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U.S. R&D Budget Likely Facing a Generation of Challenges, Experts Say at AAAS Forum

The U.S. economy is slowly growing stronger. Unemployment is on the wane. In negotiations that led to agreement on the fiscal 2011 U.S. budget, an important core of science initiatives was largely spared from the deep cuts imposed on other programs, and President Barack Obama has proposed a healthy increase in research spending for 2012.

Despite these promising signs, however, the climate for federal science now seems likely to get much more difficult.

Speaking at the annual AAAS Forum on Science and Technology Policy, top budget and science policy analysts predicted that the U.S. research enterprise will face significant budget and political challenges in 2012 and in the next several years, at least. Meanwhile, a generation of aging baby boomers and new generations of immigrants will drive a demographic shift that could have significant implications for science, science education, and the S&T workforce over the next half-century.

“Although the outcome of the fiscal 2011 budget process was better than many expected, there was little celebration at the Forum,” observed Al Teich, senior policy advisor at AAAS and one of the Forum’s organizers. “The mood was rather downbeat as participants recognized the scope of the problems facing the nation. Still, it was reassuring to know that the president understands the importance of a strong science and technology enterprise and is committed to supporting it. ”

The 36th annual AAAS Forum convened in Washington, D.C., from 5-6 May, with nearly 500 U.S. and foreign leaders from government, education, and business attending to hear top policy experts talk on critical science-related issues. The Forum’s two-day program, organized by AAAS Science and Policy Programs, this year had a strong focus on the federal investment in science and technology and the outlook for innovation, both in the United States and worldwide.

But despite recent improvement in the nation’s economic health, the forecast that emerged from a half-day session on R&D budget and policy issues suggested that profound challenges are looming.dic Table of Videos,” by Brady Haran and Martyn Poliakoff.

Catherine L. Mann

The Big Picture

Catherine L. Mann, an economist at Brandeis University, put the U.S. situation in a global context:

Despite the annual U.S. budget deficit that has exceeded $1 trillion since 2009, global investors concerned about banking and debt problems in Europe have put disproportionately more than normal of their funds into U.S. Treasury securities; in effect, they are financing the federal borrowing. At the same time, the dollar’s weakness compared to other currencies has made industrial supplies and materials and other capital goods a relative bargain overseas, so exports have been the leading factor in the U.S. economic recovery.

But that raises a range of issues for the U.S. economy, Mann suggested. For example, a strengthening economy would typically strengthen the value of the dollar. But if the dollar gets stronger, exports could suffer because the prices paid for U.S. goods overseas would rise. The current account deficit would widen, demanding more and more financing from foreign investors.

Mann, the Barbara and Richard M. Rosenberg Professor of Global Finance at the Brandeis International Business School, said that a sustained recovery could be threatened by other factors, too: high oil prices; a weakening stock market; and a decision by foreign investors to move away from U.S. Treasury securities, which would tend to raise interest rates.

“Probably the biggest problem that we face right now for sustaining the recovery is the situation with regard to the U.S. budget,” she added.

David Pomerantz

While projections show that economic recovery will reduce the deficits from now through 2014, the deficit would stabilize at $600 to $800 billion a year. That trend would hold into the 2020s, she said—unless there is some combination or reduced expenses or increased revenues. Financing a budget deficit of this magnitude is inconsistent with foreigners’ historical investment preferences—and, Mann said, that points to an unsustainable situation.

David Pomerantz, director of the Democrats’ staff on the House Appropriations Committee, sounded similar themes.

He cited twin signs of structural weakness: The federal government’s revenues are currently about 15% of gross domestic product (GDP), the lowest since about 1950; federal spending is about 24% of GDP, the highest rate since World War II. If the borrowing is not eased, he explained, other borrowers who might have plans for business expansion or other projects could be forced out of the borrowing market.

“Economic growth is essential to restoring fiscal stability,” he told the Forum audience. “We currently appear to be in a recovery, but it is fragile and jobs are lagging.”

Patrick J. Clemins

The Federal R&D Budget: 2011 and 2012

According to Patrick J. Clemins, director of the AAAS R&D Budget and Policy Program, the economic recovery over the next several years will help moderate the revenue and debt issues. But, he said in his presentation, the problem will not disappear without intervention.

The current budget battles in Washington, D.C., Clemins suggested, can be seen as a conflict over what sort of intervention will be most effective.

After hard-fought negotiations between the White House and Congress, the 2011 budget was set at $3.8 trillion, with a $1.6 trillion deficit. The total R&D budget for 2011 was set at $144.4 billion, down $5.2 billion—or 3.5%—from the 2010 budget year. But funding for basic research held steady; the cuts came out of applied research, development, and facilities. Defense R&D absorbed a bigger proportion of the cuts than the non-defense side.

The Obama administration has proposed a fiscal 2012 budget of $3.7 trillion, with the deficit narrowed to $1.1 trillion. R&D spending would rise $4.7 billion, or 3.3%, to $149.1billion. Basic research would rise 11.1%, with applied research rising


John P. Holdren

In his keynote address to open the Forum, White House science and technology adviser John P. Holdren explained the rationale for the 2012 increase. “You can see from these figures that the president remains committed to robust growth in the key dimensions of science and technology across departments and agencies,” he said.

Holdren is the assistant to the president for science and technology, director of the White House Office of Science and Technology Policy, and co-chair of the President’s Council of Advisors on Science and Technology. While science fared relatively well in the 2011 budget agreement, he said, there were some significant losses.

For example, the budget of the National Oceanic and Atmospheric Administration sustained a cut of about $400 million, or 8.5%, to $4.3 billion. Much of that funding was for a new generation of polar orbiting satellites; the lost funding will likely create “a very significant gap in weather-forecasting capabilities,” he said.

Despite the economic challenges, Obama remains committed to maintaining American S&T leadership in an increasingly competitive world. In the president’s view, Holdren said, “science and technology are not just germane to success with these challenges—they are central to success.”

Some of the increase proposed for 2012 is focused on three agencies seen as crucial to the sort of basic research that provides a foundation for future innovation: the National Science Foundation, the Office of Science in the Department of Energy, and the National Institute of Standards and Technology. Each would be moved back on course set in 2006 to double their budgets within a decade.

But Holdren’s address also featured a frank acknowledgement that budget constraints and political opposition will create tough going in many sectors of the federal science and technology enterprise for the foreseeable future. “An enormous challenge… will be sustaining support for science and technology in a regime of overall budget cuts,” he said.

Science-related education, energy and climate change, and international science cooperation are all top White House priorities—and, Holdren said, all could come under pressure as the 2012 budget moves through Congress.

Pomerantz agreed, and cited a specific example of the pressure on energy and climate projects: Funding for the Advanced Research Projects Agency-Energy—ARPA-E—hit $400 million split between 2009 and 2010. In 2011, the appropriation fell to $180 million. Now Obama is proposing $550 million for 2012.

But “that’s not a very likely prospect, unfortunately,” Pomerantz said. “Some of this reflects more than budgetary concerns. There’s an element, especially in the House, that is repelled by the notion of clean energy or climate research.”

Will Changing Demographics Change Science?

Robert M. Groves

While the budget process unfolds in Washington and in state capitals nationwide, there is another force emerging that could have a long-term effect on science: demographic change. The United States is growing older and immigrants comprise a growing proportion of the population, said Robert M. Groves, director of the U.S. Census Bureau. And, he said, there is increasing income disparity between the affluent and low-income people.

Overall, the U.S. rate of population growth is slowing, Groves told the Forum. In 2000, census figures showed that about one-third of Americans were 45 years old or older. Those numbers will continue to grow as the Baby Boom generation moves into retirement—and onto the rolls for Social Security and Medicare.

At the same time, much of the nation’s population growth is coming from immigrants, especially those from Asia and Latin America. Immigration, of course, is a familiar part of the American story. Between 1860 and 1920, census figures show, immigrants regularly made up 13-15% of the U.S. population. By 1970, that proportion had declined to 4.7%, but it has risen steadily since and in 2009, foreign-born residents made up 12.8% of the population.

The latest wave of immigration is changing U.S. culture again. Students arrive in the Los Angeles school system speaking over 130 different languages, Groves said. And most other developed nations are having a similar experience.

All of these changes have implications for the nation’s research enterprise. Some cited by Groves are general: A society that’s preoccupied with social cleavages and tensions will have less capacity for focusing on science. But others are more specific.

For example, census figures show that Asians 25 and older, when compared with whites, African Americans, and Hispanics, have the highest rates of attending college and receiving bachelors or advanced degrees. Hispanics, on the other hand, have significantly lower rates of educational progress than any other group—nearly 40% don’t complete high school.

That trend carries over to the workforce in science, technology, and engineering fields, Groves said. About 30% of Asians have a bachelor’s degree in those fields, far higher than for whites or African-Americans. But for Hispanics, the number is only about 5%.

The implications of these patterns for the education system are “massive,” he told the Forum. “We have to take it seriously. We have to think in the long-term or we won’t do well as a society.”

But the changes will ripple far beyond schools, from settlement patterns and transportation needs to national values and world-view.

“We are going to be a fantastically changed country,” Groves said. An older, predominantly white generation “is going to be leaving. We’re going to be replaced by others. They will be different from us. The will have different lenses through which they view social problems and, I suspect, some science problems.”

See the presentation slides for John P. Holdren; Patrick J. Clemins; Robert M. Groves; and Catherine L. Mann.

See the full program and other presentation materials from the 36th annual AAAS Forum on Science and Technology Policy.

See more news coverage of the 2011 Forum