AAAS R&D Funding Update on FY 2007 Senate Appropriations

(This report is a summary of AAAS estimates and analyses of federal R&D appropriations so far in the FY 2007 appropriations process. It focuses on FY 2007 Senate appropriations bills.)

Before leaving Washington for a month-long summer recess, Congress brought large proposed increases for select physical sciences funding agencies in the President’s American Competitiveness Initiative (ACI) closer to reality, and supported Administration plans to boost development investments for new spacecraft and weapons technologies. But although Congress would add money to proposed cuts in some basic and applied research programs, the federal investment in basic and applied research would still decline in fiscal year (FY) 2007 under separate House and Senate plans that must be reconciled in the fall. On the flip side of the ACI increases, Congress is still on track to keep the National Institutes of Health (NIH) budget flat or declining for the second year in a row, to slash homeland security R&D funding for the first time, and to make steep cuts in other federal research portfolios.

Highlights So Far of Federal R&D in FY 2007 Appropriations

Figure 1. (click on image for PDF)

Before the summer recess, Congress made significant progress on FY 2007 appropriations but left so much unfinished that nearly all the major R&D funding agencies will have to wait until well after the October 1 start of FY 2007 to receive their final budgets. The House Appropriations Committee drafted all 11 of its FY 2007 appropriations bills in June, and the full House has approved 10 of them. The Senate Appropriations Committee has also drafted its versions of all the bills, but the full Senate has approved only 1, leaving Senate debate on 10 bills and the difficult work of convening House-Senate conference committees to iron out differences between House and Senate appropriations until this fall.

- In a strong show of congressional support for the President’s American Competitiveness Initiative (ACI), both the House and the Senate would fully fund requested increases for three key physical sciences agencies. The National Science Foundation (NSF; R&D up 7.9 percent to $4.5 billion in the Senate), the Department of Energy’s Office of Science (DOE OS; up 18 percent to $3.9 billion), and Commerce’s National Institute of Standards and Technology laboratory research (NIST; up 21 percent to $382 million) would all receive the full requested increases for their R&D programs (see Table 1 and Figure 1).

- The federal investment in research and development (R&D) would hit another record of $138.3 billion in FY 2007 Senate appropriations, a $3.0 billion or 2.2 percent increase over 2006 (see Table 1). The entire increase and more would go to development in the Department of Defense (DOD) for weapons and the National Aeronautics and Space Administration (NASA) for new space craft, leaving the federal investment in basic and applied research and R&D facilities in decline. Development funding would climb, for the seventh year in a row, by $3.3 billion to $77.5 billion, while research funding would fall 0.4 percent to $56.5 billion and R&D facilities funding would fall 1.0 percent to $4.3 billion (see Figure 2). On the House side of Capitol Hill, appropriators would provide $1.3 billion more for development than the Senate, but less for research and R&D facilities. The Senate R&D total is $1.4 billion higher than the President’s February budget request.

Figure 2. (click on image for PDF)

- Congress supports the Administration’s priorities for the development of new spacecraft and new weapons, pushing development (the “D” in R&D) to new highs (see Figure 2). NASA’s R&D funding would climb $871 million or 7.7 percent to $12.2 billion in the Senate; all of the increase and more would go to development efforts for the next generation of human space vehicles, leaving NASA research funding in steep decline. DOD R&D would increase nearly $1 billion to a new record of $74.2 billion in the Senate and $3 billion to $76.2 billion in the House, with the entire increase in both chambers going to the development of new weapons systems, leaving DOD research funding flat or falling.

- Although the House and the Senate would add to requested cuts in research programs, the federal investment in basic and applied research (the “R” in R&D) would still fall in 2007 appropriations so far (see Figure 2 and Figure 3). Despite adding $1.7 billion to the request, Senate appropriations for basic and applied research totaling $56.5 billion would still fall 0.4 percent short of this year’s funding level (see Table 2). The House would provide slightly less. After several years of rapid growth at the turn of the decade, NIH’s investment in research would fall short of inflation for the third year in a row under both the House and Senate plans (see Figure 2). For non-biomedical research, federal research funding would continue to slide as big gains for the American Competitiveness Initiative agencies would be more than offset by cuts in other research funding agencies. Senate appropriators would make steep cuts in DOD and NASA research to offset big gains on the development side, even though these agencies are significant sources of federal support for physical sciences research.

Figure 3. (click on the image for PDF)

- Senate appropriators would turn steep requested cuts into more modest declines for the U.S. Department of Agriculture (down 4.1 percent to $2.3 billion), the Department of Transportation (down 5.4 percent to $793 million), the Environmental Protection Agency (EPA; down 0.7 percent to $596 million), and “S&T” funding in DOD (down 10.1 percent to $12.4 billion; see Figure 1). The Senate would turn requested cuts into increases for energy R&D in DOE (up 21 percent to $1.6 billion), the U.S. Geological Survey (USGS; up 1.9 percent to $569 million), and especially the National Oceanic and Atmospheric Administration (NOAA; up a dramatic 26 percent to $779 million). As shown in Figure 1, House and Senate appropriators are mostly in agreement on these changes to the request, except for NOAA, where the House and Senate are dramatically at odds, and DOD, where the House would bring funding close to this year’s levels.

- Congress is well on its way to matching last year’s record-breaking total of R&D earmarks. The AAAS analysis of R&D earmarks in FY 2007 appropriations shows that the Senate would designate $1.3 billion for congressionally designated performer-specific R&D projects in FY 2007 (see Table A), while the House would earmark $1.1 billion in R&D funds. Last year, the House had $1.2 billion and the Senate $1.5 billion in R&D earmarks which combined for a total of $2.4 billion in final FY 2006 appropriations. Congress is on track to approach or match last year’s totals in final FY 2007 appropriations. Although earmarking in Senate appropriations would continue unabated in agencies such as DOE ($240 million), the U.S. Department of Agriculture (USDA; $352 million), DOD ($448 million) and NOAA ($184 million), both the House and the Senate have refrained from earmarking the NASA budget in 2007, and in DOE both chambers have chosen to add earmarks on top of the request rather than cutting the request to make room for earmarks. (For full details see the forthcoming AAAS R&D Funding Update on R&D Earmarks in FY 2007 Senate Appropriations, available in mid-August on the AAAS R&D web site).

R&D Appropriations for Key Agencies

Full information on FY 2007 House and Senate appropriations and program details for individual agencies are available in AAAS R&D Funding Updates on the AAAS R&D Web site. This summary report focuses on Senate appropriations; House appropriations were analyzed more fully in the July summary report. (The on-line version of this document features links to the updates.)

- The Senate would add $200 million to the budget request, but FY 2007 still looks like another lean year for the National Institutes of Health (NIH). The Senate would give NIH a total budget of $28.8 billion, an increase of just 0.7 percent in 2007 after falling for the first time in 36 years in 2006. NIH R&D funding, 97 percent of the total budget, would also gain 0.7 percent to $28.0 billion. Even the modest Senate increase would result in a 5 percent cut in NIH spending between 2004 and 2007 after adjusting for economy-wide inflation (see Figure 4), and a nearly 10 percent cut based on NIH’s calculations of biomedical research inflation. All of NIH’s institutes and centers (IC’s) would see their funding increase between 0 and 1 percent, except for the Senate’s endorsement of a large 30 percent or $160 million increase for the Office of the Director (OD) for the priorities of biodefense R&D and the NIH Roadmap for Medical Research. These Senate gains, though modest, would nevertheless be an improvement over the House and requested appropriations, which would keep total NIH funding flat and cut most IC budgets for the second year in a row. Neither the House nor the Senate took up their respective versions of the Labor-HHS appropriations bill containing the NIH budget before the August recess, meaning that it could be months before a House-Senate conference committee comes up with a final NIH appropriation for 2007.

- Congress is well on its way to approving a large increase for the National Science Foundation (NSF) as part of the American Competitiveness Initiative. The Senate has now joined the House and the Administration in proposing a total budget of $6.0 billion for NSF in 2007, a 7.4 percent increase benefiting all disciplines in NSF’s research portfolio. NSF’s R&D funding would surge 7.9 percent to $4.5 billion after several years of flat funding to reach an all-time high in real terms (see Figure 4). Most research directorates would receive increases between 5 and 8 percent after several years of flat or declining funding, and all directorates would be able to increase average award sizes, numbers of research grants, and success rates for grant applications if these increases become final.

- Development funding would have another banner year within the Department of Defense (DOD) R&D portfolio, but the Senate would only partially restore steep proposed cuts in DOD’s research investments. The Senate would give DOD $74.2 billion next year for its R&D portfolio, an increase of nearly $1 billion or 1.3 percent over this year. The entire increase would go to weapons development, leaving research funding in decline. Instead of a 22 percent requested cut, the Senate appropriation would leave DOD “Science & Technology” (S&T) funding down 10 percent at $12.4 billion (see Table 1 and Figure 4), with flat funding for basic research and falling funding for applied research and technology development. The House, meanwhile, would add $2 billion more than the Senate, enough to boost weapons development to record highs but also to keep research funding nearly even with this year. The research-oriented Defense Advanced Research Projects Agency (DARPA) would see its budget fall 3.4 percent in the Senate plan, but the additional House dollars would let DARPA expand 11.2 percent to $3.3 billion. These large differences between the House and Senate are likely to be ironed out in September, and a final Defense budget could be signed into law close to the October 1 start of the new fiscal year.

Figure 4. (click on the image for PDF)

- The National Aeronautics and Space Administration (NASA) successfully returned the Space Shuttle to flight in July, and now hopes to get back to its ambitious plans for space exploration. But to meet the ballooning costs of getting the Space Shuttle program back on track, the Senate would add $1.04 billion in emergency funding to next year’s budget in addition to its regular appropriation, for a total NASA budget of $17.8 billion in 2007, a 7 percent increase. NASA’s R&D funding would climb $871 million or 7.7 percent to $12.2 billion in the Senate plan after a decade of mostly flat funding (see Figure 4), but the entire increase and more would go to Constellation Systems, the NASA effort to develop human space vehicles to carry out the Vision for Space Exploration of returning to the Moon and going onward to Mars. Constellation Systems funding would soar $1.2 billion or 72 percent to $3.0 billion, leaving all other NASA R&D programs, including the NASA basic and applied research portfolio, with falling funding. Aeronautics research would fall 14 percent, the former biological and physical research portfolio would tumble 56 percent, and the Science portfolio would rise just 0.8 percent to $5.3 billion and remain well below last year’s funding level. Although the House did not include emergency funding in its appropriation, for R&D programs its proposals are similar to the Senate’s.

- Both the House and the Senate have now endorsed the Administration’s request for a substantial boost for the Department of Energy (DOE)’s Office of Science as part of the American Competitiveness Initiative. The Senate would give the office a total budget of $4.2 billion in 2007, an 18 percent increase that would bring Science near Cold War highs in real terms. After several years of flat or declining budgets (see Figure 4), both the House and now the Senate would join DOE in boosting funding substantially for every OS program. Although President Bush’s request would have reduced DOE’s energy R&D portfolio by 5 percent, the Senate would boost it by a dramatic 21 percent over this year to $1.6 billion. The Senate would leave in place requested increases for many renewables programs, save other programs from cancellation, and add funds to requested cuts in conservation and fossil energy. The Senate plan would give $9.6 billion for total DOE R&D, a large increase of 10 percent.

- The Department of Homeland Security’s (DHS) R&D funding seems almost certain to fall for the first time in 2007, after the Senate recently joined the House and the Administration in cutting DHS R&D. The Senate’s 2007 appropriation would provide $1.0 billion, 18 percent less than the current year and halfway between a smaller requested cut and an even steeper House-approved cut. Funding for nearly all DHS R&D activities would decline from previous years in both the House and Senate plans. After much effort to consolidate DHS R&D into one Directorate for Science and Technology (S&T), some R&D programs are now moving out, partially because of congressional dissatisfaction with S&T’s management performance. The radiological and nuclear countermeasures R&D portfolio moves to a separate Domestic Nuclear Detection Office (DNDO) account in 2007, with a large increase. The Senate would also moves explosives R&D related to aviation security back to the Transportation Security Administration (TSA).

- The Senate and the House would reject steep proposed cuts in the U.S. Department of Agriculture (USDA) R&D portfolio by adding more than $300 million to the request for a total of $2.3 billion (down 4.7 percent from this year). The $300 million in add-ons to the request are nearly all for congressionally designated, performer-specific R&D projects which the request would have eliminated. In order to fund earmarks, both the Senate and the House would trim the requested increase for the National Research Initiative (NRI) competitive grants program from $248 million down to $190 million (up 5 percent over 2006). But both would also boost formula funding for research for the first time this decade.

- The Senate has joined the House in endorsing the Bush Administration’s proposed large increase for intramural research at the National Institute of Standards and Technology (NIST) as part of the American Competitiveness Initiative. NIST intramural research would increase 21 percent to $382 million in both the House and the Senate, while the intramural facilities R&D would jump 41 percent. But for the first time, the Senate would agree with House and Bush Administration proposals to eliminate NIST’s extramural Advanced Technology Program (ATP), thus making it likely that ATP will be terminated in the final 2007 budget. Yet there is sharp disagreement between the House and the Senate over R&D in the National Oceanic and Atmospheric Administration (NOAA), the Department of Commerce’s other major R&D agency. The Senate would give NOAA an R&D portfolio of $779 million, a dramatic 26 percent or $162 million in contrast to steep cuts in the House appropriation, with a particular emphasis on oceans research.

- The Senate has joined the House in reversing requested cuts to R&D in the U.S. Geological Survey (USGS). Instead of a 5 percent requested cut, the Senate would give USGS R&D an almost 2 percent increase to $569 million. The sharpest reversal would be in the mineral resources R&D program, which Interior once again proposed to cut but Congress would save.

- The Environmental Protection Agency’s (EPA) R&D budget would decline slightly in the Senate plan and increase slightly in the House, but both appropriations would improve on a 7 percent requested cut. The Senate would cut EPA R&D 0.7 percent to $596 million. Much of the improvement over the request would come from $30 million in earmarks in both the House and the Senate.

- After a dramatic increase to an all-time high in 2006 because of last summer’s highway bill, Department of Transportation (DOT) R&D funding would decline to $793 million in the FY 2007 Senate appropriation. The Senate would cut aviation R&D and agree with DOT’s proposal to keep increasing highway R&D.

- Department of Veterans Affairs (VA) federal R&D would total $778 million in the latest Senate appropriation, a small $13 million or 1.7 percent gain over the current year.

Budget Outlook: A Crowded Fall Agenda

Congress is away for a month-long August recess and has scheduled another month-long break in October to campaign for the November elections. With time running out on the October 1 start of FY 2007, the prospects for a timely conclusion of the FY 2007 appropriations process are dim. Only 1 of the 11 appropriations bills (Homeland Security) has cleared both the House and the Senate, with the Senate the major roadblock. With each bill requiring two or three days on the Senate floor for debate, the Senate may approve only two or three more bills in September. Because of these expected delays, few if any of the conference committees to craft House-Senate compromises on the final versions of the appropriations bills will be able to complete their work by October. Only the Homeland Security and Defense bills may get signed into law before October 1; for most domestic agencies, another long autumn of waiting is in store until a lame-duck Congress convenes in mid-November to try to finish the FY 2007 appropriations bills. Until then, the final fate of many of the proposed ACI and other priority R&D increases will be up in the air, and other agencies with widely varying requested, House, or Senate marks will only be able to guess at what their FY 2007 budgets will look like.

(This analysis is one of a series of AAAS R&D Funding Updates on FY 2007 congressional appropriations. The complete series of AAAS R&D Funding Updates, including continually updated analyses of R&D in FY 2007 appropriations, is available on the AAAS R&D Web Site (http://www.aaas.org/spp/rd) in the “FY 2007 R&D” or the “What’s New” sections.)

- August 9, 2006
AAAS R&D Budget and Policy Program
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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Congress Boosts Development Funding,But Federal Research Still Headed Down in 2007

Congress Boosts Development Funding,
But Federal Research Still Headed Down in 2007