This report is a summary of AAAS estimates and
analyses of appropriations in the FY 2005 omnibus bill and final FY 2005
appropriations bills for federal R&D. This report is a preview of
the forthcoming publication Congressional Action
on Research and Development in the FY 2005 Budget (see the last
page).
Next week, Congress and President Bush are likely to
finalize the fiscal year (FY) 2005 budget process and provide a record-setting
$132.2 billion federal research and development (R&D) investment in FY
2005, a $6.0 billion or 4.8 percent increase. 80 percent of the increase goes
to defense R&D programs, primarily for the development of new weapons
systems. The nondefense R&D investment rises by $1.2 billion or 2.2 percent
to $57.2 billion, better than the 1 percent increase overall for domestic programs
but far short of increases in previous years. Most R&D funding agencies see
modest increases, but the National Science Foundation (NSF) sees its recent
gains reverse with a cut in its R&D funding. If the Bush Administration
follows its deficit reduction plan outlined earlier this year, the next few
years could see cuts for most R&D funding agencies.
On November 20, Congress drafted a FY 2005 omnibus
spending bill and approved it hours later. But procedural glitches to
correct some provisions in the 3,000 page bill could delay final congressional
approval of the bill until December 6; President Bush is expected to
sign the bill into law on December 8, completing the FY 2005 budget
process. The omnibus appropriations bill bundles together 9 of the 13
FY 2005 appropriations bills; the other bills providing funding for
the Departments of Defense (DOD) and Homeland Security (DHS) were signed
into law earlier. The omnibus bill throws together $388 billion in discretionary
spending and is filled with budgetary tricks to fit under congressional
budget targets, including a 0.80 percent across-the-board cut for all
programs in the bill. In FY 2005, domestic discretionary programs face
a new austerity of flat funding overall after several years of generous
annual increases.
Highlights of Federal R&D in FY 2005
(All figures are adjusted to reflect an across-the-board cut of 0.80 percent
for most agencies, and additional across-the-board cuts for selected
agencies in the omnibus bill and other bills.)
- The federal investment in research and development (R&D) hits a new record
of $132.2 billion in FY 2005, a $6.0 billion or 4.8 percent increase
over FY 2004 (see Table 1 and Figure 1). Congress provided $1.5 billion
more than the Bush Administration request, entirely on the defense side
of the portfolio. This is the ninth year in a row that the federal R&D
investment has increased in real (inflation-adjusted) terms (see Figure
1).
Figure 1. (click on the image for PDF)
- The nondefense
R&D investment rises by $1.2 billion or 2.2 percent to $57.2 billion,
better than the 1 percent increase overall for domestic programs but
far short of increases in previous years (see Figure 1). After five
years of 15 percent increases that ended last year with a 3 percent
boost, National Institutes of Health (NIH) budget growth slows down
even further to just 2 percent this year. Although the total NASA budget
increases by 4.5 percent to $16.1 billion, the bulk of the increase
goes to returning the Space Shuttle to flight, leaving NASA R&D
up just 2 percent. But the National Science Foundation (NSF) sees its
R&D funding fall by 0.3 percent to $4.1 billion, for the first cut
in its R&D budget since 1996.
- Defense-related R&D in DOD, DHS, and the Department of Energy (DOE)
gets 80 percent of the $6.0 billion increase to federal R&D. Total defense R&D climbs 6.8 percent or
$4.8 billion to another all-time high of $75.0 billion and makes up
56.7 percent of the total federal R&D portfolio (see Figure 1).
Weapons systems development in DOD once again accounts for nearly all
of the increase (up $3.6 billion to $56.7 billion), but Congress also
rewarded DOD’s “S&T” activities in research and early technology
development with a nearly $1 billion or 7.9 percent increase to $13.6
billion. DOE defense R&D increases a modest 1.2 percent to $4.3
billion; Congress rejected DOE requests for funds to develop a new generation
of nuclear weapons, including ‘bunker buster’ tactical nuclear weapons.
- Homeland security R&D, spanning both defense and nondefense activities,
received large increases for FY 2005. The final DHS budget provides
$1.2 billion for DHS R&D activities in FY 2005, a 20 percent boost
over last year (see Table 1). Homeland security-related R&D in the
U.S. Department of Agriculture (USDA) and the National Institutes of
Health (NIH) also received increases to bring total homeland security
R&D to an estimated $4.1 billion in FY 2005.
- The total federal research investment (basic
and applied) increases 2.5 percent to an estimated $57.0 billion because
of large increases in the defense and homeland security research portfolios.
Growth in other agencies’ research portfolios slows down considerably
or reverses compared to recent years (see Table 2). The federal development
investment, however, continues recent trends with another dramatic boost
(of 6.5 percent) to $70.5 billion, almost exclusively in defense. Major
construction projects in NASA, USDA, and NIH boost the R&D facilities
investment by 7.8 percent to $4.7 billion.
- The National
Science Foundation’s (NSF) budget actually declines in FY 2005 down to $5.5
billion, $105 million or 1.9 percent less than last year. NSF’s R&D
programs decline 0.3 percent to $4.1 billion (see Table 1).
-
There are some winners in the nondefense R&D portfolio. USDA
R&D does far better than expected at $2.4 billion, a 7.8 percent
increase in contrast to a requested cut because of new food safety and
animal health R&D investments and $239 million in unrequested R&D
earmarks. National Oceanic and Atmospheric Administration (NOAA) R&D
climbs 10.7 percent to $684 million because of congressional support
for the U.S. Commission on Ocean Policy’s recommendations to expand
federal support of ocean-related R&D. National Institute of Standards
and Technology (NIST) support of its intramural laboratory R&D increases
16.2 percent to $328 million; NIST’s Advanced Technology Program (ATP)
won another reprieve from Administration plans to eliminate it but endures
a 24 percent cut in its budget.
- Overall, nondefense R&D does better than total domestic spending,
with modest increases for many agencies; still, some agencies face cuts
in R&D funding (see Figure 2).
The Department of Energy’s (DOE) Office of Science receives a boost
of 4.3 percent to $3.3 billion for its R&D programs, but DOE’s energy
R&D falls slightly to $1.3 billion. R&D in the U.S. Geological
Survey (USGS) falls 0.3 percent to $545 million, although Congress reversed
most of the Administration’s proposed cuts. Congress rejected the Administration’s
proposal to eliminate the Advanced Technology Program, but R&D in
the National Institute of Standards and Technology (NIST) in Commerce
still declines 0.5 percent because of cuts to the ATP budget. R&D
in the Environmental Protection Agency (EPA) declines 2.8 percent; EPA
and NSF are funded through the VA-HUD bill, where increases for veterans,
housing and space priorities squeezed out other funding.
Figure 2. (click on the image for PDF)
- The current focus on defense and homeland security results in large
increases for defense and justice R&D, and modest increases or cuts for
most of the other national missions (see Table 3). Defense R&D
(including DOD, DOE’s defense activities, and a large part of the DHS R&D
portfolio) rises $4.8 billion or 6.8 percent to $75.0 billion for a record
total driven by substantial boosts to defense-related development activities in
DOD and DHS. DHS R&D increases dramatically, resulting in a 9.4 percent
boost for justice R&D to $727 million. After several years of near-parity
between defense and nondefense R&D around the turn of the century, defense
R&D pulls ahead to 56.7 percent of total federal R&D. Because of the
tremendous growth in defense and health R&D over the past few years,
R&D for all other national missions has steadily shrunk to less than 21
percent of the federal R&D portfolio in FY 2005.
- R&D earmarks total $2.1 billion in FY 2005, up 9 percent from
last year, according to the AAAS analysis of congressionally designated,
performer-specific R&D projects in the FY 2005 appropriations bills.
Although these projects amount to only 1.6 percent of total R&D,
they are concentrated in a few key agencies and programs. Four agencies
(USDA, $239 million; NASA, $217 million; DOE, $274 million; and DOD,
$1.0 billion) receive 85 percent of the total R&D earmarks, while
NIH, NSF, and DHS remain earmark-free. (For full details see the AAAS
R&D Funding Update on R&D Earmarks in the FY 2005 Budget,
available in December on the FY 2005 R&D page
of the AAAS R&D web site).
The FY 2005 R&D Budget in Historical Context
The FY 2005 budget leaves
key R&D programs with flat budgets for the better part of the past
decade. As Figure 3 and Figure 4 show, both the defense and nondefense
R&D investments are at record highs in FY 2005, but these totals
disguise flat or declining funding for several areas.
Figure 3. (click on the image for PDF)
Figure 4. (click on the image for PDF)
For defense R&D, Figure 3
shows that nearly all of the increases in the past few years to defense R&D
have been in weapons systems development, “6.4” or higher in the DOD
classification system. DOD’s S&T investments (“6.1” through “6.3”),
comprising basic and applied research and technology development, are just
barely at an all-time high in FY 2005, finally returning to late 1980s funding
levels after 15 years of post-Cold War cuts and recent increases. The S&T
accounts fund all of DOD’s investments in research, including key federal
contributions to the support of the physical sciences, engineering, and other
research fields. But DOD spending on weapons development has far outpaced
S&T budget growth in recent years, both in percentage terms and in dollars.
In nondefense R&D,
record-setting funding levels are primarily a legacy of the recently completed
campaign to double the NIH budget between 1998 and 2003, as shown in Figure 4,
and secondarily the addition of DHS to the R&D portfolio two years ago. All
the other nondefense R&D funding agencies collectively have seen their
budgets remain flat for more than a decade (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. Recent increases in nondefense
R&D have served only to recover the lost ground of the mid-1990s when
discretionary spending declined in the push to balance the federal budget.
These non-NIH agencies, combined with DOD’s research investments, 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. The addition
of DHS to the R&D portfolio has had little impact on federal research
support so far since most of the DHS portfolio goes to development.
Figure 5. (click on the image for PDF)
Because of stagnant funding
for DOD research and non-NIH nondefense R&D, federal support for non-biomedical disciplines has remained stagnant for
more than a decade (see Figure 5), and the FY 2005 budget does little
to change the trend. 1/ Federal support
of research in the physical sciences, engineering, and the environmental
sciences in particular has lagged far behind U.S.
economic growth, resulting in steady declines in support for these disciplines
as a share of the U.S.
economy.
R&D Appropriations for Key Agencies
Full information
on final FY 2005 funding levels and program details for individual agencies
will be available in December in newly revised AAAS
R&D Funding Updates on the AAAS
R&D Web site. (The on-line version of this document features
links to the updates; see also the agency chapters in Congressional Action
on R&D in the FY 2005 Budget.)
- The National Institutes of Health (NIH) budget
of $28.6 billion is just 2 percent above last year’s funding level,
well off the 15 percent annual increases between 1998 and 2003 and well
behind the projected inflation rate for biomedical research of 3.5 percent.
Most NIH institutes will receive increases between 1.6 and 2.5 percent.
NIH estimates that the total number of NIH Research Project Grants (RPGs)
will barely increase this year by 1.4 percent;
the number of new grants could rise slightly, but only back to the
2003 level after falling last year. The RPG proposal success rate could
fall below 27 percent in 2005, down from 30 percent in 2003. NIH’s Roadmap
for Medical Research will receive up to $237 million in FY 2005, nearly
double last year’s funding level, with up to $177 million from NIH institutes’
and centers’ contributions of 0.63 percent of their budgets and the
remainder coming from the Office of the Director.
- The National Science Foundation’s (NSF) budget declines
in FY 2005 to $5.5 billion, $105 million or 1.9 percent less than
last year. The five largest research directorates could all see budget
cuts between 1.5 and 2 percent. NSF’s education and human resources
programs fall by 10 percent. NSF’s R&D funding totals $4.1 billion,
a 0.3 percent cut that represents the first cut in R&D funding since
1996 (see Table 1).
- In August,
Congress finalized a record-breaking $70.3 billion for R&D in the
Department of Defense (DOD) in FY 2005,
$4.6 billion more than last year for a 7.1 percent increase (see Table
1). The big winner in DOD is the missile defense program. Funding for
development in the Missile Defense Agency (MDA) jumps 15.8 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
(see Table 2). Applied research (“6.2”) gains 9.5 percent to $4.8 billion.
DOD “Science and Technology” (S&T) increases by $1 billion or 7.9
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.
- In October,
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 National
Aeronautics and Space Administration (NASA) emerged as one of the
winners in the FY 2005 budget process with $16.1 billion in FY 2005,
4.5 percent more than last year. NASA’s windfall allows the agency to
get the Space Shuttle back in flight next year and resume construction
of the Space Station, as well as embark on its moon-and-Mars programs.
NASA also won unusual flexibility in shifting money within its budget
to meet its changing needs. NASA’s R&D, which excludes the large
increases awarded to the non-R&D Space Shuttle program, rises by
a more modest 2 percent to $11.1 billion. The increases allow NASA to
initiate development of new technologies for the moon-and-Mars missions,
to plan for a repair mission for the Hubble Space Telescope, and also
to resume construction of the Space Station. But these higher priorities
will require NASA to make deep cuts in its research programs, which
fall 5.5 percent to $5.3 billion for basic and applied research in astronomy,
earth sciences, and aeronautics.
- The U.S. Department of Agriculture’s (USDA) R&D portfolio totals $2.4 billion in FY 2005, a substantial increase
of 7.8 percent in contrast to a requested cut (see Table 1). Most
of the increase goes to laboratory construction projects, leaving basic
and applied research up a smaller 2.5 percent. Congress provides $122
million in new funds, down from the requested $178 million, for animal
research and diagnostic facilities at the National Centers for Animal
Health in Ames, Iowa.
The remaining construction funds go to earmarked projects.
While the National Research Initiative of competitively awarded research
grants receives a record $180 million, research earmarks also go up
substantially.
- The Advanced
Technology Program (ATP) in the Department of Commerce
won a reprieve with a total budget of $136 million, 24 percent below
last year but an improvement over House and Administration plans to
eliminate the program. The National Institute of Standards and Technology
(NIST) laboratory program is a bright spot in the R&D portfolio
with a 16.2 percent increase in its R&D funding to $328 million.
The non-R&D Manufacturing Extension Partnership received $108 million,
nearly triple last year’s funding level but roughly equal to the FY
2003 and earlier years’ budgets. Congress responded to the recent U.S.
Commission on Ocean Policy report by dramatically boosting National
Oceanic and Atmospheric Administration (NOAA) funding of ocean-related
research, and created a new NOAA scholarship program to encourage U.S.
citizens to study oceanic and atmospheric science. NOAA R&D climbs
10.7 percent to $684 million; total Commerce R&D increases 4.6 percent
to $1.2 billion.
- The Department of Energy’s (DOE) Office of Science
(OS) emerged from the budget process a winner with $3.3 billion
for its R&D programs, 4.3 percent more than last year. DOE OS programs
in high energy physics, fusion research, nuclear physics, computing
research, and basic energy sciences all receive modest increases. DOE’s
energy R&D declines 2.6 percent to $1.3 billion; Congress rejected
a proposed boost to $237 million for the FutureGen program to develop
a next-generation hydrogen power plant and left funding at $18 million.
DOE’s defense R&D increases a modest 1.2 percent to $4.3 billion.
Congress rejected DOE requests for
$36 million in new funds to develop a new generation of nuclear weapons,
including ‘bunker buster’ tactical nuclear weapons.
- The U.S.
Geological Survey (USGS) receives $935 million for its total
budget in FY 2005, a 0.3 percent cut. Its R&D funding declines 0.2
percent to $545 million. Congress reversed many of the Bush Administration’s
proposed cuts to geology and water research programs, but could not
bring funding above the FY 2004 level.
- The Environmental
Protection Agency (EPA) budget for
FY 2005 was caught in the difficult VA-HUD spending bill; increases
for veterans, housing and space programs squeezed out EPA funding. EPA’s
R&D declines 2.8 percent to $598 million; most R&D programs
remain at or slightly below FY 2004 levels.
- Department of Transportation (DOT) R&D inches
up 1.5 percent to $718 million in FY 2005 (see Table 1). Congress
rejected a large increase in highway R&D proposed by the Bush Administration,
but boosted funding for aviation R&D.
- R&D in the Department of Veterans Affairs (VA) declines 0.8 percent
to $813 million in FY 2005 in (see Table 1). 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.
Budget Outlook
The U.S. Treasury reported last month 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 did
not emerge 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. Recently, President Bush reiterated his pledge
to reduce the deficit in half over the next five years by restraining
domestic discretionary spending. Congress kept its part of the bargain
by approving an FY 2005 budget with just a 1 percent increase in non-homeland
security domestic discretionary spending.
Last spring, when President Bush
originally pledged to reduce the deficit in half by 2009, the AAAS analysis
of the outyear projections for federal R&D to FY 2009 in his budget
plan showed that all but three of the federal R&D funding agencies
would see their R&D funding decline in inflation-adjusted terms
by 2009. Only DOD, DHS, and NASA would see their R&D budgets keep
pace with inflation. (See the AAAS Analysis
of the Outyear Projections for R&D in the FY 2005 Budget
from April 22 (revised May 7) for details.) These projections show
that nearly all R&D programs outside the priority areas of homeland
security, defense, and space would see their budgets decline in the
FY 2006 budget proposal to be released in two months. While the details
of the FY 2006 budget will differ from the projections, President Bush’s
recent statements after his re-election confirm that the broad outlines
of his budget policy remain in place.
The AAAS publication Congressional Action
on Research and Development in the FY 2005 Budget will be available
the week of December 13. The full report will be available online.
The full report will offer 16 detailed funding tables, several charts,
a chronology of the events in the FY 2005 budget process, an analysis
of funding trends, and analyses of the impacts of the FY 2005 budget
on each of the major R&D funding agencies. Individual agency analyses,
historical tables, agency funding tables, and charts of recent funding
trends will be available shortly on the AAAS
R&D Web site in the “FY 2005 R&D”
section.
- November 29, 2004
