(This report is a summary of AAAS estimates and analyses
of federal R&D appropriations in the FY 2009 appropriations process as of
the October 1 start of FY 2009.)
Congress has made little progress
on the federal government’s budget for fiscal year (FY) 2009, which begins October
1, leaving federal funding for research and development (R&D) in limbo. Congress
is preparing to leave Washington
for the rest of the year after completing action on a bailout for the financial
sector, postponing final budget decisions for most federal agencies until 2009.
To keep the government operating, lawmakers approved a continuing resolution (CR)
extending funding for all programs in unsigned 2009 appropriations bills at 2008
funding levels through March 6. The CR contains final FY 2009 appropriations for
the Departments of Defense (DOD), Homeland Security (DHS), and Veterans Affairs
(VA); all three receive substantial increases for their R&D portfolios, but
other federal agencies in the remaining 9 of the 12 appropriations bills will
be operating temporarily at or below 2008 funding levels for several months. Earlier
in the year, congressional appropriators endorsed large increases for the three
physical sciences agencies in the American Competitiveness Initiative (ACI), increases
for human spacecraft development, increases for biomedical research in the National
Institutes of Health (NIH), and increases in other parts of the federal research
and development (R&D) portfolio. But instead, most federal programs will continue
to operate at or below 2008 funding levels for several months into the new fiscal
year. In real terms, the federal investment in basic and applied research has
already declined since 2004, and under the CR federal funding of research would
decline again in 2009 for the fifth year in a row.
Figure 1. (click on image for PDF)
Highlights So Far of Federal R&D in FY
2009 Appropriations
Although the federal government’s
fiscal year (FY) 2009 begins on October 1, most of the government’s FY 2009 budget
is still unfinished. Congress has enacted none of the 12 annual appropriations
bills separately. Instead, last week Congress drafted and then quickly approved
a continuing resolution (CR) extending funding for all programs in unfinished
2009 appropriations bills at 2008 funding levels through March 6. President Bush
is expected to sign the CR shortly. The CR also contains three final FY 2009 appropriations
bills, covering the Departments of Defense (DOD), Homeland Security (DHS), and
Veterans Affairs (VA); all three receive substantial increases for their R&D
portfolios and will have final budgets in time for the start of FY 2009 (see Table
1 and Figure 1), but all other federal agencies in the remaining 9 of the
12 appropriations bills will be operating temporarily at 2008 funding levels when
the new fiscal year begins until next spring, when a new Congress resumes work
on 2009 appropriations.
In fact, because the CR counts
only regular appropriations in its funding formula, agencies such as NIH and the
Department of Energy (DOE) that received supplemental appropriations in June will
start out FY 2009 with less money than they currently have (see Figure 1). Various
proposals to give science agencies such as NIH and DOE more money at the start
of FY 2009 have so far failed in Congress. (All
FY 2009 figures reflect the FY 2009 CR, including final appropriations for the
DOD, DHS, and VA and temporary funding at mostly FY 2008 funding levels through
March 6, 2009, for the remaining agencies. FY 2008 figures reflect
supplemental appropriations, including supplementals enacted in June 2008.)
- The federal government enters FY 2009 with
an R&D portfolio of $147.3 billion, an increase of $2.9 billion or 2.0
percent due entirely to a large increase for DOD’s R&D (see Table
1 and Figure 1). Defense R&D gains strongly with a 3.6 percent or $3.0
billion boost to $86.1 billion in 2009, nearly all of which is final, but the
flat-funding formula of the CR results in a $61.2 billion total for nondefense
R&D at the start of FY 2009, a cut of 0.1 percent compared to 2008.
Figure 2. (click on image for PDF)
- The federal investment in basic and applied
research totals $58.2 billion at the start of FY 2009, a small $244 million or
0.4 percent increase due to large research increases in the finalized DOD,
DHS, and VA budgets offset by cuts in research funding for agencies such as NSF,
DOE Office of Science, and NIH that received supplemental 2008 appropriations
in June but lose those funds in the CR. After adjusting for inflation, the
federal investment in research could decline for the fifth year in a row in 2009
(see Figures 2 and 3; current trends show a slight real increase in 2008 federal
research because of a bump up from the June 2008 supplemental, but inflation figures
are expected to be revised upward in the next few months).
Figure 3. (click on image for PDF)
- Development funding gains in 2009, increasing
$2.7 billion or 3.3 percent to $84.6 billion (see Table
1 and Figure 2). 80 percent of all federal development goes to DOD for weapons
systems development. Most of the federal government’s investment in R&D facilities
falls under the agencies flat funded by the CR, resulting in a slight 0.4 percent
cut to $4.5 billion under the CR, below a $4.7 billion request containing requested
increases for NASA and DOE facilities.
- The flat funding levels of the CR put requested
increases for the three agencies in the Bush Administration’s American Competitiveness
Initiative (ACI) on hold. Although Senate appropriators had endorsed and even
added to large requested increases for the National Science Foundation (NSF),
the Department of Energy’s Office of Science (DOE OS), and Commerce’s National
Institute of Standards and Technology laboratories (NIST) in early versions of
the 2009 appropriations bills, the next Congress may have to start all over again
and in the meantime, the three key physical sciences agencies begin FY 2009 with
funding levels at or slightly below 2008.
- Four science agencies that received additional
2008 funding in a June supplemental start FY 2009 at a reduced funding level because
the CR does not count supplementals as part of its funding formula. The National
Institutes of Health (NIH) received $150 million in June, but without those funds
in the 2008 base NIH begins 2009 with a budget of $29.5 billion in the CR, down
$150 million or 0.5 percent. DOE’s Office of Science loses $63 million in 2008
supplementals in the 2009 CR, for a 1.7 percent cut to $3.6 billion for its R&D
portfolio. The National Science Foundation (NSF) begins FY 2009 under the CR with
$4.5 billion in R&D funding, down $23 million or 0.5 percent. And the National
Aeronautics and Space Administration (NASA) sees its R&D funding fall $63
million or 0.5 percent to $12.2 billion. All four agencies hope to receive increases
eventually, when 2009 appropriations are finalized.
- Most agencies’ support of basic and applied
research would remain flat in 2009 under the CR (see Table
2 and Figure 3). One bright spot is that DOD support of basic research (“6.1”)
increases 13 percent to $1.8 billion in final 2009 DOD appropriations, an increase
of 15 percent if earmarks are excluded. Basic and applied research in all three
agencies with final 2009 budgets (DOD, VA, and DHS) would increase (see Table
2), as well as USDA research because new mandatory research funding becomes available
(up 2.9 percent to $2.1 billion. But research support from all other federal agencies
would remain flat or decline under the CR, including cuts in NASA, NSF, DOE, and
NIH research because 2008 supplementals would not be carried over to 2009 under
the CR (see Table 2).
- Defense R&D currently makes up nearly 59 percent
of the federal R&D portfolio under the CR, since large DOD increases become
final while most nondefense programs are flat funded (see Table
3). Overall nondefense R&D would decline slightly under the CR by 0.1
percent to $61.2 billion (see Table 3), and among the nondefense missions only
agriculture R&D would show a slight uptick (up 2.6 percent) because new mandatory
agricultural research funds become available in FY 2009.
R&D Appropriations
for Key Agencies
Detailed
analyses of FY 2009 House, Senate, and conference appropriations for individual
agencies are available in AAAS R&D Funding Updates on the AAAS
R&D Web site. Three agencies receive their final 2009 budgets in time
for the October 1 start of FY 2009:
- Congress has agreed on $82.4 billion for Department of Defense (DOD)
R&D programs in FY 2009, an enormous increase of $3.0 billion or 3.8 percent
to an all-time high (see Table 1). DOD’s support of
basic research would gain 12.9 percent or $210 million to $1.8 billion in 2009
(see Table 2), a 15 percent increase if earmarks
are excluded. Congress would renew a provision to cap indirect costs on basic
research grants at 35 percent. Congress would add $2.7 billion to the request
for DOD’s future-oriented investments, almost entirely for earmarked projects,
to turn a steep requested cut into a sizeable increase. DOD “Science and Technology”
(S&T) spending would reach $14.3 billion in 2009, up 6.6 percent or $882 million
over 2008 to reach 2.80 percent of the regular DOD budget (see Table 1). The research-oriented
Defense Advanced Research Projects Agency (DARPA) would do well with an 11 percent
increase to $3.1 billion in 2009, despite congressional concerns about the agency’s
ability to execute its portfolio. And DOD weapons development would increase dramatically
by $2.1 billion or 3.3 percent to an all-time high of $68.0 billion (see Table
1 and Figure 2).
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Congress has also finalized an appropriations bill providing $1.1 billion in fiscal
year (FY) 2009 for R&D in the Department of Homeland
Security (DHS), a 9.4 percent or $93 million
increase over 2008. R&D on radiological and nuclear countermeasures in the
Domestic Nuclear Detection Office (DNDO) would fall slightly with a $5 million
or 1.9 percent cut to $269 million, and chemical and biological countermeasures
R&D in the Science and Technology Directorate would also fall (down 3.7 percent
to $200 million). But there would be large increases for R&D to support other
DHS missions such as explosives, technology transitions, border and maritime security,
and protecting infrastructure, and a dramatic 56 percent increase for DHS laboratory
facilities to $162 million. University Programs funding would gain slightly by
$1 million to $50 million.
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The Department of Veterans Affairs (VA) R&D
portfolio, after climbing the past two years from emergency appropriations, would
continue to increase in the recently finalized 2009 VA budget. Congress would
give VA R&D a 6.8 percent increase over 2008 to $952 million in 2009 (see
Table 1).
The
remaining agencies are temporarily funded at FY 2008 funding levels, minus any
2008 supplementals, through March 6 or until a final appropriations bill is enacted.
The Senate drafted appropriations bills for most agencies, although none were
debated on the Senate floor. The House did not draft appropriations bills for
any of the agencies below:
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Although the Senate had hoped to add $1.0 billion to the 2009 request for the
National Institutes of Health (NIH)
for a total of $30.5 billion, an increase of 3.0 percent over 2008, the CR
funds NIH at an annual rate of $29.5 billion, the same as the request and $150
million below 2008 (down 0.5 percent). NIH R&D would fall 0.5 percent to $28.7
billion in the 2009 CR (see Table 1). NIH won $150 million in supplemental appropriations
in June for 2008, but those funds are not carried over into the 2009 CR funding
formula. Most of NIH’s institutes and centers (IC’s) would have seen their budgets
increase by 2 to 2.5 percent in the Senate plan, in contrast to a request and
CR that would keep IC funding flat or slightly declining. If the CR ends up as
the final word on the NIH 2009 budget, then NIH funding would decline in real
terms for the fifth year in a row. Funding for the NIH Common Fund (NIH Roadmap)
in the Office of the Director would have grown substantially in the request as
well as the Senate plan, but the Roadmap increase appears to be on hold until
a final NIH appropriation is enacted. Elsewhere in the Department of Health and
Human Services (HHS), a proposal to more than double biomedical countermeasures
R&D funding for the Biomedical Advanced Research Development Authority (BARDA)
in the Office of the Secretary to $250 million is on hold under the CR.
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The National Science Foundation (NSF) begins FY
2009 with a declining budget instead of a double-digit percentage gain. The Senate
Appropriations Committee drafted a spending bill that would match the Bush Administration’s
request for a 12.5 percent increase in the National Science Foundation (NSF) budget
for 2009 to $6.9 billion (see Table), a large increase designed to keep NSF on
track to double its budget between 2006 and 2016, but NSF begins FY 2009 under
the terms of the CR with $6.0 billion, the same as the 2008 budget minus $63 billion
in 2008 supplementals. NSF’s R&D investments would total $4.5 billion under
the CR, a 0.5 percent or $23 million cut that falls nearly $700 million short
of the request. All of NSF’s research directorates would have received large increases
in 2009 under both the Senate and Administration plans. NSF’s education and human
resources programs were set to gain 3.3 percent to $790 million in 2009, on top
of $40 million these programs just received in the current year as part of a 2008
supplemental bill, but they now enter 2009 with less money than in 2008.
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Although the National Aeronautics and Space Administration
(NASA) received $92.5 million in supplemental
funding for 2008 in June and in the CR, NASA starts FY 2009 with a reduced budget
when it was counting on a large increase. NASA starts FY 2009 with a budget of
$17.1 billion, far short of a $17.8 billion request and Senate appropriation.
Excluding non-R&D items such as the Space Shuttle, NASA R&D would be an
annual rate of $12.2 billion under the CR, 0.5 percent below FY 2008 and nearly
$600 million below the request (see Table 1). In a
Senate plan, the Constellation Systems program to develop the next generation
of human spacecraft was in line to receive $3.1 billion, an increase of 24.5 percent
or $606 million, and the International Space Station $2.1 billion, a $247 million
or 13.6 percent increase, as construction ramps up toward completion in 2010.
But with the NASA budget frozen under the CR, NASA has only limited authority
to move funds around to keep these and other projects on track. Separately, Congress
gave final approval in late September to a NASA authorization bill authorizing
$20.2 billion for the agency in FY 2009, far more than it now has.
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The Department of Energy’s (DOE)
Office of Science was in line for a 15 percent or more increase in 2009 because
of its key role in the President’s American Competitiveness Initiative (ACI).
But under the CR, the Office starts 2009 with $4.0 billion, $63 million below
2008 funding levels because of the removal of 2008 supplementals from the CR funding
formula, and roughly $700 million short of the request. R&D in DOE Science
totals $3.6 billion in the CR, down 1.7 percent or $63 million from 2008 and down
$740 million from the request. Most Science programs would
have received substantial increases to hit historic highs, but those plans are
on hold until Congress finalizes 2009 appropriations. Total DOE R&D would
remain mostly flat under the CR at $9.7 billion, down 0.6 percent, with the energy
and defense portfolios starting the new fiscal year flat. The Senate was planning
to dramatically boost funding for DOE’s energy R&D programs by 22 percent
to $2.9 billion in 2009 after enormous increases in 2007 and 2008, in contrast
to a flat request, but those plans have been shelved for now. A last-minute attempt
to add up to $500 million in emergency 2009 appropriations for energy R&D
also appears to have failed.
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The U.S. Department of Agriculture (USDA) is one of the few federal departments to do better under a CR than
in earlier budget proposals. The Senate hoped to add hundreds of millions
of dollars to a 2009 budget request for USDA R&D that proposed a 16 percent
cut, for a new Senate total of $2.3 billion, 1.7 percent less than 2008 (see Table
1). But the CR retains 2008 funding for discretionary programs, including funding
for 2008 earmarks, and allows additional mandatory funding to become available
so USDA starts the year with $2.4 billion for R&D programs, $457 million more
than requested and $53 million or 2.2 percent more than 2008. Although USDA will
have to ration its CR discretionary funds in the expectation that a final appropriation
will be lower, the agency can begin spending $88 million in new 2009 mandatory
research funding enacted in the June 2008 farm bill (up from $30 million in 2008)
for organics research, specialty crops research (fruits and vegetables), and bioenergy
research.
- Congress hoped to give large increases for both of the Department
of Commerce’s main R&D units, the National
Institute of Standards and Technology (NIST) and the National Oceanic and Atmospheric
Administration (NOAA), but instead Commerce starts FY 2009 flat funded at $1.1
billion for its R&D portfolio. The Senate would have awarded increases for
all parts of the Department of Commerce R&D portfolio, trimming proposed increases
for the intramural research activities of the National Institute of Standards
and Technology (NIST) in order to save two extramural NIST programs from proposed
elimination. R&D in the National Oceanic and Atmospheric Administration (NOAA)
would have gained 8.9 percent to $633 million in the Senate plan instead
of a requested cut. For now, the Bush Administration’s plans to eliminate NIST’s
Technology Innovation Program (TIP) and the non-R&D Manufacturing Extension
Partnership (MEP) program are on hold.
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The House, Senate, and the President all proposed to boost R&D funding in
the Department of Transportation (DOT), with cuts
to aviation R&D balanced by large increases for highway R&D, but with
Congress failing to complete action on a final 2009 DOT appropriation, the department’s
programs are flat funded under the CR.
DOT R&D begins the new fiscal year at $820 million, even with 2008.
- Neither the House nor the Senate Appropriations
Committees drafted an Interior-Environment appropriations bill, so there are no
figures as to how Congress would like to fund R&D in the Department of the Interior or the Environmental Protection Agency (EPA). The Bush Administration requested cuts for R&D in both agencies, and
early indications were that Congress would turn the requested cuts into increases.
But in the face of presidential veto threats over the committees’ plan to add
billions in funding on top of the request, and in the face of a growing movement
to add offshore oil-drilling language, both committees canceled markups of the
Interior-Environment bill. Both agencies start FY 2009 at 2008 funding levels,
meaning both have more money now than they requested.
Budget Outlook: Waiting
Until the New Year
In
June, the Congress reached final agreement on an FY 2009 budget resolution, which
established a congressional total for discretionary appropriations. The budget
resolution allocated $1,013 billion for regular (non-emergency) FY 2009 appropriations,
$21 billion more than the President’s request. The budget assumed roughly the
requested amount for defense discretionary programs, so the additional $21 billion
would have allowed nondefense programs overall to increase slightly ahead of inflation,
instead of declining as in the President’s request. Congress hoped to use a significant
chunk of the additional $21 billion to turn some requested cuts in R&D programs
into flat funding or increases while sustaining large increases for key science
programs. In Senate appropriations actions, appropriators endorsed large requested
increases for three signature Bush Administration priorities: research funding
in the three physical sciences agencies of the ACI, development funding in NASA
for new human spacecraft, and development funding for new weapons systems in DOD.
But appropriators also turned requested cuts into increases for agricultural and
environmental research programs, NIH biomedical research, NASA’s research portfolio
and NIST’s extramural programs, among others.
But
the President’s threat to veto any appropriations bills that exceed his request
and the Democratic Congress’ decision to therefore delay most bills until a new
President takes office in January brought the entire 2009 process to a halt. Congress
hopes to avoid a repeat of last year’s 2008 process, when Congress went into the
2008 appropriations season with $21 billion more than the President, but after
actual and threatened presidential vetoes gave up the extra $21 billion and produced
a December 2008 omnibus appropriations bill that stuck to the President’s total
and trimmed the ACI increases in order to increase funding for other areas.
The
CR extends to March 6, indicating that Congress intends to wait until after the
inauguration to finalize the remaining 2009 appropriations bills. Most likely,
lawmakers will spend the month of February writing final versions of the 9 remaining
appropriations bills and then roll them into a single omnibus bill. Clearly, Democratic
leaders hope that Sen. Barack Obama (D-IL), who voted for the budget resolution
containing the additional $21 billion, will be the President to sign the remaining
2009 appropriations into law, instead of Sen. John McCain (R-AZ) who did not vote
on the budget resolution but who has voted with his Republican colleagues to sustain
the President’s budget priorities in the past.
But
even though Sen. Obama is regarded as more likely to accept additional domestic
appropriations than his opponent, whoever is President in early 2009 will face
a more difficult fiscal climate. The financial sector rescue moving through Congress
could be in full force by early next year, with hundreds of billions of dollars
flowing out of the U.S. Treasury to buy mortgage-backed securities. The projected
budget deficit in FY 2009 will almost certainly climb over the next few months,
putting pressure on Congress and the next President to scale back government spending.
In response, lawmakers may hold to their attempts to add $21 billion to the request
for domestic appropriations, but there is also a strong chance they will scale
back spending when finalizing the remaining appropriations bills, or even extend
the current CR to cover the entire fiscal year.
Although
Congress supports the full requested increases for American Competitiveness Initiative
programs and funding well above requested levels for biomedical research, environmental,
and energy R&D, the later the appropriations process goes the more likely
it is that lawmakers will abandon or scale back these increases. Federal agencies,
most of which already face frozen budgets five months into the new fiscal year,
are left with few clues as to what their final funding levels will look like.
And the U.S. science
and engineering community once again faces many months of waiting to find out
what the federal government’s fiscal commitment to R&D in FY 2009 will be.
(This analysis is one of a series
of AAAS R&D Funding Updates on FY 2009 congressional appropriations. The complete
series of AAAS R&D Funding Updates, including continually updated analyses
of R&D in FY 2009 appropriations, is available on the AAAS R&D Web Site (http://www.aaas.org/spp/rd)
in the “FY 2009 R&D” or the “What’s
New” sections.)
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September 30, 2008
