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Go to: Table
1. Total R&D by Agency (Senate Action as of 8/1)
Table 2. Total R&D by Agency (House Action as of 8/1)
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
AAAS R&D Funding Updates for FY 2001
Senate appropriations:
Department of Defense
National Institutes
of Health
Department of Energy
U.S. Department
of Agriculture
Department of Commerce
Department of Transportation
Department of the
Interior
AAAS R&D Funding Updates for FY 2001
House appropriations:
Department of Defense
National Institutes
of Health
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
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(This analysis is a progress report
on FY 2001 House and Senate appropriations so far in the budget process,
and summarizes the AAAS R&D Funding Updates released so far. This
updates a previousd June 26 progress report. 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.)
Before leaving Washington for a month-long August recess,
Congress made substantial progress on FY 2001 appropriations, although
much remains to be done before the October 1 start of FY 2001. The House
of Representatives has approved its versions of all the FY 2001 appropriations
bills covering the major R&D funding agencies, while the Senate
is further behind. Only one major R&D funding agency, the Department
of Defense (DOD), has received its final appropriations, but several
more should see their final appropriations emerge from House-Senate
conference after Labor Day when Congress returns to session.
FY 2001 R&D in House and Senate Appropriations
FY 2001 will be a banner year for defense R&D.
Before the recess, both the House and Senate gave final approval to
a DOD appropriations bill, and the President is expected to sign it
into law shortly. The final bill provides major increases for DOD R&D,
including substantial increases for basic and applied research. Just
before the recess, the House and Senate came to a provisional agreement
on a final, $2.7 billion or 15 percent increase for the National Institutes
of Health (NIH), but delayed filing a conference report until September.
But because the House and the Senate are working with
discretionary spending ceilings for nondefense programs that are far
below the President's request and are even below FY 2000 funding levels,
the House would fall far short of the Administration's request for nearly
all non-NIH nondefense R&D programs and would cut many programs
below FY 2000 (see Table 2). The Senate
would provide more generous funding to non-NIH nondefense R&D programs,
but at the cost of siphoning funds from the one appropriations bill
it has not yet drafted (see Table 1). Unfortunately,
this bill is the VA-HUD bill, which funds R&D in the National Science
Foundation (NSF), the National Aeronautics and Space Administration
(NASA), and the Environmental Protection Agency (EPA). The Senate will
not draft this bill until September, and hopes to raise the discretionary
spending ceiling to do so.
When it returns to session in September, Congress will
face enormous pressure to raise funding for domestic programs above
the levels it has proposed so far. President Clinton has threatened
to veto nearly all of the domestic appropriations bills in either the
House or Senate form, or both, and is ready to wield his veto pen unless
Congress brings funding closer to his requested levels. With new budget
projections calling for ever-higher budget surpluses in the years ahead
and a strong desire to complete appropriations in time to adjourn well
before the November elections, it will be hard for Congress to resist
giving the President everything he wants. It seems likely, then, that
FY 2001 will be a banner year not only for DOD and NIH, but for the
broad portfolio of federal R&D programs. (For details on individual
agency appropriations, please see the agency R&D Funding Updates
on the AAAS R&D Web site).
- The Senate, in appropriations action so far, would offer significant
increases to most R&D funding agencies. For the agencies whose
appropriations the Senate has drafted, total R&D would increase
by nearly 8.7 percent or $6 billion (see Table
1). Most of this increase is well on its way to becoming final.
The Senate last week gave final approval to a 6.8 percent or $2.7
billion increase for DOD R&D to $41.9 billion, which should become
law shortly. This appropriation includes a 13 percent increase in
DOD's support of basic research and an 8 percent increase in applied
research. The Senate proposed a 15 percent or $2.7 billion increase
to the NIH budget, and just before the recess a House-Senate conference
committee agreed to make the Senate figure final. Other agencies slated
for large increases in R&D in the Senate versions of their appropriations
include the Department of Energy (DOE; up 6.1 percent to $7.6 billion),
the U.S. Department of Agriculture (USDA; up 7.0 percent to $1.9 billion),
and the Department of Transportation (DOT; up 13.1 percent to $686
million).
- A few agencies would see their R&D budgets decline in the Senate
bills, mostly because tight constraints on domestic discretionary
spending forced Senate appropriators to make tough choices between
competing priorities. Department of the Interior R&D would decline
slightly to $571 million, in contrast to a requested increase to $590
million. R&D in the Department of Commerce would fall 2.7 percent
to $1.0 billion. Although most Commerce programs would receive significant
increases, including an 8.1 percent boost for National Institute of
Standards and Technology (NIST) intramiral R&D programs and a
12.8 percent boost for the Advanced Technology Program, these would
be offset with a requested cut to NIST's Construction of Research
Facilities account. R&D in the National Oceanic and Atmospheric
Administration (NOAA) in Commerce would rise 2.5 percent to $606 million.
Within DOE, funding for physics and fusion research would decline.
The fate of R&D in major R&D funding agencies such as NSF,
NASA, and EPA is uncertain; Senate appropriators will not draft appropriations
for them until mid-September, and unless they allocate more money
for appropriations by then, they will face tough choices in allocating
scarce funds.
- The House would be far less generous to nondefense R&D than
the Senate, and would cut R&D funding for many agencies. Although
the House joined with the Senate in agreeing to substantial increases
for DOD and NIH, nondefense R&D excluding NIH would decline 1.3
percent in the House appropriations bills. Although the House would
award a slight 3.9 percent increase to NSF R&D to $3.0 billion,
this would be far short of the nearly 20 percent increase requested
by the President. The House would cut NASA R&D by 1.0 percent,
mostly because it would eliminate the Reusable Launch Vehicle program.
Commerce R&D would fall by nearly a quarter because the House
would eliminate the Advanced Technology Program and slash NOAA R&D.
USDA R&D would decline 2.0 percent because the House would prevent
a mandatory competitive grants program from spending any money in
FY 2001 and would cut other competitive research grants, while boosting
funding for congressionally designated research projects. While DOE
R&D would edge up slightly by 0.7 percent, the House would balance
increases for DOE's defense R&D activities with sharp cuts in
nondefense energy-related R&D activities and stagnant funding
for science activities.
Policy Context and Budget Outlook
Earlier this year, the President requested a total
of $622 billion for discretionary programs in the federal budget, a
5.2 percent increase over FY 2000. In its FY 2001 budget resolution,
however, Congress, limited discretionary spending to only $605 billion,
while at the same time increasing defense spending (which accounts for
half of discretionary spending) above the President's request in order
to demonstrate fiscal discipline and allocate funds for Republican priorities
such as tax cuts. As a result, in the congressional plan nondefense
discretionary spending in FY 2001 would fall below the FY 2000 level.
Congress is well on its way to following through with
its plan. The 2 (out of 13) appropriations bills sent to President Clinton
for his expected signature fund nearly all defense discretionary spending.
The two bills boost total defense spending in FY 2001 well above $300
billion and provide large increases for most programs, leaving the remaining
11 appropriations bills funding domestic programs well below FY 2000
funding levels if Congress sticks to its plan. Despite several accounting
maneuvers to squeeze additional domestic spending under the target,
Congress has written appropriations bills that fall so short of the
President's request that he has threatened to veto 8 of the 11 appropriations
bills in either the House or Senate versions, or both.
Not surprisingly, with the exception of NIH, a high
congressional priority, congressional appropriations for nondefense
R&D have come in well below the request. In the House plan, they
have even come in below FY 2000 if NIH is excluded.
The Republican majority in Congress drew up its restrictive
spending targets in part to appease fiscal conservatives who have long
insisted on controlling government spending, but mostly to increase
the budget surpluses available to finance a long list of proposed tax
cuts. Since 1998, when the federal government recorded its first budget
surplus in 30 years, there has emerged a bipartisan consensus that the
federal budget must stay in surplus. Then, in 1999, the federal government
recorded its first on-budget surplus in more than thirty years, a budget
surplus even without counting the large annual surpluses in the Social
Security trust fund (legally classified as 'off-budget'). Now, the bipartisan
consensus in Washington is that the federal budget must continue to
record an on-budget surplus, allowing all surpluses in the Social Security
trust fund and any remaining on-budget surpluses to pay down the national
debt.
Figure 1. (click on image to view or download a full-size PDF version
of the chart)
When the Republican Congress originally drew up its
spending plans for FY 2001 in April, the Congressional Budget Office
had projected only a $15 billion on-budget surplus in FY 2001, assuming
discretionary spending grew at the rate of inflation (to roughly $611
billion), leaving little to no room to enact tax cuts while still keeping
the government in on-budget surplus. The congressional budget resolution
therefore set a discretionary spending target of $605 billion, below
the amount necessary to keep pace with inflation, to allow for more
tax cuts in FY 2001. If Congress had agreed to the President's request
for discretionary spending, there would have been no on-budget surplus
left for tax cuts. Congressional committees drafted several tax cut
bills this spring and summer, most of them designed to cost relatively
little in FY 2001 and FY 2002 but with revenue losses ballooning in
subsequent years, when projected on-budget surpluses are much higher.
As in past years, the growing economy now offers the
President and Congress a way out of their dilemma. In July, the President's
Office of Management and Budget issued a revised budget forecast which
dramatically raised projections of future budget surpluses. Later that
month, the Congressional Budget Office (CBO) issued its own revised
forecast. In three short months between April and July, the economy
grew so much faster than previously anticipated, boosting expected tax
revenues, that the surplus outlook improved dramatically. As shown in
Figure 1, CBO now projects an on-budget surplus of FY 2001 (assuming
current policies, and assuming discretionary spending of $611 billion)
of $102 billion. CBO projects that these surpluses will grow every year
for a cumulative $2.2 trillion over the next ten years. Including the
Social Security surpluses, combined federal budget surpluses over the
next ten years could total $4.6 trillion, raising the tantalizing possibility
that the national debt, now less than $4 trillion and shrinking, could
be entirely eliminated in this decade.
Both President and Congress have other plans for this
surplus than simply continuing current policies, letting discretionary
spending only keep pace with inflation, and letting surpluses pay off
the national debt. But the size of the surpluses, and especially the
key FY 2001 surplus, are such that Congress can now agree to raise discretionary
spending to the requested $622 billion in FY 2001 or even higher, enact
their proposed tax cuts totaling up to $1 trillion over ten years, and
still have on-budget surpluses left over to pay down the national debt,
albeit more slowly than in the status quo scenario. President Clinton,
meanwhile, finds that with these surplus projections there is room to
call for discretionary spending increases in FY 2001 and future years,
take the Medicare program off-budget, introduce a Medicare prescription
drug benefit, pay down the national debt, and still have enough of a
surplus left over to offer Congress an olive branch by offering to accept
some of their tax cut proposals.
Of course, surplus projections depend crucially on
the performance of the U.S. economy and can swing wildly based on minute
changes in economic performance, making long-term forecasts highly unreliable.
But in the near term, it is almost certain that the federal government
will record another on-budget surplus in FY 2001 large enough to allow
for increases in discretionary spending, and this key finding will affect
the budget debates this fall.
When Congress returns to session Labor Day, it will
have less than four weeks before the October 1 start of FY 2001 to complete
appropriations. Although Congress routinely stays in session working
on appropriations past October 1, this year congressional leaders are
intensely focused on the November elections, and desperately want to
adjourn and spend the month of October campaigning. With control of
both the House and Senate at stake, Republican leaders are acutely aware
that a swing of five to six seats in either chamber could return Democrats
to majority status, and that Republicans will be more vulnerable if
Congress is forced to stay in session into October. Meanwhile, President
Clinton has the leverage of being able to veto bills until Congress
crafts them to his liking, and because his term runs until January he
can afford to wait for Congress to become more accommodating.
It is widely expected that there will be too little
time in September to approve all the appropriations bills through the
normal process, especially if there are vetoes. Some of the remaining
11 bills will emerge from House-Senate conference with sufficient funding
to win the President's signature, but others will fall far short of
the request unless conferees add funds and break their spending target.
Congress may choose to add funds at this stage in order to secure the
President's signature. Toward the end of September or the beginning
of October, Congress may be forced to bundle several unfinished or vetoed
bills together into an omnibus appropriations bill, negotiated in a
frenzy behind closed doors by congressional leaders and Clinton Administration
officials, and loaded with enough additional funds to break congressional
spending limits and move domestic spending totals closer to give the
President nearly all of what he requested. Omnibus bills have been used
in each of the past several years, and for most agencies funding levels
have wound up far closer to the request than originally proposed by
the House or Senate.
This year, it is likely that the non-NIH nondefense
R&D funding agencies will end up far above the funding levels proposed
by the House and probably above the Senate, and will end up with increases
over FY 2000. But the final result will be far from clear until the
very last days of the budget process as Congress and the President wrap
up appropriations in an early October whirlwind, and whether the results
will be positive or merely adequate for R&D will depend crucially
on how important R&D programs will be in the minds of budget negotiators,
and whether they will be considered as high or low priorities by congressional
and Administration officials.
(Further AAAS R&D Funding Updates on the AAAS R&D
Web site will provide up-to-date information on R&D in FY 2001 appropriations.)
- August 1, 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
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