Guide to the President's Budget: Research and Development FY 2018

6 September 2017

by: Matt Hourihan, David Parkes

This is the latest in AAAS' long-running series reviewing research and development proposals in the President's budget. An overview of the FY 2018 request, released in May 2017, is below. For agency breakdowns and tables, download the full report (1.4 MB).

Please also see our appropriations dashboard and bill tracker for Congressional updates.

Introduction and Context

When President Donald Trump stunned the political world with a surprise victory in November 2016, the victory came with no clear positions on matters of science and technology funding – and, indeed, somewhat limited fiscal detail in general, especially regarding discretionary spending.[1] On the campaign trail, candidate Trump did float the idea of a “penny plan” to reduce federal agency spending,[2] while favoring some level of infrastructure investment. On science-specific questions, Trump seemed to favor NASA’s exploration mission while stopping short of pledging robust funding; on the other hand, he referred to the National Institutes of Health (NIH) as “terrible.”

Some clarity emerged regarding the new administration’s intentions with President Trump’s selection of Rep. Mick Mulvaney, R-S.C., to serve as Office of Management and Budget director. In his time on Capitol Hill, Mulvaney developed a reputation as a staunch foe of federal spending and was cofounder of the fiscally conservative House Freedom Caucus.[3] In addition, the conservative Heritage Foundation, which has regularly advocated for sharp cuts to many federal science and technology programs, also played a big role in the presidential campaign and transition.[4]

While signs increasingly pointed to a difficult FY 2018 budget for science, the budget that was finally revealed – first through release of a budget blueprint in March, followed by the full detailed request in late May – stunned many in the science and engineering community. In the aggregate, the White House’s proposed funding reductions for scientific research were the largest of any administration in at least 40 years. Some elements of the budget might have been predicted: Certainly a scaling back of federal climate research programs was expected, given administration rhetoric. The administration also emphasized reductions in federal technology programs in energy and manufacturing. But particularly surprising was the administration’s targeting of basic science programs at agencies like the NIH and the Department of Energy Office of Science. While fiscal conservatives have often been critical of federal environmental science programs (which can underpin regulatory efforts) and federal technology programs (which they argue can lead to waste or industrial favoritism), basic discovery science has long been more widely regarded as an appropriate function for government.[5] By targeting discovery science, the FY 2018 budget thus charted new ideological territory in the Oval Office.

Of course, as with any presidential budget, the real question is not what it proposes, but what Congress thinks of it. While one would expect Democrats to reject the budget, as they did, the early reaction from many congressional Republicans was similarly negative.[6] Not long after the release of the March blueprint, Congress largely rejected the administration’s call for immediate cuts in FY 2017 spending and instead passed an omnibus with targeted science program increases.[7] At the time of this writing, the House of Representatives had already begun unveiling FY 2018 appropriations bills with mixed increases and decreases for assorted science and technology programs – a very different course than the deep cuts envisioned by the administration. While these early signs suggest Congress will ultimately carve out its own take on science funding for FY 2018, two major X factors remain: the lack of agreement on ultimate discretionary spending levels, and the presidential veto.

The FY 2018 Budget: An Overview

See Figure 1 above for overall budget totals. On the discretionary front, the White House proposes very large reductions to the nondefense discretionary spending cap in FY 2018, cutting that portion of the budget by $54 billion or 10.9 percent below FY 2017 levels in order to boost defense spending (see Figure 2 and Figure 3). The White House budget would continue cutting nondefense spending beyond FY 2018 by over 2 percent annually before inflation. As a result, the nondefense discretionary budget in 2027 would be 41.9 percent less than in 2017, adjusted for purchasing power. Over the decade, total nondefense spending would decline by 29 percent in the aggregate. This would take nondefense discretionary spending into uncharted territory, pushing it below 2 percent of U.S. GDP for the first time in at least half a century (Figure 4 below).

This matters for R&D funding because every science and technology agency and program outside the Department of Defense and the National Nuclear Security Administration is housed in the nondefense budget. Most programs generally move in accord with this budget: When it declines, most science agencies decline to varying degrees, and the same is true when it increases.[8] Bringing the nondefense budget to the historically low levels proposed would almost certainly have substantial ripple effects on even popular science programs.

R&D in the Request

In accord with these shifts away from nondefense to defense, the White House budget proposes a major increase for defense R&D coupled with a steep cut to research activities, primarily funded through nondefense dollars (Figure 5).

Of particular note are the reductions in nondefense basic and applied research of over 17 percent each, larger than any administration has proposed in over 40 years.

Under these reductions, total federal R&D would drop to 0.76 percent of gross domestic product, whereas research funding specifically would drop to 0.31 percent of GDP. Both metrics would represent 40-year lows.