Record-breaking federal budget
deficits, high-priority spending increases for homeland security and national
defense, and restraints on domestic spending to bring down future deficits are
combining to squeeze the federal investment in non-defense, non-homeland
security R&D. The House of
Representatives has drafted fiscal year (FY) 2005 budget bills that would keep
the federal investment in non-defense, non-homeland security research and
development (R&D) flat funded next year. Excluding a modest increase for biomedical research in the National
Institutes of Health (NIH), nondefense R&D would
decline 2.1 percent under the latest House plans. The House budget bills
would cut funding for National Science Foundation (NSF), the National
Aeronautics and Space Administration (NASA), the Department of Commerce, and
other major R&D funding agencies.
Defense R&D would benefit strongly from the high priority assigned
to national defense in a time of continued military action in Iraq. Not only has Congress already finalized
the FY 2005 Department of Defense (DOD) budget, but Congress approved
$70.3 billion for the DOD R&D investment, a $4.7 billion or 7.1
percent increase to an all-time high.
Congress would also put homeland security investments, including R&D,
on a fast track toward large increases even in tough budgetary times.
The House would give the new Department of Homeland Security (DHS) an
R&D portfolio of $1.2 billion in FY 2005, a tremendous 19.3 percent
increase; the Senate would provide a similar $1.2 billion for a 17.2
percent increase. DHS may be the only major agency other than DOD to
receive a final budget before the October 1 start of FY 2005.
All other R&D funding agencies not only face flat funding overall,
but may have to wait until well after October 1 to receive their final
budgets. Increases for defense and homeland security within a tight
total congressional budget target are squeezing funding for domestic
programs, and thus congressional appropriators have delayed making politically
painful spending cuts for as long as possible. Even agencies slated
for increases, such as NIH, would see their funding growth fall short
of recent increases. The House would match NIH’s request for a $28.8 billion budget next year, a 2.6
percent increase that would fall well short of the 15 percent annual
increases of a few years ago and will result in declining success rates
for competitive research grants. But
the modest increase for NIH would be offset by cuts in R&D funding
for other nondefense agencies; excluding DHS, 6 of the top 10 nondefense R&D funding agencies would see their R&D
budgets decline next year.
Because the largest
increases would go to weapons development, federal investments in basic
and applied research would increase only slightly under the House plan,
and even then only because of large increases in defense and homeland
security research. The total federal research investment would be $56.3
billion in FY 2005 based on current House action, a 1.2 percent increase,
but excluding large increases for DOD and DHS the research portfolio
would decline by 0.3 percent.
Although the
Senate has not acted on most agencies’ budgets and final congressional
approval of the FY 2005 budget is a long way off, restrictive budget
targets already agreed upon by Republican policymakers will make any
additions to these proposed funding levels extremely difficult, even
in an expected post-election lame-duck congressional session to finalize
the budget.
FY 2005 R&D in House and Senate Appropriations
Before leaving
for a six-week summer recess, Congress made only halting progress on
FY 2005 appropriations. Next month, the House and Senate will face the
daunting task of completing the FY 2005 appropriations process by the
October 1 start of the fiscal year. Before leaving Washington,
the House drafted all 13 FY 2005 appropriations bills and approved 10
of them, but postponed floor debate and approval of the bills funding
the largest R&D funding agencies such as NIH, NSF, and NASA until
September. The Senate has only drafted its versions of only 4 out of
the 13 bills and debated and approved just one. Congress has completed
action only on the DOD budget, which will be signed into law this week.
Thus, this analysis focuses mostly on House action on R&D appropriations,
and Tables 1, 2,
and 3 provide details of House R&D
appropriations except for DOD, which reflect final congressional action.
- The House would provide a substantial increase for the overall federal
R&D portfolio in excess of the President’s request, but the entire
increase would go to defense and homeland security R&D. In the
House plan, the federal R&D portfolio would reach another all-time
high of $131.2 billion in FY 2005 (see Table
1), representing a $5.0 billion or 4.0
percent increase over this year’s funding level. The total would be
$489 million more than the request of $130.7 billion, the largest R&D
request in history.
- Congress has already finalized the FY 2005 Department
of Defense (DOD) budget and approved $70.3 billion for the DOD R&D
investment, a $4.7 billion or 7.1 percent increase to an all-time high.
Congress rebuffed Pentagon efforts to cut DOD’s long-term investments,
and instead approved a record $13.6 billion for DOD’s “S&T” investments
in basic and applied research and early technology investment, an increase
of 8.0 percent (see Table 1). The House has
also approved a $114 million or 2.7 percent increase to DOE defense-related
R&D for a total of $4.4 billion and an increase for DHS defense
R&D, bringing total defense R&D to $75.1 billion, a boost of
7.0 percent or $4.9 billion.
- The federal
investment in nondefense R&D would barely increase by $111 million or
0.2 percent to $56.1 billion in the House budget bills, far less than
the expected economy-wide inflation rate of 1.25 percent. The total
would be $1.1 billion less than the President’s request. Nondefense
R&D minus DHS would be flat at $55.3 billion,
just 0.1 percent above this year’s funding level. The Senate has not
even begun action on its nondefense, non-homeland
security appropriations.
- Within the House nondefense total, there would
be a modest increase for biomedical research at NIH of 2.6 percent;
but excluding the NIH increase, the remaining nondefense
R&D portfolio encompassing investments in space, general science,
energy, commerce, agriculture, transportation, environment, international
missions, and justice would fall 2.1 percent to $28.2 billion (see
Table 1).
- Faced with
severe self-imposed budget constraints and competing priorities, the
House would slash NASA R&D by 6.2 percent down to $10.2 billion,
eliminating new funding for a human return to the moon and then Mars;
the House would also cut NSF R&D by 0.9 percent down to $4.0 billion;
and the House would eliminate the Advanced Technology Program and cut
other programs to bring Department of Commerce R&D 16 percent below
this year’s funding level. The House would also cut the Department of
Energy (DOE) energy R&D portfolio by 8.3 percent down to $1.3 billion.
- There are some
bright spots in House action so far, including a 4.4 percent boost to
R&D in DOE’s Office of Science to $3.3 billion, a large 6.1 percent
increase to $2.4 billion for U.S. Department of Agriculture (USDA) R&D
for the construction of agricultural research facilities, and a 15 percent
increase for intramural R&D at the National Institute of Standards
and Technology (NIST) laboratories.
- After five years of annual 15 percent increases, NIH budget growth slowed
down considerably this year and would continue to see only modest growth
in FY 2005. The House would match the President’s request exactly
with a 2.6 percent increase for NIH’s R&D
portfolio that would fall short of the expected 3.5 percent inflation
rate for biomedical research.
- The federal basic and applied research portfolio would increase 1.2
percent in FY 2005, but only because of defense and homeland security
increases offsetting cuts in the rest of the federal research portfolio.
The federal research portfolio (basic and applied research) would
total $56.3 billion in FY 2005 under the House plan, an increase slightly
less than the 1.25 percent expected economy-wide inflation rate (see
Table 2), but the entire increase would
go to DOD and DHS. While DOD support of research would increase 8.4
percent to $6.8 billion and DHS would nearly triple its fledgling research
effort to $467 million, all other agencies’ research funding collectively
would decline by 0.3 percent. The House cuts would fall especially heavily
on non-biomedical research. While NIH support of biomedical research
would increase a modest 2.5 percent to $27.7 billion, NASA support of
research would plummet 18 percent to $4.6 billion because of a near-elimination
of moon and Mars exploration research; NSF research funding across a
broad range of disciplines would fall 1.6 percent to $3.7 billion; USDA
support of agricultural research would fall 1.7 percent; and Commerce
support of environmental, engineering, and physical sciences research
would plummet 14 percent.
- The current focus on defense and homeland security would result in large
increases for defense and justice R&D, and steep cuts for R&D
in support of other national missions (see Table
3). Defense R&D (including DOD, DOE’s
defense activities, and a portion of the DHS R&D portfolio) would
rise $4.9 billion or 7.0 percent to $75.1 billion
for a record total driven largely by substantial boosts to defense-related
development activities in DOD and DHS. After several years of near-parity
between defense and nondefense R&D around
the turn of the century, defense R&D would keep expanding to 57.2
percent of total federal R&D. Health R&D, mostly in NIH and
its sister agencies in the Department of Health and Human Services (HHS),
would edge up 2.5 percent to make up nearly a quarter (22.9 percent)
of the federal R&D portfolio. The majority of DHS R&D in the
cross-cutting area of homeland security would be classified under the
justice mission; justice R&D would increase 11.1 percent to $737
million. Because of the tremendous growth in defense and health R&D
over the past few years, R&D in support of all other national missions
has steadily shrunk to less than a quarter of the federal R&D portfolio
and would total just 20 percent in the House plan. R&D
funding would decline steeply for nearly all of the other national missions
such as energy, space, transportation, commerce, and the environment.
FY 2005 Appropriations in Historical Context
The latest congressional budget plans would leave key nondefense R&D programs with flat or declining budgets
for more than a decade, even as defense R&D hits record highs.
Figure 1. (click
on the image to view or download a full-size PDF version of the chart)
In nondefense
R&D, the House plan would cut funding from this year’s budgets. As Figure 1
shows, this year’s record-setting funding level is primarily a legacy of the
recently completed campaign to double the NIH budget between 1998 and 2003. All
the other nondefense R&D funding agencies
collectively have seen their budgets barely increase over the past decade, with
even the modest increases in the past few years coming mainly from the creation
of DHS. 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. The FY 2005 House
cuts to non-NIH, nondefense R&D would undo the
gains of the past two years and bring these investments down near mid-1990s
levels. 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.
Figure 2. (click
on the image to view or download a full-size PDF version of the chart)
For defense R&D, Figure 2
shows that nearly all of the enormous increases in the past few years have been
for 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, lagged in the post-Cold War period
but have increased modestly in this decade. While the FY 2005 request would
have cut DOD S&T by nearly $2 billion or 16 percent, Congress approved a
record $13.6 billion for these programs in FY 2005, bringing DOD S&T to an
all-time high even after adjusting for inflation. 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.
Agency Highlights in FY 2005 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. The on-line version of this document contains links.)
- Before the six-week summer recess, the House Appropriations Committee
approved a budget bill that would agree with the FY 2005 request for
the National Institutes of Health (NIH)
of $28.8 billion, a 2.6 percent increase, but the full House will not
take up the bill until September. Most NIH institutes would receive
increases in a narrow range between 2.8 and 3.3 percent; there would
be no clear favorites, unlike the past two years when biodefense research was heavily favored. NIH research (basic
and applied) would increase 2.5 percent to $27.7 billion,
far below the growth rates of the past six years (see Table
2). The House plan would confirm NIH estimates that the total number
of NIH Research Project Grants (RPGs) would
barely increase next year by 1.4 percent; the number of new grants would
rise slightly, but only back to last year’s level after falling this
year. The RPG proposal success rate would fall to 27 percent in 2004
and stay there in 2005, down from 30 percent last year. The average
grant size would rise just 1.3 percent, well below the 3.5 percent expected
inflation rate for biomedical research.
- Congress has come to a final agreement on a record-breaking $70.3 billion
for R&D in the Department of Defense (DOD)
in FY 2005, $4.7 billion more than this year for a 7.1 percent increase
(see Table 1). The big winner in DOD next
year will be the missile defense program. Funding
for development in the Missile Defense Agency (MDA) jumps 16 percent
to $8.8 billion in preparation for initial deployment of national missile
defenses later 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, in contrast to steep cuts in the Pentagon request (see Table
2). Applied research (“6.2”) gains 9.6 percent to $4.8 billion,
again in contrast to requested cuts. DOD “Science and Technology” (S&T)
increases by $1 billion or 8.0 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. President Bush will sign the DOD budget
into law on August 5.
- The House would give the Department of Homeland Security
(DHS) a dramatically expanded R&D budget of $1.2 billion in
FY 2005, up $200 million or 19.3 percent from this year after an even
larger increase last year (see Table 1).
The Senate would provide a similar
$1.2 billion, up 17.2 percent. Both the House and the Senate would
add 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
would go to biological countermeasures, including funds for construction
of a new biodefense laboratory in Maryland.
In addition to its R&D funds, 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 ambitious NASA plan to send humans back
to the moon and onward to Mars hit a roadblock when the House Appropriations
Committee approved a big cut to these new programs. The FY 2005
total NASA budget of $15.1 billion in the House plan would be $229 million
less than this year and $1.1 billion short of the request. The House
plan would cut new initiatives first in order to spare existing NASA
programs, thus decimating the budgets for the new moon and Mars programs.
NASA R&D would fall by 6.2 percent or $674 million to $10.2 billion
(see Table 1). While funding for construction
of the International Space Station would increase 12 percent to $1.7
billion and the non-R&D Space Shuttle program would receive a big
boost in preparation for a return to flight in spring 2005, NASA’s support
of basic and applied research would plummet 18 percent, primarily from
a halt or delay of new moon and Mars programs (see Table
2). The Space Science program
would emerge a relative winner among science programs in the House bill
with $4.0 billion, down $105 million from the request because of the
elimination of moon-and-Mars supporting programs but still up 1.6 percent
from this year. There would be large increases for Mars Exploration
(up 16.1 percent to $691 million) to build the next generation of robotic
explorers, but no funds in the new Lunar Exploration account to begin
preparations for the return to the moon. The NASA budget cuts could
be rejected or altered when the full House takes up the budget bill
in September.
- A House
committee has proposed to cut the National Science
Foundation (NSF) budget next year. The House would award NSF
a budget of $5.5 billion in FY 2005, $278 million less than the request
and $111 million or 2.0 percent below the current year. Most research
directorates would see their budgets decline. The NSF budget of $5.5 billion would
be far short of the $7.4 billion FY 2005 authorization signed into law
19 months ago as part of a plan to double the NSF budget in the five
years to FY 2007. NSF’s R&D funding would total $4.0 billion in
FY 2005, a cut of 0.9 percent (see Table 1).
The cuts to the research directorates would cut deeply into NSF funding
of competitively awarded research grants. The total number of NSF research grants would fall, and the competition
for them would get more difficult. NSF already expects to make awards
to less than one in four applications this year, and the House appropriation
would result in even tougher odds. As with NASA, the NSF budget cuts
could be rejected or altered when the full House takes up the budget
bill in September.
- The House would give $8.9 billion for R&D in the Department
of Energy in FY 2005, an increase of $141 million or 1.6 percent
that would barely stay ahead of inflation (see Table
1). DOE’s Office of Science would have
an R&D budget of $3.3 billion in FY 2005, a boost of 4.4 percent
or $141 million in contrast to a requested cut. The House would add
funds for high-performance computing research, domestic fusion research,
increased operating time at user facilities, and nanoscale
science but would refrain from the traditional addition of earmarked
projects. DOE’s energy R&D programs would decline 8.3 percent to
$1.3 billion.
- The House would cut R&D in the Department of
Commerce by $185 million or 16.4 percent to $946 million in FY 2005,
allocating cuts to nearly every Commerce R&D program (see
Table 1). The House has agreed to the Bush Administration’s proposal to eliminate
the Advanced Technology Program. At the same time, funding for the
Manufacturing Extension Partnership would triple to bring it back to
last year’s funding level. The House would cut funding for the National
Oceanic and Atmospheric Administration’s (NOAA) R&D programs by
11.7 percent to $545 million. Only the National Institute of Standards
and Technology’s (NIST) intramural laboratory R&D programs would
do well, rising 15 percent to $326 million.
- The U.S. Department of Agriculture’s (USDA) R&D would total $2.4 billion in the latest House plan, a substantial
increase of $136 million or 6.1 percent in contrast to a requested cut
(see Table 1). The House would add $213 million to the Administration’s
request, mostly to reinstate earmarks that USDA had proposed to eliminate,
including $88 million for Special Research Grants. The House would match
the USDA request of $180 million for the National Research Initiative
of competitively awarded extramural research grants, up nearly 10 percent
from this year. USDA would also receive the full request of $178 million
to complete animal research and diagnostic facilities at the National
Centers for Animal Health in Ames, Iowa,
that would be the heart of a USDA-wide food and biosafety
initiative.
- The House has drafted
a budget bill that would cut Environmental
Protection Agency’s (EPA) R&D by
4.3 percent or $27 million to $589 million in FY 2005 (see Table
1). The extramural Science
to Achieve Results (STAR) program would see its budget restored to the
FY 2004 level instead of a requested cut. EPA’s total budget would fall
7.3 percent down to $7.8 billion in the House plan, with particularly
steep cuts to State and Tribal Assistance Grants and the Science and
Technology program.
- The U.S. Geological Survey (USGS) would see virtually no change in its R&D budget for FY 2005. The
House would provide $548 million for USGS R&D in FY 2005, just $1
million more than this year. The House would reverse many of the Bush
Administration’s proposed cuts to geology and water research programs,
but all four USGS divisions would see their R&D funding essentially
unchanged.
- R&D in the Department of Veterans Affairs (VA) would decline 6.1 percent
to $770 million in FY 2005 (see Table 1),
with the House agreeing to the VA’s request. 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. Although VA-funded
R&D would decline, VA expects total R&D performed by VA staff
to rise 3.7 percent to $1.7 billion because of increasing funding from
other sources.
Policy Context and Budget Outlook
The Bush Administration now estimates that this year’s federal budget
deficit will be a record-breaking $445 billion, up from the previous
record of $375 billion last year (FY 2003). Although the Administration’s
forecast sees the budget deficit declining (though not disappearing)
in future years, the forecast is based on several questionable assumptions:
that discretionary spending (including defense and homeland security)
will be restrained next year and future years; that some expiring tax-cut
provisions will be allowed to expire even though the Administration
itself favors their extension; and that the recently approved $25 billion
in FY 2004 emergency funds will be the last installment for Iraq occupation
costs.
Within
this fiscal environment, restraint on discretionary spending and thus
federal R&D is likely to be the final result of the FY 2005 appropriations
process. With a Republican majority in both chambers determined to stick
to an $820 billion discretionary spending total that would allow for
increases in defense and homeland security but flat funding at best
for all other programs, it would take the last-minute infusion of billions
of dollars in additional funds to improve the funding situation of agencies
such as NSF and NASA, an infusion that is looking increasingly unlikely
as the deficit situation deteriorates. So while the federal investment
in defense and homeland security R&D will increase substantially
next year, the rest of the federal R&D portfolio can look forward
to a disappointing conclusion of the FY 2005 budget process.
To add insult to
injury, the cuts to nondefense, non-homeland
security programs required to meet budget targets are so politically
painful that Congress is dragging its feet in finalizing the budget.
The most likely scenario going into September is that Congress will
wrestle with individual appropriations bills into early October. The
House will try to debate and approve its remaining 3 bills. But the
Senate has already indicated that it will most likely delay action on
its bills and will roll all of them, except possibly the DHS budget,
into a year-end omnibus appropriations bill. In an optimistic scenario,
the final version of the omnibus bill could be negotiated and approved
in a frenzied post-election lame-duck congressional session that would
give agencies their final budgets in December. But it is just as likely
that, like the past two budgets, Congress may leave the budget as unfinished
business for January. Either way, agencies and the scientists and engineers
they support could spend months waiting for their final FY 2005 budgets.
(This analysis is a progress report on FY 2005 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 2005 appropriations, is available on the
AAAS R&D Web Site (http://www.aaas.org/spp/rd)
in the "FY 2005 R&D" or the "What's
New" sections.)
- August 4, 2004
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
1-3
.
