Congress returns next month
from its August recess to confront a slow-moving FY 2003 appropriations
process with just four weeks before the start of the new fiscal year.
Before leaving Washington,
Congress made some progress on FY 2003 appropriations for discretionary
programs. The House drafted 6 out of the 13 appropriations bills, but
left the largest and most difficult bills for the fall. The Senate managed
to draft all 13 appropriations bills and approved 3 of them. Yet none
of the appropriations bills has been signed into law. The task of getting
even 2 or 3 of the 13 appropriations bills signed into law before the
October 1 start of FY 2003 may prove impossible to accomplish, especially
since the House and the Senate are still working from discretionary
spending totals that are $10 billion apart, making agreement on a final
total for any bill difficult.
FY 2003 R&D in Senate and House Appropriations
Although the
House has drafted 6 appropriations bills, the bills containing funding
for most of the large domestic R&D funding agencies have not yet
been written. The Senate, however, has drafted all 13 appropriations
bills and thus has acted on the entire federal R&D portfolio. This
analysis focuses mostly on Senate action on R&D appropriations,
and the tables in this analysis provide details of Senate R&D appropriations.
- The Senate would provide a record increase to the federal R&D portfolio
and would bring federal R&D to an all-time high of $116.0 billion
in FY 2003 (see Table 1). The Senate
proposal would be $12.8 billion (or 12.4 percent) more than the $103.2
billion FY 2002 total (see Figure 1). The $116.0 billion total would
be a record R&D portfolio in both current and inflation-adjusted
dollars. The Senate would provide $4.7 billion more than the Bush Administration’s
request of $111.3 billion, which would also be the largest R&D budget
in history.
- The lion’s share of the Senate increase would go to defense R&D and
the National Institutes of Health (NIH). The Senate would boost
Department of Defense (DOD) R&D by $7.8 billion or 15.7 percent
for a total of $57.7 billion, bringing DOD
R&D above its FY 1987 peak Cold War funding level to a new all-time
high. DOD weapons systems development would account for nearly all
of the increase (up $7.0 billion to $46.5 billion), leaving an $819
million or 8.0 percent increase for DOD’s “S&T” activities to $11.1
billion. The Senate would complete NIH’s five-year doubling plan with a 16 percent
boost to $27.3 billion for the NIH budget ($26.4 billion for NIH R&D),
slightly more than the request; the R&D increase would be $3.7 billion
or 16.3 percent.
- The remaining agencies in the federal R&D portfolio would receive
smaller increases. The Senate would provide $1.1 billion more than
FY 2002 for a total of $27.9 billion for nondefense R&D excluding
NIH, a 4.1 percent increase. While the increase would be small, it would
be an improvement over the Bush Administration request, which would
have cut nondefense R&D excluding NIH below FY 2002. The
Senate would start the National Science Foundation’s (NSF) R&D on
a five-year doubling track with an 11.9 percent increase to $3.9
billion. Most of the other R&D funding agencies would receive increases;
the exceptions (Department of Transportation, U.S. Department of Agriculture,
and the National Institute of Standards and Technology in Commerce)
are because these agencies’ FY 2002 R&D budgets are inflated with
one-time emergency appropriations to respond to last year’s terrorist
attacks.
- The Senate would provide large increases for basic and applied research
in FY 2003. The Senate would provide $53.3 billion for research
(basic and applied), an increase of $4.7 billion or 9.8 percent that
would represent a record federal research investment (see Table
2). The percentage increase would be smaller than the 12.4 percent
increase to total R&D because the Senate would go along with the
Administration request to provide even larger percentage increases to
DOD development. Nearly two-thirds of the research increase would go
to NIH research (up $3.2 billion or 14.4 percent to $25.5 billion).
NIH would make up 48 percent of the total federal research portfolio,
a proportion that has been increasing over the years. NSF research would increase 14.9 percent to $3.7 billion in what could
be the first year of a five-year doubling plan to match the NIH doubling
plan, though only NSF’s research and not its education and R&D facilities
activities would benefit in the Senate plan. Most of the other R&D
funding agencies would also receive increases in research funding. For
basic research alone, the Senate would provide an estimated $26.1 billion
(up 10.7 percent); NIH would make up a majority (55 percent) of federal
basic research.
Figure 1. (click on the image to view or download a color full-page
PDF version of the chart)
- The Senate would provide large increases for health and defense R&D,
and smaller increases for most of the other national missions (see
Table 3). Defense R&D (including
DOD and the Department of Energy’s defense activities) would rise $8.0
billion or 14.8 percent to $61.7 billion for a record total surpassing
the inflation-adjusted Cold War peak
of FY 1987. After several
years of near-parity between defense and nondefense R&D, defense
R&D would pull ahead to 53 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 jump 14.9 percent to $28.3 billion
to make up nearly a quarter (24.4 percent) of the federal R&D portfolio.
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 a quarter of the federal R&D portfolio and would
total just 22.4 percent in the Senate plan despite increases for most
missions in FY 2003. For the
first time, spending on health R&D would exceed R&D investments
in all other nondefense missions (space, energy, general science,
etc.) combined.
- The “FS&T budget” would increase by $6.1 billion or 11.5 percent to
$58.7 billion (see Table 4). The
Federal Science and Technology (FS&T) budget is a collection of
selected R&D and non-R&D programs that emphasize basic and applied
research and the creation of new knowledge or technologies. The Office
of Management and Budget (OMB) created the FS&T budget as a tracking
device to more easily track the federal S&T investment through the
budget process compared to R&D, and to exclude the large DOD weapons
systems development investment. As with the R&D portfolio, most
agencies’ FS&T programs would receive increases in the Senate plan
except for agencies with large FY 2002 emergency appropriations.
- The House has drafted FY 2003 appropriations for only three of the major
R&D funding agencies. The House would exceed both the Administration
and Senate funding levels for DOD R&D with
$58.8 billion, a $9.0 billion or 18.1 percent increase. The House would
provide $11.7 billion for DOD “S&T”, a 13.7 percent increase in
sharp contrast to a requested cut. The House would provide similar priorities
but slightly less money than the Senate for R&D in the U.S.
Department of Agriculture (down 7.6 percent to $2.1 billion) and
the Department of the Interior (up 3.1 percent
to $681 million). (For details of House appropriations for R&D in
these agencies, see the AAAS R&D Web site’s “FY
2003 R&D” section.)
- Proposals for a new Department of Homeland Security (DHS) would rearrange
the federal R&D portfolio in FY 2003. Congress and the President
are nearly certain to consolidate federal government counter-terrorism
and homeland security agencies into a new DHS this fall. The proposed
DHS could have a large R&D portfolio of up to $2.3 billion in FY
2003 as proposed by the Bush Administration. The House and the Senate, however, would keep $2.0 billion in FY 2003
bioterrorism R&D funding within NIH and the Centers for Disease
Control and Prevention (CDC) rather than transferring these programs
to DHS as proposed. Without these transfers, DHS would take in only
small R&D programs currently located in USDA, the Department of
Transportation (DOT), the Department of Energy (DOE), and the Department
of Commerce. The current Senate proposal would create a new Security
Advanced Research Projects Agency (SARPA) and an “Acceleration Fund”
for homeland security technologies within DHS. (Details of R&D in
the proposed DHS can be found in a separate DHS
analysis on the AAAS R&D
web site.)
Agency Highlights in FY 2003 Senate R&D Appropriations
(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.) Updates
are available for all 10 major R&D funding agencies for the Senate,
and for DOD, USDA,
and Interior for the House. Some figures in
these earlier analyses may differ from the figures presented in this
document; on August 2, $510 million in FY 2002 supplemental R&D
appropriations were enacted. These supplementals and some other minor
adjustments are incorporated in the FY 2002 figures throughout this
analysis, but were not included in earlier Updates. An
analysis of R&D in the FY 2002 supplemental bill is on the AAAS
R&D Web site.)
- The Senate
would complete the five-year campaign to double the National
Institutes of Health (NIH) budget.
The Senate would appropriate $27.3 billion in FY 2003 for the NIH budget,
of which $26.4 billion would be R&D. The Senate increase would be
slightly above the Administration requested increase (see Figure 1).
NIH support of bioterrorism R&D would increase five-fold to reach
$1.5 billion in FY 2003, up from $275 million, and would stay in NIH
rather than be transferred to the new DHS as proposed by the Administration.
Most of the new bioterrorism funds would go to the National Institute
of Allergy and Infectious Diseases (NIAID), which would receive a boost
of 47.1 percent in its budget to $3.7 billion. The Senate would more
than double Buildings and Facilities to $633 million, including funds
for bioterrorism-related security improvements. Most institutes would
receive increases between 8 and 12 percent.
- The Senate
would provide $57.7 billion for Department
of Defense (DOD) R&D in FY 2003,
an increase of $7.8 billion or 15.7 percent that would bring DOD R&D
to an all-time in both current and inflation-adjusted dollars. The House
would go even higher at $58.8 billion. The previous peak was in FY 1987
at $54 billion in today’s dollars. DOD basic research (“6.1”; $1.5 billion,
up 7.6 percent) and applied research (“6.2”; $4.3 billion, up 4.8 percent)
would receive significant boosts in the Senate, though smaller ones
than the increases for development. “Science and Technology” (S&T),
encompassing research plus advanced technology development, would exceed
$11 billion for the first time to reach $11.1 billion (up 8.0 percent);
the House would go even higher with $11.7 billion. Both would exceed
3.0 percent of the total DOD budget, in contrast to the request’s 2.6
percent. The Senate would provide $2.7 billion to the Defense Advanced
Research Projects Agency (DARPA), an increase of 18.9 percent.
- In the
Senate plan, the National Science Foundation’s
(NSF) R&D funding would rise 11.9
percent for a total of $3.9 billion, including a 14.8 percent boost
in the key Research and Related Activities (R&RA) account which
could be the first year of a five-year doubling effort. The Senate would
reject the proposed transfer of three programs from EPA, Interior, and
Commerce to NSF. Research directorates in mathematical and physical
sciences, engineering, the geosciences, social sciences, and computer
sciences would all receive increases between 12 and 20 percent; only
the biological sciences would lag with a 3.4 percent boost. NSF funding
for major facilities construction, however, would fall by nearly half
to $79 million. The total NSF budget of $5.0 billion would include an
8.4 percent increase for NSF’s education and human resources programs.
- The Department of Energy’s (DOE) R&D programs
would receive $8.7 billion in FY 2003 from the Senate, an increase of
$280 million or 3.3 percent. There would be increases slightly above
the rate of inflation for science R&D (up 2.5 percent) and larger
increases for defense R&D (up 3.0 percent) and energy R&D (up
5.7 percent). All would be greater than the request, especially energy
R&D which was proposed for an 11 percent cut. Most Science programs
would receive funding only slightly above FY 2002 funding levels.
- The Senate
would provide $15.2 billion for the National
Aeronautics and Space Administration (NASA) budget in FY 2003,
$298 million or 2.0 percent more than FY 2002 and $200 million more
than the request. NASA’s R&D funding would rise 6.3 percent for
a total of $11.8 billion including a 12.4 percent boost to the Science,
Aeronautics, and Technology (SAT) account to $9.0 billion. The Senate
would go along with NASA’s request to shift money from the International
Space Station to NASA’s other R&D programs. Space Science would
receive $3.5 billion (up 21.8 percent); NASA requested most of the increase,
but the Senate would add $105 million for the Pluto-Kuiper Belt mission
that NASA had proposed for elimination. Funding for the Space Launch
Initiative would climb from $467 million to $729 million. There would
be an additional $126 million in Senate earmarks for R&D projects.
- The Department of Commerce’s R&D portfolio
would grow 4.4 percent to $1.2 billion in the Senate plan. The Senate
bill would provide substantial increases for many National Oceanic and
Atmospheric Administration (NOAA) accounts, for a total of $682 million
(up 12.2 percent). The Senate would reject the proposed transfer of
NOAA’s National Sea Grant College Program to NSF. R&D in the National
Institute of Standards and Technology (NIST) would fall 3.9 percent
to $498 million because of flat funding for existing programs and the
non-renewal of FY 2002 emergency appropriations. The Senate would reject
the Bush Administration’s proposal to halve the Advanced Technology
Program (ATP) and to eliminate the Manufacturing Extension Partnership
(MEP). Instead, the Senate would give level funding to both.
- While
both the House and Senate would be more generous to R&D in the U.S.
Department of Agriculture (USDA) than the request, each would
result in a cut. The House appropriation would total $2.1 billion (down
7.6 percent) and the Senate $2.3 billion (down 2.6 percent). Both the
House and Senate would concur with the request to block the FY 2003
availability of funds for a mandatory competitive research grants program.
The House would provide $103 million and the Senate $104 million for
Special Research Grants, congressionally earmarked R&D projects
totaling 158 in the House and 177 in the Senate. The National Research
Initiative, the main competitive grants program, would rise from $120
million in FY 2002 to $130 million in the House and $164 million in
the Senate. The overall cuts are due primarily to a sharp decline in
the intramural Buildings and Facilities account, FY 2002 being a flush
year because of emergency appropriations to beef up laboratory security
after last fall’s anthrax attacks.
- In the Senate
plan, the Environmental Protection
Agency’s (EPA) R&D would rise 7.7 percent to $624 million,
including a doubling of the Superfund research program for building
decontamination research related to EPA’s role in cleaning Senate office
buildings of anthrax last fall. The Senate would mostly provide for
EPA’s requested priorities but would add $32 million for 24 congressionally
designated research projects.
- Department of Transportation (DOT)
R&D would fall $94 million or 11.9 percent to $697 million in
the FY 2003 Senate plan, though the total could be higher at the discretion
of the new Transportation Security Administration (TSA). The FY 2002
total is inflated with one-time emergency appropriations for aviation
security R&D enacted in the aftermath of the September 11 hijackings.
TSA and Coast Guard R&D (total $48 million in the Senate plan) would
be transferred to the proposed DHS.
- Both
the House and Senate would reject proposed cuts in the
Department of the Interior’s R&D and
would instead provide small increases. Although the Administration would
have cut R&D in Interior’s U.S. Geological Survey (USGS) by 7 percent,
the Senate (up 2.6 percent) and the House (up 2.0 percent) would boost
USGS R&D and would block the proposed transfer of a toxic hydrology
program to NSF.
Policy Context and Budget Outlook
When it returns
to session in September, the Senate’s proposed increases will come under
pressure from House appropriators and the President. The Senate drafted
its appropriations bills to total $758 billion in discretionary spending,
but the House and President Bush have insisted on a total that is $10
billion less at $748 billion. Because all parties have agreed on similar
allocations for defense spending, which makes up half of all discretionary
spending, the Senate could be far more generous to domestic programs
than the House or the President’s request. The House, if it sticks to its total, will be
more constrained in its ability to offer increases for R&D programs
in NIH, NSF, NASA, and other nondefense agencies than the Senate was.
The budget
deficit is no longer a concern because both parties are resigned to
years of deficit spending in a time of recession and war. Thus, there
is no natural target for discretionary spending as there was when the
budget debate was driven by the bipartisan priority to keep the federal
budget in surplus. The President’s insistence on $748 billion is somewhat
arbitrary, especially given the President’s and Congress’ willingness
to approve billions of dollars in new spending earlier this year in
the farm bill, the trade promotion bill, and the FY 2002 supplemental
bill. But having drawn the line here, President Bush appears intent
on enforcing this budget limit and a vocal group of House Republicans
is committed to supporting him.
Although
large differences in spending levels between the House and the Senate
are normally resolved by meeting in the middle or even at the higher
figure, President Bush has insisted on his (and therefore the House’s)
lower total for discretionary spending and has threatened to veto any
bills that exceed his request. Although the large increases for DOD
R&D and NIH R&D appear to be safe because they were in his request,
President Bush requested an overall cut in non-NIH nondefense R&D
programs. Thus, the Senate-proposed funding levels exceeding his request
for agencies such as NSF, DOE, USDA, and NASA may be in jeopardy if
House-Senate conference negotiators are forced to lower their funding
levels toward the House and the President rather than raising them toward
the Senate. The outcome for nondefense agencies will depend on how strong
the House and President Bush are in their resolve to restrain domestic
discretionary spending. The overall federal R&D portfolio, because
it is heavily weighted toward the record increases in NIH and DOD which
have won bipartisan agreement, will almost certainly end up with a record
increase in FY 2003 regardless of what happens to the other agencies.
Less certain
than the funding outcome is the end date of the FY 2003 appropriations
process. In an election year Congress would like to complete appropriations
on or soon after the October 1 start of the fiscal year in order to
have a month to campaign, especially in a close election year such as
this one when party control of both chambers is at stake. But there
is simply not enough time in September to approve the remaining House
and Senate appropriations bills, convene House-Senate conferences, approve
conference reports, and get bills signed by the President. This is especially
true this September: observances of the one-year anniversary of the
September 11 attacks, including a special session in New York City,
will cut into legislative time, and what legislative time remains will
be consumed with legislation to create the Department of Homeland Security.
The House-Senate
conference stage of the process will be especially time-consuming because
of the $10 billion difference between the House and Senate totals.
Normally, the House and Senate agree on a total in the spring,
through the budget resolution, before the appropriations bills are drafted;
thus, any differences in House and Senate totals for individual appropriations
bills are usually small. But this year, because of the lack of a budget
resolution and the differing totals, the larger domestic appropriations
bills could be as much as $6 billion apart between the House and Senate
versions.
Because
of these factors, the most likely scenario is that Congress will wrestle
with appropriations well into October, with the strong possibility that
after recessing for a pre-election break lawmakers will be forced into
a lame-duck session in November and December to finish up appropriations
and other legislative business. For FY 2002, the last appropriations
bill was not signed into law until January 6; it is increasingly likely
that FY 2003 will be similar.
(Further AAAS
R&D Funding Updates on the AAAS
R&D Web site will provide up-to-date information on R&D
in FY 2003 appropriations. At the conclusion of FY 2003 appropriations,
AAAS will publish an analysis of R&D in final FY 2003 appropriations
in our publication Congressional
Action on R&D in the FY 2003 Budget.)
- August 14, 2002
