(This analysis is an update
of the October Status Report, and covers developments
since early October. 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.)
Congress
picked up the pace on final negotiations over the FY 2006 appropriations bills
before its Thanksgiving recess, and hopes to finish work in mid-December.
Congressional appropriators have reached final budget agreements on 10 of the
12 largest R&D funding agencies, and are struggling to wrap up work on the
Department of Defense (DOD) and the National Institutes of Health (NIH), the
two largest federal sponsors of R&D. Appropriators thought they had reached
a final agreement on the NIH budget, but the House rejected the Labor-HHS
appropriations bill on November 17 and sent appropriators back to the drawing
board, while the DOD budget is still in final negotiations. The other major
R&D funding agencies’ 2006 budgets have been signed into law. But in an
added wrinkle to a confusing budget process, Congress is preparing to include
an across-the-board cut of up to 2 percent for all programs in the last FY 2006
spending bill, which will trim R&D funding even for agencies whose budgets
have already been signed into law.
Based
on appropriations action so far, Congress is set to increase the total
federal R&D investment by 2.4 percent to $135.8 billion in 2006,
adding $3.5 billion to the President’s FY 2006 request, but $3.0
billion of the $3.2 billion increase over 2005 would go to weapons development
in DOD and space exploration R&D in the National Aeronautics and
Space Administration (NASA; see Table 1).
Funding for all other federal R&D programs outside weapons and
space exploration would barely increase under current plans, and
would actually fall if congressional discussions of an across-the-board
cut bear fruit in December. The nondefense R&D total depends on
the outcome of final negotiations on the NIH budget and a possible across-the-board
cut, but the current total of $57.7 billion represents a 2.1 percent
increase that just matches the expected inflation rate. Yet nearly two-thirds
of the $1.2 billion increase goes to NASA efforts to develop new space
exploration technologies for its moon and Mars plans, leaving all other
nondefense R&D programs collectively with a small increase that
could disappear entirely in December.
For
the federal research portfolio (excluding development and R&D facilities),
congressional appropriations for basic and applied research total
$57.1 billion, an increase of $1.2 billion or 2.1 percent over 2005
(see Table 2). But again, NASA applied
research investments accounts for a majority of the increase, leaving
most agency research portfolios with modest increases falling short
of inflation. Subtracting the big NASA applied research gains leaves
federal basic research investments barely even with last year. Federal
support of basic research in 2006 totals $27.0 billion currently, barely
0.4 percent more than 2005.
So
far, congressional negotiators have treated R&D programs better
than many observers had feared, juggling priorities and shifting
money from defense to domestic programs to give most R&D programs
flat funding or modest increases (see Table
1 and Figure 1). R&D funding has been unaffected by the unanticipated
billions of dollars for hurricane disaster relief until now, but the
pain could be felt in December as Congress makes across-the-board cuts
to domestic and possibly defense programs, in part to offset the emergency
dollars. Other emerging emergencies such as heating assistance and preparations
for pandemic flu could also add to the financial pressures.
Included in
these FY 2006 R&D appropriations are record-breaking amounts for
R&D earmarks, which significantly cut into core program funding in certain R&D programs.
R&D earmarks total $2.1 billion in 2006 appropriations so far (see
Table A), already ahead of the record-setting 2005 total even though
the DOD budget, which is sure to contain nearly $1 billion in earmarks,
is unfinished.
Figure 1. (click on the image for PDF version)
Highlights of Recent Action
on FY 2006 R&D 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. Congress has concluded House-Senate
conferences on 10 of the 11 appropriations bills for FY 2006, but before
Thanksgiving the House rejected the conference report (final version)
of the Labor-HHS appropriations bill containing funding for NIH and
other Department of Health and Human Services (HHS) agencies. President
Bush has signed the 9 bills into law, giving 10 of the top 12 R&D
funding agencies (all except DOD and NIH) their final 2006 budgets.
But final may not mean final: an across-the-board cut could be attached
to the final appropriations bill approved by Congress, reducing funding
even for agencies whose budgets have already been signed into law. Table
1 provides details of R&D in FY 2006 appropriations so far,
including the rejected compromise on the HHS, Education, and Labor budgets;
the House version of the DOD budget; and enacted appropriations for
the other agencies. Table 2 provides
estimates for the basic and applied research portion of the federal
R&D investment. Table A provides
the latest estimates for R&D earmarks contained in these appropriations.
- Congress is set to provide $135.8 billion
for the total federal R&D portfolio in 2006, an increase of $3.2
billion or 2.4 percent and a $3.5 billion boost over the request (see
Table 1). Nearly the entire increase would go to DOD weapons development
(up $2.2 billion) and NASA space exploration R&D (up $776 million),
leaving all other federal R&D essentially flat.
The total could change significantly in December
depending on final action on the DOD budget, a renegotiated NIH budget,
and a possible across-the-board cut.
- In nondefense R&D, the current total
of $57.7 billion represents a 2.1 percent increase, but two-thirds of
the increase goes to NASA for space exploration technologies (see Table
1). Most nondefense R&D agencies are set to
receive increases at or just below the 2.0 percent inflation rate (see
Figure 1), but these increases could be reduced or erased in December.
- The federal research portfolio (basic and
applied) would be $57.1 billion in 2006 under current plans, 2.1 percent
or $1.2 billion more than last year and $2.0 billion more than the request
(see Table 2), but the majority of the increase goes to NASA applied
research. NASA research climbs 12.2 percent to $5.4 billion,
but the increase goes entirely to applied research on technologies needed
for the agency’s moon and Mars missions. NASA’s basic research investments
in areas such as space science, earth science, and biological and physical
research fall steeply by 7.3 percent. Other basic research efforts fare
better, but total federal basic research would increase just 0.4 percent
to $27.0 billion, with the final total dependent on final action on
the NIH and DOD budgets. Most agencies’ basic research investments
would either decline or increase by less than 1 percent in 2006, with
the notable exception of the National Science Foundation (NSF) with
a 2.8 percent increase. But even NSF’s increase follows a similarly
sized cut in 2005.
- Appropriators
are on a record-setting pace for R&D earmarks with $2.1 billion
so far, already exceeding last year’s record total (see Table A
and Figure 2). The earmarks are concentrated in four agencies (DOD,
$563 million; USDA, $334 million; DOE, $529 million; and NASA, $321
million) with 84 percent of the total, while NIH, NSF, DHS, and other
agencies are earmark-free. Earmarks make up more than 1 out of every
5 program dollars in areas such as National Oceanic and Atmospheric
Administration (NOAA) R&D, energy R&D, and extramural agricultural
research. The final DOD budget will almost certainly push the total
even higher.
Figure 2. (click on the image for PDF)
Recent Highlights in FY 2006
R&D Appropriations
(For
details on individual agency appropriations, please see the agency R&D
Funding Updates on the AAAS R&D
Web site. These highlights only cover recent congressional actions;
other agencies’ budgets (DOD, DHS,
EPA, and Interior)
have not changed since the October status report.
The on-line version of this document contains links.)
-
On November 16, appropriators thought they had agreed on a final budget
bill for the National Institutes of Health (NIH)
and other health, education, and labor agencies. But the next day,
the House rejected the bill because of its steep cuts to many health
and education programs. The agreement included $28.8 billion for NIH
in 2006, a slight 0.9 percent increase over last year that would mark
the first time in 24 years the NIH budget would fail to keep pace with
general inflation. NIH R&D would rise 0.9 percent to $28.0 billion,
failing to keep pace with general inflation for the first time in 24
years. Most NIH institutes would receive increases of between 0.3 and
0.7 percent. In December, Congress is likely to reaffirm the latest
NIH budget proposal, but Congress could also fund NIH at last year’s
levels or increase funding to the Senate’s earlier proposal for a 3.7
percent increase.
-
Congress has agreed on a final Department of
Energy (DOE) budget containing $8.7
billion for DOE’s R&D activities in FY 2006, a slight increase of
0.9 percent that could be erased in later across-the-board cuts.
Although DOE’s Office of Science receives a modest 0.6 percent
increase in its R&D portfolio to $3.4 billion instead of a requested
cut of 4.5 percent, the difference is due to $130 million in congressional
earmarks and a boost in computing research. Earlier congressional attempts
to boost utilization of scientific user facilities did not make it into
the final budget, leaving many DOE facilities with sharply reduced operating
times. Energy-related R&D appears to gain 10.7 percent to $1.3 billion
because of a rescission in 2005, but actual funding declines slightly.
Congress supports Administration priorities in coal and nuclear energy
R&D, but there are cuts in other energy areas including the Administration
priorities of hydrogen and fuel cells.
-
The National Science Foundation (NSF)
budget rebounds to $5.6 billion after declining in 2005. But inflation
and new costs for polar icebreakers leave NSF with less money in real
terms than in 2004, and leave the agency far short of the $8.5 billion
authorized by law. In the final congressional budget, NSF R&D funding
ends up slightly higher than 2004 with $4.2 billion, 2.7 percent more
than 2005 after a cut last year. The main Research and Related Activities
(R&RA) account totals $4.4 billion, an increase of 3.7 percent,
but much of the increase goes to Polar Programs to pay for polar icebreakers
formerly paid for by the Coast Guard. Most
NSF research directorates receive increases between 2 and 4 percent
in 2006, bringing their budgets barely above 2004 levels. Most
of NSF’s education and training programs suffer steep cuts for the second
year in a row.
-
The National Aeronautics and Space Administration
(NASA) continues to juggle its many
missions within a flat budget of $16.4 billion in 2006. But NASA's R&D
funding climbs 7.3 percent to $11.5 billion as an expected decline in
Space Shuttle costs frees up money for NASA R&D. The entire increase
goes to a dramatic expansion of applied research to develop the next
generation of human space vehicles. Even from a 2005 base reduced by
mid-year cuts, there are further cuts in NASA’s aeronautics research
portfolio (down 2.5 percent to $938 million), the earth sciences portfolio
(down 7.3 percent to $2.1 billion), and especially biological and physical
sciences research (down 13.6 percent to $799 million). The largest increases
go to applied research on human space flight technologies. The Constellation
Systems program to develop a new Crew Exploration Vehicle and Crew Launch
Vehicle for human exploration sees its budget nearly triple to $1.1
billion, while efforts to develop supporting technologies also receive
large increases.
- Congress agreed on a $2.4 billion R&D portfolio in FY 2006 for the U.S. Department of Agriculture
(USDA), a slight cut of $9 million or 0.4 percent that
stands in sharp contrast to a requested 15 percent cut because of hundreds
of millions of dollars in earmarks. Congress rejects USDA’s proposals
to slash formula funds in its extramural research portfolio, and instead
preserves a balance between formula funds, competitive funds, and earmarks.
The final Agriculture appropriations bill keeps Hatch Act formula funding
for land-grant colleges at $179 million, in contrast to a USDA proposal
to eliminate half of this funding and shift the funds to a new $75 million
competitive grants program. The National Research Initiative (NRI) of
competitively awarded research grants increases slightly to $183 million,
well short of a $250 million request.
-
The Department of Commerce has $1.1
billion for R&D in 2006, the same as 2005. The Advanced Technology
Program (ATP) survives proposals to eliminate it. Intramural research
at the National Institute of Standards and Technology (NIST) increases
5.4 percent to $334 million. R&D in the National Oceanic and Atmospheric
Administration (NOAA) increases 2.7 percent to $668 million, but the
increase is due to a new earmarked Alaskan fisheries R&D program,
leaving other NOAA R&D down.
- Department of Transportation
(DOT) R&D funding climbs dramatically in 2006
to $850 million, a 14.2 percent or $105 million increase, thanks to
an August transportation reauthorization bill that guarantees large
increases in highway funding as well as numerous congressional earmarks. R&D in the Federal Aviation Administration
(FAA) increases 6.0 percent to $279 million.
-
Congress has once again rejected the Department
of Veterans Affairs’ (VA) proposal to
reorganize its budget. VA federal R&D totals $805 million in FY
2006, up 2.7 percent from last year and a similar boost over the request.
Budget Outlook and Next Steps
Congress returns to session in December to finish
up FY 2006 appropriations and other legislative matters including legislation
to cut entitlements spending and to extend tax cuts. For now, agencies
with unfinished budgets such as NIH and DOD are operating under a continuing
resolution (CR) through December 17 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.
Although the outlook for R&D funding looks
brighter than in February because Congress has shifted billions of dollars
from defense to domestic programs compared to the President’s request,
the costs of responding to hurricanes, a jump in home heating prices,
and a potential flu pandemic have changed the federal budget situation
dramatically in recent weeks. 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.
But there is growing pressure to offset at least some of the spending
with across-the-board cuts in FY 2006 appropriations, and heading into
December such a cut looks increasingly likely to appear in the final
FY 2006 Defense appropriations bill in mid-December.
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.
- November 30, 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
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