Senate concerns over the military
relevance of its portfolio.
- The National Aeronautics
and Space Administration (NASA) will find its budget squeezed again
next year. Although the Space Shuttle returned to flight in July,
continuing safety concerns related to foam insulation have pushed back
the next shuttle flight to May 2006. The need to fund ongoing safety
upgrades and to repair damaged NASA Gulf Coast facilities will further
strain an already tight budget that must accommodate NASA’s recently
announced detailed plan to return humans to the moon by 2018 as well
as NASA’s other science-related programs. In the latest Senate plan,
drafted in July before the shuttle launch and the hurricanes, the total
NASA budget of $16.4 billion would have been a $200 million or 1.2 percent
increase, but NASA’s R&D funding would have climbed 7.1 percent
in FY 2006 as an expected decline in Shuttle costs freed up money for
NASA’s R&D programs (see Tables 1 and 3). But the need to keep spending
money on Shuttle safety well into 2006 could result in a repeat of this
year’s budget, when NASA transferred money from R&D accounts to
the Space Shuttle and even imposed mid-year cuts. The large House and
Senate increases are threatened and could be threatened even more depending
on whether NASA receives emergency funds for hurricane recovery or whether
repair costs will come out of the regular budget. Under the earlier
Senate and House plans, the agency would have received additional resources
for its ambitious plans to finish construction of the International
Space Station and develop the technologies needed for future moon and
Mars missions, but there would also have been steep cuts in NASA’s aeronautics
research portfolio, the earth sciences portfolio, and biological and
physical research. Those cuts could become even steeper in the final
NASA appropriation.
- The Senate
would provide $8.9 billion for R&D in the Department
of Energy (DOE) next year, a 3.1 percent boost over FY 2005
in contrast to a requested cut of nearly 2.6 percent (see Table 1).
Both the House and the Senate would add roughly $200 million to the
request for DOE’s Office of Science (OS) for
a gain of 1.3 percent in the Senate and 1.5 percent in the House to
$3.4 billion, both dramatic improvements over a requested cut of 4.5
percent. Energy-related R&D would rise dramatically in both the
House and Senate appropriations to support Administration priorities
in hydrogen, coal, and nuclear energy R&D strongly while at the
same time sustaining DOE investments in other energy R&D areas.
- The National
Science Foundation (NSF) budget, after
declining in 2005, would barely increase by 1.1 percent to $5.5 billion
next year in the latest Senate plan, falling short of the $5.6 billion
in the House and Administration proposals and even falling short of
the $5.6 billion NSF had last year. NSF’s total R&D funding would
increase just 1.6 percent to $4.1 billion (see Table 1), falling short
of the 2.0 percent expected inflation rate, while the House would go
just above it with a 2.6 percent boost (see Table 1). Most NSF research
directorates would receive increases between 1 and 3 percent in 2006,
which would barely bring their budgets back to last year’s levels.
- The final Department
of Homeland Security (DHS) budget for FY 2006 provides $1.3
billion for R&D, a 4.1 percent increase that slows recent growth
in the DHS R&D portfolio (see Table 1). R&D to develop countermeasures
against weapons of mass destruction continues to dominate the DHS R&D
portfolio. The final DHS budget contains $212 million for radiological
and nuclear countermeasures R&D (nearly double 2005 funding), including
a new Domestic Nuclear Detection Office (DNDO). The largest portfolio
continues to be biological countermeasures with $380 million. There
are large increases for R&D on more conventional threats, including
$44 million for explosive countermeasures (more than double 2005 funding),
$110 million for R&D to counter portable anti-aircraft missiles
(up 80 percent), and $41 million for critical infrastructure protection
R&D. But to offset increases in priority areas, there are cuts in
other areas of the DHS R&D portfolio. The DHS budget is expected
to be signed into law by mid-October.
- The House
and the Senate could not disagree more strongly on R&D funding in
the Department of Commerce. In a sharp
reversal from a 20.6 percent cut in the House appropriation (see Table
3) and a similar one in the request, the Senate would dramatically increase
Commerce R&D by 10.8 percent to $1.3 billion in FY 2006 (see Table
1). The Senate would keep the Advanced Technology Program (ATP) funded
at this year’s budget of $140 million next year, in sharp contrast to
House and Administration plans to eliminate it. The House would slash
National Oceanic and Atmospheric Administration (NOAA) R&D by 23
percent, while the Senate would boost it by
6.5 percent to $693 million (see Table 1). The House and the Senate
would agree, however, to sustain the non-R&D Hollings Manufacturing
Extension Partnership (MEP) program at $106 million, in contrast to
a requested cut of almost two-thirds. Because the CR through November
18 would fund programs at the lowest of the House, Senate, or FY 2005
levels, both NOAA and NIST must reduce their spending dramatically this
month to House levels, even as they hope for a better outcome in the
final budget.
- The U.S.
Department of Agriculture (USDA), enjoying a record R&D
portfolio this year, would see its R&D funding fall by 1.3 percent
in the latest Senate budget plan and 7.4 percent in the House plan (see
Tables 1 and 3). Both proposals would be far higher than Administration
proposals for cuts of 14.6 percent. Both the House and the Senate would
add to the request to restore earmarked intramural research, construction,
and extramural research projects that the request proposed to delete.
Both the House and the Senate would reject USDA’s proposals to slash
formula funds in its extramural research portfolio, and both would keep
Hatch Act formula funding for land-grant colleges at $179 million.
- Congress finished the Environmental
Protection Agency (EPA) budget before
the August recess. EPA’s R&D budget increases slightly by 1.2 percent
to $579 million in FY 2006 (see Table 1). Because of a reduction in
congressional earmarks, most EPA R&D programs are set to receive
increases.
- Congress has
come to an unusually early agreement on a final budget for the Department
of the Interior. Interior R&D totals $620 million in FY 2006,
a slight gain of 0.8 percent. Congress reverses proposed cuts to R&D
in the U.S. Geological Survey (USGS) and instead agreed on a
2.5 percent increase to $555 million (see Table 1), primarily by restoring
funds for minerals research.
- Both the House
and the Senate once again reject the Department
of Veterans Affairs’ (VA) proposal to reorganize its budget
to fully report all costs associated with its R&D portfolio, including
support and personnel costs. VA federal R&D would total $805 million
in the Senate plan, up 2.7 percent from this year and a similar boost
over the House and requested appropriations.
- Department
of Transportation (DOT)
R&D funding would total $742 million in the latest Senate plan,
a slight cut of 0.3 percent (see Table 1) compared to a steeper cut
in the House.
Budget Outlook and Next Steps
Although FY 2006 started on October 1, Congress is still a long way from
completing the FY 2006 appropriations process. Only two (Interior and
EPA) of the major R&D funding agencies have received their final
FY 2006 budgets, with another two (DHS and DOD) likely to see their
final budgets signed into law in October. For the remaining domestic
agencies, it could be Thanksgiving or Christmas before their appropriations
become final, most likely in a hastily negotiated omnibus appropriations
bill or a year-long continuing resolution (CR; temporary appropriations
bill). For now, agencies are operating under a CR through November 18
that temporarily allows them to spend money at the FY 2005, Senate-proposed
FY 2006, or House-proposed FY 2006 funding levels, whichever is the
lowest. While the CR allows most agencies to continue operating normally,
some agencies such as Commerce whose budgets would be slashed in House
appropriations must dramatically curtail spending as they wait for a
final budget.
Although the outlook for R&D funding looked brighter than expected in
August because of relatively generous Senate appropriations, the costs
of responding to Hurricanes Katrina and Rita have changed the federal
budget situation dramatically in the past month. Increasing political
pressure to offset Gulf Coast disaster relief spending means that the funding
outlook for R&D programs could get worse the longer the budget process
drags on. As hurricane-related costs pile up, the Republican congressional
majority has steadfastly refused to consider repealing tax cuts or enacting
tax increases to pay for increased spending, and instead has tried to
find offsets through cuts in regular domestic spending. So far, the
additional spending for disaster relief, along with additional spending
for Iraq and Afghanistan, has been borrowed. Although the FY 2005 budget
deficit is expected to show a dip from last year’s record $412 billion
when final figures are available later this month, disaster and war
spending are expected to push the FY 2006 deficit to a new high of more
than $500 billion.
A Republican policy group recently released a list of potential offsets
for FY 2006 and beyond totaling $102 billion in savings for FY 2006,
mostly through cuts in domestic programs. The AAAS analysis of the potential
offsets identified $2.6 billion of these savings from nondefense
R&D programs, more than half of which would come from canceling
NASA’s moon-and-Mars missions. Although the largest potential offsets
have been criticized by both Democrats and Republicans, namely potential
delays in the Medicare drug benefit and cancellation of cherished congressional
earmarks, both Congress and the President’s Office of Management and
Budget (OMB) are combing the FY 2006 budget for offsets and some of
the list’s smaller options may yet find their way into law. If so, NASA,
DOE, USDA, and Commerce R&D programs could be in particular danger
as the appropriations process drags on. At the moment, the most realistic
date for finishing FY 2006 appropriations is this December in an omnibus
bill; the FY 2005 omnibus was signed into law last December 8. By then,
after policymakers have settled on an offset target, appropriators may
be ready to make specific spending cuts or to enact a large across-the-board
cut to domestic programs.
But the true test for domestic programs, including nondefense
R&D, could come further into the future. Agencies and the Office
of Management and Budget are well underway in drafting the FY 2007 budget.
Even before the hurricanes, the Bush Administration had already signaled
repeatedly that the FY 2007 budget would cut domestic spending below
FY 2006 levels. If domestic spending is cut even further in FY 2007
to offset disaster relief, or if disaster-related spending is shoehorned
into regular domestic spending, then the FY 2007 budget proposal to
be released next February will feature steep cuts in many domestic programs
that will make the challenges of FY 2006 look easy.
Within this fiscal environment, continuing restraint on
discretionary spending and thus federal R&D is likely to be the
final result of the FY 2006 appropriations process.
- October 4, 2005
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
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