AAAS R&D Funding Update November 2, 2000 -
November Progress Report on R&D in FY 2001 Appropriations

R&D Headed for Record Increases,
but Final Budget Negotiations Break Down

Go to: Table 1. Total R&D by Agency (as of 11/2) Table 2. Estimated Research by Agency (as of 11/2) Table 3. "21st Century Research Fund" by Agency (as of 11/2) PDF version of this document Related sites: AAAS Report XXV: Research and Development FY 2001 (President's Request for FY 2001; full text on line) AAAS R&D Funding Updates for FY 2001 House-Senate Conference Reports: Department of Defense National Institutes of Health (not yet available) Department of Energy National Aeronautics and Space Administration National Science Foundation U.S. Department of Agriculture Department of Commerce Department of Transportation Department of the Interior Environmental Protection Agency

(This progress report is part of a series of AAAS R&D Funding Updates on the FY 2001 congressional appropriations process. This analysis includes information on R&D in FY 2001 appropriations so far. The complete series of AAAS R&D Funding Updates, including continually updated analyses of R&D by agency in FY 2001 appropriations, is available on the AAAS R&D Web Site (http://www.aaas.org/spp/R&D) in the "FY 2001 R&D" or the "What's New" sections.) Although the federal government's fiscal year (FY) 2001 started on October 1, Congress and President Clinton have failed to complete action on FY 2001 appropriations, including federal support for R&D. As of today, only 7 of the 13 appropriations bills have been signed into law, and numerous disputes have stalled progress on the remaining bills. Budget negotiations have all but broken down, and it is now nearly certain that Congress will be forced to stay in session until well after Election Day (November 7) to complete the FY 2001 budget. Federal programs funded through the unfinished appropriations bills have been operating at FY 2000 funding levels under a series of continuing resolutions (CRs; temporary spending bills). Regardless of when all the appropriations bills are signed into law, FY 2001 will prove to be a banner year for federal R&D programs. Congress and the President have agreed to provide record increases for R&D programs throughout the federal government, and have provided substantial increases to nearly all categories of R&D spending and most R&D funding agencies. Total federal R&D will exceed $90 billion for the first time in FY 2001 to reach $91.0 billion, an increase of $7.6 billion over the FY 2000 funding The figures presented in this analysis are preliminary and reflect appropriations action as of November 2. They will be revised in a later AAAS analysis after all appropriations action is complete. Of the 10 largest R&D funding agencies, 8 have received their final appropriations. The Department of Commerce's budget is on the President's desk awaiting an expected veto, but its funding levels are unlikely to change after the veto. The remaining agency, the National Institutes of Health (NIH), is the largest nondefense R&D funding agency and has not received a final budget. But an informal conference agreement (reflected in this analysis) would grant NIH a 15 percent increase in its budget, and this increase will almost certainly be signed into law eventually. Thus, the substantial increases for federal R&D in appropriations action so far are likely to be very close to the final increases. o In FY 2001, total federal support of R&D exceeds $90 billion for the first time, thanks to a record dollar increase of $7.6 billion over FY 2000. Because of across-the-board increases for the entire breadth of R&D programs in the federal portfolio, federal R&D totals $91.0 billion in FY 2001, an increase of 9.2 percent (see Table 1). This total far exceeds the request for $85.4 billion, primarily because Congress plans to give far more for R&D in the Department of Defense (DOD) and NIH, the two largest R&D funding agencies, than requested. o Nearly every major R&D funding agency receives a substantial increase over FY 2000, and most receive even more than the Clinton Administration request (see Figure 1). Of the major R&D funding agencies, only the National Science Foundation (NSF) receives less for R&D than requested, but still receives 13.4 percent more for R&D than in FY 2000. (Details of individual agency R&D appropriations are available on the AAAS R&D Web site, or by clicking on the links in the on-line version of this document.) Figure 1. (click on the image to view or download a full-page version of this chart) o Nondefense R&D increases by more than 11 percent to reach $45.3 billion, a boost of $4.6 billion. In addition to a 15 percent increase in the NIH budget that has not yet become final, there are substantial increases to other nondefense agencies. R&D in the Department of Energy (DOE) increases by 12.5 percent to reach $10.3 billion, including a 14 percent boost to programs in the Office of Science; NSF R&D increases by 13.4 percent to $3.2 billion, with substantial boosts to all the research directorates; and Science, Aeronautics, and Technolgy (SAT) R&D in the National Aeronautics and Space Administration (NASA) increases by nearly 11 percent. o Defense R&D increases by a smaller but still substantial 7.2 percent to $45.6 billion, bringing defense and nondefense R&D near parity for the first time in 20 years. Although defense R&D has exceeded nondefense R&D every year since the defense buildup of the early 1980s, the gap has narrowed in recent years, and nondefense R&D could narrowly exceed defense R&D when FY 2001 action is complete. DOD basic research ("6.1") increases by more than 13 percent, while applied research ("6.2") jumps by 8 percent. Although the Clinton Administration requested a steep cut to DOD's "S&T" investments (basic and applied research plus exploratory development), Congress awarded an 8 percent increase (see Figure 1). DOE's defense R&D continues the gains of recent years with a 12 percent gain in FY 2001, including expanded investments in defense computing and stockpile stewardship activities. o In his budget request, President Clinton placed a strong emphasis on achieving a better balance 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 within the federal research portfolio, the FY 2001 budget proposed large increases for R&D programs in non-life sciences disciplines. Although NIH receives a 15 percent-plus increase for the third year in a row, non-biomedical research also wins big this year. NSF, the only R&D funding agency responsible for the entire range of science and engineering disciplines, with a particular emphasis on fundamental research and non-life sciences disciplines, receives the largest dollar increase in history which translates into a 13.4 percent boost for its R&D programs. DOE's Science programs, which support fundamental research in the physical sciences, receive a 14 percent boost to $3.0 billion. As a result, nondefense R&D excluding NIH increases by 8.0 percent in FY 2001, a smaller increase than NIH's but a sharp contrast to stagnant or declining funding in recent years. In addition, DOD support of basic (up 13 percent) and applied research (up 8 percent), which supports a range of physical sciences and engineering disciplines, also substantially. o Although appropriations action is still incomplete, the Administration's multi-agency initiatives have fared well in the appropriations process, though in general funding levels fall short of the dramatic increases the Administration requested. Because the final allocation of funds within NIH, a major partner in these initiatives, has not been decided, final estimates on these initiatives' budgets are not yet available. The Administration's new Nanotechnology initiative proposed to double funding for existing nanotechnology programs from $247 million in FY 2000 to $495 million in new and continuing programs in FY 2001. NSF's leading role in the initiative was reduced from a proposed $217 million down to $150 million, but this still represents a more than 50 percent boost over the $97 million FY 2000 funding level. DOE and DOD nanotechnology funding was also reduced from the request, but remains well above FY 2000. o The Information Technology R&D initiative is also doing well in the appropriations process: NSF's $215 million for IT Research represents a dramatic jump from $90 million in FY 2000, though it falls short of the $280 million request. NSF also receives funding to construct a second terascale (trillions of operations per second) computing site for $45 million, and receives a 25 percent increase for the budget (including IT research) of the Computer and Information Science and Engineering (CISE) directorate. DOE and DOD contributions to the initiative receive less than requested, but far more than FY 2000. o Basic and applied research are doing spectacularly in FY 2001 appropriations action so far (see Table 2). Federal support of basic research, the majority of which is performed in the nation's colleges and universities, increases by 12.5 percent or $2.4 billion to $21.3 billion, because of across-the-board increases to agencies' basic research-oriented programs, including increases of greater than 10 percent for basic research in NIH, NSF, and DOD. Folding in applied research, total federal support of research (basic and applied) is $41.2 billion in FY 2001, a jump of nearly $5 billion or 12.9 percent over FY 2000. Again, there are across-the-board increases to agencies' research portfolios, with six agencies (NIH, NSF, DOE, DOD, NASA, DOT) slated to receive increases greater than 10 percent. o Nondefense R&D reaches an all-time high in FY 2001, the fifth year in a row that nondefense R&D has increased in inflation-adjusted terms (see Figure 2). Much of the recent increase, however, has been due to steady growth in the NIH budget, including increases of more than 15 percent for three years in a row. As a result, NIH R&D has become nearly as great as all other nondefense agencies' R&D funding combined. Funding for nondefense R&D excluding NIH has stagnated in recent years; after steady growth in the 1980s, funding peaked in FY 1994 and then declined sharply as a result of tight budget conditions in the mid-1990s. After hitting bottom in FY 1996, small increases from FY 1997 through FY 2000 barely kept pace with inflation. The FY 2001 increases for non-NIH agencies, while large, just barely brings these agencies back to the funding levels of the early 1990s, indicating that the push for a more balanced research portfolio still has a long way to go. o The "21st Century Research Fund" is set to rise by 12.6 percent in FY 2001 to $45.1 billion (see Table 3). Most of this increase is due to a 15 percent increase to the total NIH budget, although there are increases for nearly all the programs in the Fund. The Clinton Administration created the Fund to highlight programs that it considers important to the nation's science and technology enterprise. The Fund includes both R&D and non-R&D items while excluding large parts of the federal R&D portfolio (primarily in development). Figure 2. (click on the image to view or download a full-page version of this chart) November Outlook Much remains to be done on FY 2001 appropriations. The House and Senate must reach a conference agreement on the final appropriations bill, the Labor-HHS bill (funding NIH and the Department of Education). Negotiations on the final bill will be complicated because congressional leaders will seek to attach other legislative provisions to it, including possibly a large tax cut bill. President Clinton will seek to add his own legislative priorities, including legislation on immigration. Although there is an informal agreement on most of the funding levels in the bill, negotiations on the overall bill ground to a halt this week over a variety of disputes. It is nearly certain that Congress will be forced into a 'lame-duck' (post-election) session to finish the bill, delaying congressional adjournment until possibly Thanksgiving. Of the other appropriations bills, 7 of the 13 have been signed into law, one (Foreign Operations) awaits the President's expected signature, two (Legislative Branch, Treasury-Postal) were vetoed recently but will be signed with minimal revisions, and two (Commerce-Justice, DC) face an expected veto but could be signed if immigration legislation favored by the President is added to them or to the Labor-HHS bill. The good news for R&D is that despite the delays, the increases for R&D are secure. The problems that remain on the appropriations bills have little to do with funding levels, and other than a little tinkering on the margins congressional appropriators are unlikely to do much to change the funding levels presented in this preliminary analysis. Underlying the good news for R&D programs has been the good news regarding the federal budget surplus. On October 24, President Clinton announced that in FY 2000 (which ended September 30), the federal government recorded a unified budget surplus of $237 billion, the largest surplus ever and the third year in a row of surpluses. At 2.4 percent of Gross Domestic Product (GDP), this is the largest surplus as a share of the economy since 1948. It is nearly double the FY 1999 surplus of $124 billion. The non-Social Security surplus was $87 billion in FY 2000, the second such surplus in a row, and up dramatically from the $1 billion non-Social Security surplus in FY 1999. Not coincidentally, federal R&D support stagnated in the mid-1990s as the President and Congress tried desperately to balance the federal budget, and federal R&D shared in the windfall as the budget quite unexpectedly began running surpluses in FY 1998. Following on the largest budget surplus in history, it is not surprising that lawmakers feel they can afford to be generous to R&D programs, confident that they can spend and spend while still preserving a surplus for FY 2001. Although Congress and President Clinton are still wrangling over the budget, there is now little of the intense fighting between advocates of more spending and advocates of fiscal restraint that characterized the budget battles of a few years ago and even a few months ago. After months of posturing over restrictive funding levels in spring and summer, billions of dollars in spending increases sailed through Congress with little dissent in the fall. While no one knows when FY 2001 appropriations will become final, observers of federal funding for R&D can take comfort in knowing that at least the outcome is now clear. - November 2, 2000 AAAS R&D Budget and Policy Program 1200 New York Ave, NW Washington, DC 20005 (202) 326-6607; -6600 science_policy@aaas.org http://www.aaas.org/spp/R&D

Table 1. Total R&D by Agency
R&D in FY 2001 Appropriations (as of November 2)
(budget authority in millions of dollars)

Table 2. Estimated Research by Agency
R&D in FY 2001 Appropriations (as of November 2)
(budget authority in millions of dollars)

AAAS estimates of basic and applied research in FY 2001 appropriations bills.
All figures are rounded to the nearest million. Changes calculated from unrounded figures.
* HHS and Education FY 2001 Conf. Figures are based on House-approved appropriations.
** NIH FY 2001 Conf. Figures are based on Senate-approved appropriations.
All other FY 2001 Conf. agency figures represent conference report appropriations, and are final.
November 2, 2000 - House-Senate conference funding levels, except as noted.
These funding levels represent appropriations action as of November 2, and will be revised when appropriations are complete.

Table 3. "21st Century Research Fund" by Agency
R&D in FY 2001 Appropriations (as of November 2)
(budget authority in millions of dollars)