Order Code IB10088
CRS Issue Brief for Congress
Received through the CRS Web
Federal Research and Development:
Budgeting and Priority-Setting Issues,
107th Congress
Updated March 25, 2002
Genevieve J. Knezo
Resources, Science, and Industry
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
FY2002 Budget Action
FY2003 Budget Request
Counter Terrorism Funding
Congressional Budget Action, FY2003
Priority-Setting Issues
Role of the Federal Government in Supporting R&D
Trends in Federal R&D Support
Observations and Recent Legislative Initiatives
Priorities Among Fields of Federally Funded Research
NIH Funding Is Important to Congress
Congressional Views About the Balance in Federal R&D Funding
Professional Groups’ Views About Balance
Proposals to Increase NSF Funding
Federal R&D Priority-Setting Structures
Unified Science and Technology (S&T) Budget
Interagency R&D Initiatives
Proposals to Coordinate Federal R&D
Legislation Introduced to Fund the OTA
Elevation of DOE and EPA Science Functions and Proposals to Abolish S&T-Related
Agencies
Earmarking
Government Performance and Results Act (GPRA)
LEGISLATION

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Federal Research and Development: Budgeting and Priority-Setting
Issues, 107th Congress
SUMMARY
Federal R&D funding priorities change
mine “balance” in funding between health and
over time, reflecting Presidential and national
nonhealth fields.
preferences. Defense R&D predominated in
the 1980s, decreasing to about 50% of federal
Legislative priority-setting initiatives
R&D in the 1990s during the Clinton Adminis-
include bills to double the NSF budget within
tration. In nondefense R&D, space R&D was
5 years (H.R. 1472); and to make permanent
dominant in the 1960s as the nation sought to
the research and experimentation tax credit,
compete with the Soviet Union; energy R&D
including credit for industrial support of aca-
became an additional priority during the
demic basic research (H.R. 1137, H.R. 1329,
energy-short 1970s, and, since the 1980s,
S. 41, and S. 515).
health R&D has predominated. Defense R&D
has started to dominate again as priorities have
The Bush Administration included in its
shifted to deal with the war against terrorism.
budget request a “Federal S&T” budget, which
The FY2003 budget request seeks to increase
may presage a future unified science and
R&D funding by about 8% overall, including
technology (S&T) budget. The FY2003
increases for the Department of Defense
budget also requested funding for four inter-
(DOD) and National Institutes of Health
agency R&D initiatives, in contrast to the ten
(NIH). R&D funding would increase also for
initiatives in the FY2001 budget. Other pro-
the Departments of Education and Veterans
posals to coordinate R&D include a continuing
Affairs, and EPA, NASA and NSF, although
priority-setting mechanism; a cabinet-level
some of these latter increases are due to pro-
S&T body; functional R&D budgeting; eleva-
gram shifts and new methods of counting
tion of the status of science decision-making in
programs that were not formerly counted as
the Department of Energy (DOE) and EPA
R&D. R&D funding would decrease in the
(H.R. 64) to, among other things, promote
Departments of Agriculture, Commerce,
physical sciences; and reestablishment of the
Interior, Transportation, and other areas. If
Office of Technology Assessment in Congress
the 16% increase in NIH R&D funding were
(H.R. 2148) or a Science and Technology
not counted, civilian R&D funding would fall
Assessment Service (S. 517). The Administra-
by 0.2%. Counter terrorism R&D funding is
tion opposes earmarking for R&D, which it
requested to double to about $3 billion.
said totaled about $1.8 billion in FY2002 and
because the practice distorts agency priorities.
National R&D funding continues to
The Administration has started to use some
grow, but the federal R&D share, while sur-
performance measures for R&D budgeting,
passing the previous peak of 1992 in constant
inspired by the Government Performance and
dollars, has declined to 27% of the national
Results Act. However, the Administration and
total. Scholars and policymakers cite the
critics say better data and concepts are needed
importance of R&D funding to economic
to use performance budgeting for basic and
growth. Debates focus on whether federal
applied research. OMB judged agencies that
R&D should be increased across the board;
fund R&D using performance management
how priorities should be set; and how to deter-
measures, with NSF winning accolades for its
financial management procedures.
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
The FY2003 budget was submitted to Congress on February 4, 2002. The Budget
Resolution (H.Con.Res. 3530 Was agreed to in the House on Mar. 21, 2002.
BACKGROUND AND ANALYSIS
Federal R&D funding priorities have shifted over time, reflecting Presidential preferences
and national priorities. Defense R&D predominated in the 1980s but decreased to about 50%
of total federal R&D in the 1990s, reflecting the Clinton Administration policy. In nondefense
R&D, space R&D was dominant in the 1960s as the nation sought to meet Presidential
pronouncements and to compete with the Soviet Union in the space race; energy R&D joined
space as a priority during the 1970s; and since the 1980s, health R&D funding has grown as
the cohort of aged population increases and the promise of life sciences and biotechnology
affects national expectations. Defense, health, and counter terrorism R&D funding are
projected to increase in this budget cycle. See Figure 1. (See also CRS Report RL30905,
Federal Research and Development: Budgeting and Priority-Setting, 1993-2000.)
FY2002 Budget Action
The FY2002 Bush Administration R&D budget request, at $96.5 billion, would have
increased R&D funding by 6.1% over the enacted FY2001 level. Funding increases were
proposed for the Department of Defense (DOD) and for the National Institutes of Health
(NIH), proposed to be increased to 52% of the nondefense R&D budget. R&D funding was
to be flat or decline for the Department of Agriculture; for the Department of Commerce, for
the Environmental Protection Agency (EPA); for the Department of the Interior, reducing the
U.S. Geological Survey and Biological Research; for the Department of Energy (DOE),
reducing energy R&D, energy conservation, and fossil energy and increasing the Office of
Science (funding for the Spallation Neutron Source and for the National Ignition Facilities);
and for the National Science Foundation (NSF).
Federal defense and nondefense R&D is funded from the discretionary (as opposed to
mandatory) portion of the budget and was subject to annual caps through 2002 that are based
inflation rates and other factors. (The budget request proposed to revise these caps and
extend them through 2006.) The discretionary budget was proposed to be increased 4.0%
over FY2001. Nondefense R&D would have increased by about 4.3%, mostly for NIH, so
that other nondefense R&D funding (excluding NIH) would have decreased by about 3.0%.
For FY2002, the request for budget function 250, “General science, space, and technology,”
which covers about 25% of federal R&D (for NSF, NASA’s space activities, and DOE’s
basic research),was $21.0 billion in budget authority. The conference report (H. Rept. 107-
55) on the budget resolution, H.Con.Res. 83, lowered funding for function 250 to $21.6
billion, decreasing budget authority below both the House and Senate-approved levels for
FY2001, but still more than the requested amount.
Appropriations action raised FY2002 federal R&D funding above the requested levels
for all agencies and raised total R&D funding to about $103.7 billion. Pressures to double
the NIH budget and new priorities and funding to combat terrorism affected R&D
appropriations levels. OMB’s FY2001 Annual Report to Congress on Combating Terrorism,
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indicated that for FY2002, the Administration requested about $555 million for counter
terrorism R&D in several different agencies before the terrorist attacks of September 11. The
largest agency supporters are the DOD and the Department of and Health and Human
Services. Congress appropriated about $1.5 billion for FY2002 counter terrorism R&D, with
about one-half from regular appropriations, and one-half from emergency appropriations1 in
P.L. 107-38. (For additional details, see Federal Research and Development for Counter
Terrorism, CRS report RL31202.)
FY2003 Budget Request
The President’s R&D request totals about $112 billion, about 8% more than the
appropriated level for FY2002. Similar to the patterns of funding increases for FY2002, the
increases for DOD R&D, at $5.4 billion, or 11% more than last year, and for NIH, at $26.5
billion, or about 16% more than last year, account for most of the total funding increase,
leaving all the other R&D funding agencies combined with less money than in FY2002.2
Total defense R&D funding (for DOD and the Department of Energy’s military/nuclear
programs) would increase by almost 10%. As a result, while overall discretionary spending
(from which most all R&D is funded) would rise almost 7% over FY2002, total non-defense,
non-NIH R&D funding would decline or be flat. DOD R&D funding, spurred in part by anti-
terrorist priorities, would rise to 52.4% of the federal R&D budget, up from 52.1% in
FY2002. Most DOD R&D funding would go to the development/testing end of the funding
spectrum, and DOD basic and applied research (called S&T funding in DOD terms, including
funding categories 6.1, 6.2, 6.3, and medical R&D), would actually decline by about 4% from
the FY2002 level. The increase in funding for NIH, would raise NIH R&D funding to about
$26.5 billion, making its funding total about the same as the rest of all other non-DOD
agencies’ R&D funding combined, at about $26.7 billion. The rise in NIH is attributable to
this being the fifth and final year of the congressionally adopted policy to double NIH’s
funding by 2003 and in part to increased counter terrorism funding. See Table 1.
The budget request would increase funding for the Department of Veterans Affairs by
6.3%; the Environmental Protection Agency, 5.9%; NASA, 4.3% (with most NASA
increases, according to AAAS, due to OMB including as R&D some non-R&D support costs
which formerly were not counted as R&D); and NSF, 3.5% (with almost 60% of the
“increases” largely attributable to transfer of programs from other agencies, including the
National Sea Grant Program from Commerce, hydrological sciences from Interior and
environmental education from EPA). Decreases were requested in R&D for the Commerce
Department, -0.3%, reducing funding for the Advanced Technology Program (ATP) by over
40% and the Manufacturing Extension Program by almost 90%, offset by increased funding
for NIST intramural R&D and for some R&D in National Oceanic and Atmospheric.
Administration. Decreases were proposed also for the Interior Department, - 4.8 % with cuts
to the U.S. Geological Survey, and for water resources R&D; the Department of Energy, -
0.5%, with a reduction for earmarks, Spallation Neutron Source construction, and for R&D
on natural gas and petroleum technologies, with offsetting increases for coal R&D; and for
the Department of Agriculture, -9.3%, due to reducing programs that can be earmarked and
1 “Federal R&D Climbs to Record High of $103.7 Billion,” AAAS R&D Update, Dec. 28, 2001.
2 AAAS, “Bush Proposes Large Increase for DOD, NIH R&D: Mix of Cuts and Increases for Other
R&D Programs,” Feb. 8, 2002.
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the loss of emergency anti-terrorism funds, combined with increases for competitive research
grants in the National Research Initiative. Reductions in R&D at DOT may represent the
transfer of funds to a new Transportation Security Administration. As for outyear
projections, AAAS calculations show that nondefense R&D would increase by 8.2% from
FY2002 to FY2007 after adjusting for inflation. If NIH nondefense R&D were excluded it
would rise only 1.6% in inflation-adjusted terms. Defense R&D would rise 8.1% by 2007.
The Administration also identified a subset of the R&D budget, called a “Federal S&T
budget,” totaling $57 billion, that focuses on basic and applied research leading to the creation
of new knowledge. It includes some education and training funding and excludes most
development funding. This conceptualization is similar, but not identical, to a proposal made
by the National Academy of Sciences (NAS) in 1995.
Some funding cuts have been attributed to the Administration’s campaign to eliminate
congressional R&D earmarks, others would decrease R&D funding levels that had been
increased in 2002 because of counter terrorism funding. Increases are planned for counter
terrorism, laboratory security, and basic research (to be increased by about 9% to $25 billion,
the highest level ever reached). Since OMB has proposed deficit funding, after four years of
surplus spending since 1998, for a budget which seeks to increase such spending to about
$767 billion, Congressional debates could focus on discretionary spending priorities for R&D
versus other areas, including tax cuts, funding for domestic programs, and homeland defense.
Election year politics could increase pressure for more discretionary spending.
Counter Terrorism Funding
OMB director Mitch Daniels announced the likelihood that federal funding will be
reduced in the future for activities that do not contribute to combating terrorism.3 OSTP
Director John Marburger testified before the House Science Committee on February 13,
2002, that counter terrorism R&D funding is likely to increase from about $1.5 billion in
FY2002 to about $3 billion for FY2003. The FY2003 budget request does not give budget
details for anti-terrorism R&D funding, but it notes that “over the next six months OMB,
OSTP, and the Office of Homeland Security will be working though the National Science and
Technology Council (NSTC) to develop a coordinated, interagency R&D plan for
antiterrorism” that will also include cross-agency budget information. NSTC has established
a Anti-terrorism Task Force. Preliminary figures show that major counter terrorism R&D
increases were proposed for the National Institute of Allergy and Infectious Diseases, at $1.5
billion for bioterrorism R&D and for construction of containment facilities; for the Agriculture
Department, increased $34 million to $406 million; for NIST, $5 million; for DOD, for anti-
terrorism technologies; and for cybersecurity R&D in the Bureau of Export Administration,
Department of Commerce, at an additional $20 million.4 (See also CRS Report RL31202.)
3 Glenn Keller, “OMB Chief Signals New Spending Goals,” Washington Post, Oct. 17, 2001, p. A3
and Nancy Ognanovich, “U.S. Budget, OMB’s Daniels Mulls Spending Freeze, Other Restraints to
Rein in Lawmakers,” Daily Report for Executives, Oct. 19, 2001, p. A-20.
4 See: Jocelyn Kaiser, “Bioterrorism Drives Record NIH Request,” Science, Feb. 1, 2002; “Homeland
Security,” by G. Martinez, “ Agriculture;” J. Torobin, “Commerce;” N. C. Sorrells, “Defense;” CQ
Monitor News, Feb. 6, 2002; and Juliana Gruenwald, “Bush’s 8% R&D Boost Reflects New Priorities
In Wake of Terror Attacks,” Daily Report for Executives, Feb. 5, 2002.
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Congressional Budget Action, FY2003
R&D budgets are developed over an 18-month period before a fiscal year begins. Often
advisory committees, influenced by professional scientific groups, recommend R&D priorities
to agencies, which use this information, internally generated information, and guidance from
the Office of Management and Budget (OMB) and the OSTP to determine priorities.
Agencies and OMB negotiate funding request levels during the preparation of the budget
before it is sent to Congress. After standing committees recommend budget levels for matters
within their jurisdiction to the budget committees, Congress passes a budget resolution, which
sets spending levels and recommends levels for each budget function that appropriations
committees use in setting discretionary spending allocations (called 302b allocations) for each
appropriations subcommittee. The resolution also gives outyear projections based on budget
and economic assumptions. Each of the 13 appropriations committees report approved
funding levels for agencies within their jurisdiction; appropriations bills, which give agencies
spending authority, are sent to the floor, usually beginning in the summer. In the House
Budget Resolution passed on March 21, 2002, the proposed FY2003 discretionary budget
authority function totals for Defense and General Science, Space and Technology are higher
than those proposed by the President. For the science function the resolution would provide
$22.601 billion vs. the request of $22.532 billion. The summary documents show the
assumption of a 9% increase for NSF; the Administration had requested a 5% increase; the
programmatic transfers called for in the President’s budget are included. The resolution also
adopts the President’s recommendation to complete the doubling of the NIH budget in
FY2003.
Priority-Setting Issues
Current priority-setting debates focus on the functions and size of federal R&D funding
as a part of national R&D and on how to balance priorities in the portfolio of federal
nondefense R&D, especially between health and nonhealth R&D.
Role of the Federal Government in Supporting R&D
A core issue is to reconcile the benefits of R&D – the projected high rates of return to
the economy and society from investments in R&D – with a FY2003 R&D budget request
that emphasizes defense and health R&D spending and flat or modest increases in other areas
of R&D and likely long-term economic and budget projections of decreasing outyear federal
R&D budgets.5 President George W. Bush’s FY2002 budget said, “More than half of the
Nation’s economic productivity growth in the last 50 years is attributable to technological
innovation and the science that supported it” (p. 29). In Spring 2000, President Clinton’s
Committee of Advisors on Science and Technology (PCAST), in Wellspring of Prosperity,
described some of the payoffs from federal investments in R&D, which it said “underscores
the need for sustained and cooperative support in the 21st century to avoid the dangers and
seize the opportunities” (p. 2). The report described how Federal Reserve Chairman Alan
Greenspan in 1999 “repeatedly cited an unexpected leap in technology as primarily
responsible for the nation’s record breaking economic performance. In particular, a
5 See Steven Parson and John Jankowski, “Sixth Year of Unprecedented R&D Growth Expected in
2000,” NSF Data Brief, Nov. 29, 2000, p. 1. NSF 01-310.
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technology-based surge in productivity appears to be contributing substantially to our
economic success” (pp. 1-2).
Trends in Federal R&D Support. Given these assessments of the importance of
federal R&D, a key priority-setting issue is how large should the federal R&D budget be in
relation to its functions and the funding provided by such other R&D supporters as industry?
Federal R&D funding, while rising in terms of absolute (or nominal) dollars, is declining
as a part of the national R&D total, which has grown overall to $264 billion in FY2000. In
constant 1996 dollars, total national R&D increased 40% between the years 1990 and 2000,
with industrial support for R&D increasing 88% but federal government support decreasing
by 10%. Federal R&D has also declined from about 17% of total federal discretionary
outlays in FY1965 to about 12% today.6 In part because of economic pressures and
budgetary caps, during the years FY1993 to FY1999, federal R&D funding was below the
previous constant-dollar high of FY1992. As a result of Congressional action, constant-dollar
R&D appropriations started to eclipse the FY1992 level beginning with FY2000. However,
concerns that had been raised about the declines in federal R&D funding between 1992 and
1999 have not abated because of current projections of economic slowdown, spending to
combat terrorism, and a return to deficit spending, which could raise congressional objections
to proposals to increase discretionary spending.
Industry is the largest supporter and performer of national R&D, funding 68% of total
R&D (the government’s share is 27%), and conducting 75% of the total. Most industrial
R&D is for near-term applied work and product or prototype development. The government
funds 10% of R&D performed by industry. Federal support for all development, which totals
about 55% of federal R&D, goes largely to industry and to defense R&D.7
The federal government, in contrast to industry, focuses more on supporting basic
research and academic R&D. In FY2000, 31% of federal R&D expenditures went to basic
research, that is long-term research, compared with 8% of industry-funded R&D. The federal
government funded half of all national expenditures for long-term basic research (largely in
universities and federal laboratories), while industry funded 31%.8 Universities and colleges
are the second-largest performer of national R&D, funded mostly by the federal government
(58% of university research). About half of federal research dollars go to universities and
25% to mission-oriented work in federal laboratories, largely at DOD (44%) and NIH (20%).
Observations and Recent Legislative Initiatives. The federal government is the
major supporter of the nation’s basic research, which generates much of the knowledge that
industry uses for innovative R&D, and of university research that enriches the knowledge
base. As a result, some observers argue that federal support for research should be funded
6 Tables 5.4 and 9.7 in OMB, Historical Tables, Budget of the U.S. Government, FY2001. AAAS
data show that the previous constant-dollar high in R&D budget authority was in 1992 (not 1990 as
OMB reports, using outlay data).
7 Data on R&D funding by sector based primarily on NSF, National Patterns of R&D Resources:
2000 Data Update. See also, Ronald L. Meeks, “Federal Survey Shows Defense Funding of Industry
Is Largest Share of Federal R&D in FY2000,” NSF Data Brief, February 11, 2000, NSF 00-309.
8 Expenditures do not equal outlays or budget authority. NSF, National Patterns, 1998, pp. 2-3. See
also NSF, Federal Funds for Research and Development: Fiscal Years 1999, 2000, and 2001.
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at increasingly higher levels as a public good to enhance the U.S. ability to advance
scientifically, technologically, and economically; to broaden the knowledge base that industry
uses; and to train science and technology (S&T) personnel. Related issues are whether
incentives should be increased for states9 and industry to augment support of basic and
academic research, or whether too much support from these sources would overwhelm
academic research with pressure to conduct short-term applied studies.10 Among the
legislative options in this area11 is to make permanent the Research and Experimentation
(R&E) tax credit that provides tax benefits and credits for industrially funded basic research
in universities and is due to expire on June 30, 2004.12 It would have been made permanent
in the President’s and the Senate’s version of tax law revisions, but was not included in the
conference report or final version of the Tax Relief Reconciliation Act, P.L. 107-16. The
Administration seeks to have it made permanent. Pending bills to make it permanent include
H.R. 1137, H.R. 1329, H.R. 1340, H.R. 41, S. 41, and S. 515. Legislation was introduced
to allow qualified corporations to obtain economic benefit from research-related tax
incentives, similar to some state laws (H.R. 2153 and S. 1049).
Priorities Among Fields of Federally Funded Research
An important question is what should be the balance among fields of federally supported
research, and specifically, since health/life sciences research has consistently received priority
in the non-defense area, should more funding go to support other fields of science?13 Some
are concerned that the emphasis on health R&D may presage a scarcity of knowledge and
personnel in physical sciences, math, and engineering. Some observers maintain that funding
should be increased for all R&D fields, and others cite the need to assess reallocating federal
funding from health to nonhealth R&D. As shown in Figure 1, health sciences R&D has
grown as a priority for about 20 years. Over the period FY1993 to FY2001, R&D funding
at NIH increased almost 60% in constant dollars compared to NSF, 35%; the Department of
Commerce and EPA, about 20% each; and the Agriculture Department, about 15%. R&D
funding decreased in constant dollars for NASA, DOE, and DOD. NIH received about 70%
of the $5 billion increase in federal basic research funding between FY1993 and FY2001. For
FY2003, federally funded health-related R&D, primarily at NIH, is receiving over half of the
civilian R&D budget. In terms of funding by field, life sciences increased from $9.6 billion
in 1991 to $18.2 billion in 2001 estimated, or 90%, while at the same time, between those
years funding for physical sciences increased 5%; mathematics and computer sciences, 140%;
and engineering, 32%.
9 The NAS held “Planning Meeting on the Role of State Funding of Research,” July 13, 2001. See
RAND/OSTP, Discovery and Innovation: Federal R&D Activities in the Fifty States, June 2000.
10 NSTC, Implementation of the NSTC Presidential Review Directive-4: Renewing the Federal
Government-University Research Partnership...., Jan. 2001.
11 See CRS Report 95-50 SPR, The Federal Role in Technology Development, by Wendy Schacht.
12 CRS Report RL30479, The Research and Experimentation Tax Credit: Current Law and Selected
Policy Issues for the 106th Congress, by Gary Guenther.
13 See also CRS Report RL31031, The Changing Composition of the Federal Research and
Development Portfolio, by Michael E. Davey and Richard E. Rowberg.
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Figure 1. Trends in Nondefense R&D Funding by Budget Function,
FY1953-FY2003
NIH Funding Is Important to Congress. In 1998, the Senate passed S.Amdt. 2272
to S.Con.Res. 86, the approved Senate budget resolution. The amendment expressed the
sense of the Senate that the NIH budget should double within the next five years. Beginning
with FY1999, Congress started appropriating NIH funding at levels that would accomplish
this task by 2003, and the budget request reflects this goal.
Congressional Views About the Balance in Federal R&D Funding. There
are various perspectives in Congress on the issue of balance. In the House, the Science
Committee, in Views and Estimates, Fiscal Year 2002, said progress in biomedicine “depends
on advances in a wide variety of disciplines.” Members were concerned about the
“minuscule” increase for NSF, and sought more funding to modernize DOE user and research
facilities, more funding for NASA aeronautics, and increased investment in FAA R&D. The
minority staff of the Science Committee criticized what it called the “misplaced” trend toward
parity between defense and nondefense R&D; the imbalance between biomedical and physical
sciences R&D; and the Administration’s opposition to doubling the NSF budget and to
cooperative federal-industry R&D programs, such as ATP.14 Regarding the FY2003 R&D
budget request, Science Committee Chairman Boehlert reasoned that increases in “NIH alone
cannot undergird our economic health or even improve human health. Yet the NIH budget
14 President’s FY2002 Budget for R&D Analysis, by Minority Staff of the Science Committee, Apr.
10, 2001.
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is now larger than that of the rest of civilian since agencies put together, and just the increase
in the NIH budget is larger than the research budget of NSF.”15
Senate Appropriations Committee report 107-43 requested that OSTP “assess the
impact of reduced federal funding in nonhealth research fields and ... develop an action plan
to address these issues in the fiscal year 2003 budget request” (p. 88). Former Senate Budget
Committee Chairman Domenici was reported to have said during a Senate Budget Committee
hearing, “[W]e’re very proud that we’re increasing the National Institutes of Health ... but ...
you can’t increase one piece of science ... and leave the other kinds of research in the
doldrums.... In about five years, you’re going to have the medical scientists clamoring for
where are the physical scientists, ... the people that work on the newest physics of machinery
and engineers and nano-engines and the like?”16
Professional Groups’ Views About Balance. Professional groups have
recommended increasing both funding and balance in support among federally funded
research fields. For instance, the U.S. Commission on National Security 21st Century, co-
chaired by former Senators Gary Hart and Warren B. Rudman, in Road Map for National
Security: Imperative for Change, The Phase III Report of the U.S. Commission on National
Security 21st Century, 2001, offered advice to the Administration and Congress, concluding
that threats to the nation’s scientific and educational base are distinct new dangers to U.S.
national security. It recommended doubling the federal R&D budget by 2010 to about $160
billion and improving the competitiveness of the less capable R&D institutions. A National
Academy of Engineering report, Trends in Federal Support of Research and Graduate
Education, 2001, recommended that the Administration and Congress should evaluate federal
funding for research by field and assess its implications for knowledge generation and
industrial growth, and increase budgets for underfunded disciplines. New Foundations for
Growth: The U.S. Innovation System Today and Tomorrow, released by the National Science
and Technology Council on January 10, 2001, recommended funding across the portfolio
because “Money should not simply be thrown at the R&D system in the expectation that
useful outputs will ensue.... [I]t’s not possible to anticipate where exciting new developments
will arise. Increased funding across a carefully constructed ‘portfolio’ of investments will help
ensure the health of the national innovation system” (pp. 12-13). The Alliance for Science
and Technology Research in America (ASTRA), reportedly modeled after Research! America,
an advocacy group for medical research, focuses on physical sciences. Its goals are: “To
provide a strong, collaborative, political voice for math, physical sciences and engineering
before the federal government that results in substantial and sustained investment; to promote
strong, compelling, and mutually reinforcing messages across all groups lobbying for
improved vitality of the U.S. research enterprise for those fields; and to nurture support for
research for those fields among the voting public.”17
15 “Members Raise Concern Over Balance of Federal R&D Budget,” House Science Committee Press
Release, Feb. 13, 2002.
16 Richard M. Jones, “Reaction to the FY2002 Bush Administration S&T Request,” AIP Bulletin of
Science Policy News, FYI #26, Mar. 7, 2001.
17 John T. Softcheck, “New Advocacy Organization Will Promote Funding for Research in the Non-
biological Sciences,” Washington Fax, Feb. 26, 2001. See also David Malakoff, “Perfecting the Art
of the Science Deal,” Science, May 4, 2001, pp. 830-835.
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An applications-oriented approach to setting federal R&D priorities was recommended
in Science for Society, Cutting-Edge Basic Research in the Service of Public Objectives, May
2001, sponsored by the Packard and Sloan Foundations. It said that in addition to funding
basic and applied research, federal R&D support should include “basic science that is targeted
in an area of important societal objectives, or ‘Jeffersonian Science.’” This applications-
oriented science would “speed societal progress”and enhance public support for science
because it would more clearly link basic research and public objectives (pp. 69-70). Related
to this theme, the Center for Science Policy and Outcomes, under the leadership of Columbia
University, has started to identify areas of federally supported research that warrant priority
setting in order to achieve socially beneficial outcomes in health, earth systems, prediction in
public policy, preparation for extreme events, and nanotechnology.18
Proposals to Increase NSF Funding. The NSF funds research across all
disciplines and is the main federal source for much nonhealth-related academic research. The
FY2003 budget proposed to increase NSF R&D funding by 3.6% over FY2002, which many
say is inflated since it represents largely transfer of R&D programs from other agencies. Pleas
have been made to double the NSF budget by 2006, for instance by the Coalition for National
Science Funding (CNSF), in order to promote technological innovation. In a February 7,
2002 press release, the Coalition for National Science Funding (CNSF), which represents
many universities and professional science associations, recommended a 15% increase for
NSF The Federation of American Societies for Experimental Biology endorsed doubling of
the NSF budget as critical to biomedical research advances.19 Representative Eddie Bernice
Johnson and 16 cosponsors introduced H.R. 1472 to double funding for NSF. She
emphasized the need to increase federal support for basic research especially in the fields
where NSF is a major funding agency: the physical sciences, mathematics and engineering.
Conference action increased appropriations for NSF by 8.4%% over FY2001 and for NSF
R&D by 9%. Largely in response to congressional interest, the NSF said in September 2001
that it will create a new position of deputy for large facilities planning, budgeting and
management.
Federal R&D Priority-Setting Structures
Some observers recommend more centralized priority-setting for R&D in Congress and
in the executive branch. Some cite a need for an executive branch mechanism to determine
a unified R&D budget and to evaluate the total government R&D portfolio in terms of
progress toward meeting national objectives. Others say that congressional jurisdiction for
R&D is split among a number of committees and subcommittees, preventing examination of
the R&D budget as a whole. This means that R&D funding can serve particular local or
program interests, but may not be appropriate for a national R&D agenda. Opponents see
value in a decentralized system in which budgets are developed, authorized, and appropriated
separately by those most familiar with the needs of specific fields of R&D – the department
or agency head and the authorizing and appropriations subcommittees with jurisdiction.
18 See [http://www.cspo.org/whoweare/twentyyear.html]; David H. Guston, E. J. Woodhouse, and
Daniel Sarewitz, “A Science and Technology Policy Focus for the Bush Administration,” Issues in
Science and Technology, Spring 2001, pp. 1-4; and Michael M. Crow, “Harnessing Science to Benefit
Society,” Chronicle of Higher Education, Mar. 9, 2001, p. B20.
19 See Federal Funding for Biomedical and Related Life Sciences Research FY2002 and “NSF
Stimulated by Largest Dollar Increase in Agency’s History,” Washington Fax, Nov. 8, 2000.
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Unified Science and Technology (S&T) Budget
In a 1995 report, Allocating Federal Funds for Science and Technology, the NAS
recommended that the President present to Congress and that the Congress consider the R&D
budget as a unified whole before its separate parts for each agency are considered by
individual congressional committees. It also recommended that R&D requested in the budget
be reconfigured as a S&T budget, excluding defense development, testing and evaluation
activities, to denote the functions of creating new knowledge. The FY2002 and FY2003
budget used s modified version of the format proposed by the Academy, and identified a
“Federal Science and Technology (FS&T) budget table,” which, for FY2003, includes less
than half of total federal R&D spending and some non-R&D funding, such as education and
dissemination of information.20 The table shows that FS&T funding increased 9% from
FY2001 to FY2002. It is possible that the OMB will continue to use this alternative format,
paving the way for congressional consideration of a realigned and unified S&T budget.
S.Amdt. 2235 to the Senate budget resolution (S.Con.Res. 86) for FY1999 expressed the
sense of the Senate that for FY2000-2004, all federal civilian S&T spending should be
classified under budget function 250. This has not occurred.
Interagency R&D Initiatives
Executive Order 12881, issued by President Clinton, established the National Science
and Technology Council (NSTC) with cabinet-level status. Located in the Executive Office
of the President, it is the successor to the Federal Coordinating Council for Science,
Engineering, and Technology. It recommends agency R&D budgets to help accomplish
national objectives, advises OMB on agency R&D budgets, and coordinates presidential
interagency R&D initiatives. Beginning with the FY1996 budget request, NSTC started to
identify interagency R&D priorities in the budget. The FY2003 budget identified agency
funding for two interagency R&D initiatives whose reporting is required by statute. They are
“Networking and Information Technology R&D,” at level funding with FY2001, and “U.S.
Global Change Research Program,” increased 2% over FY2001. The Administration included
two other interagency initiatives it considers significant. These are the National
Nanotechnology Initiative, with funding increased 11% over FY2002, and a Climate Change
Research Initiative, which is new for FY2003. Not included were previous interagency R&D
initiatives which were presented in the FY2001 budget, including Energy Initiatives;
Integrated Science for Ecosystem Challenges; Education Research; Protecting Against 21st
Century Threat; Emerging Infectious Disease; Aviation Safety; Security, Efficiency, and
Environmental Technologies; and Plant Genome.21 Funding for these programs will compete
with funding for other fields of science.22
Proposals to Coordinate Federal R&D
The National Science Board (NSB), as a follow-up to its 1997 paper on Government
Funding of Scientific Research, issued a report, Federal Research Resources: A Process for
20 Sec. 8, FY2003 Budget, Analytical Perspectives.
21 Memo to the Heads of Departments, from Neal Lane and Jacob J. Lew, “Follow-on Guidance for
FY2001 Interagency Research and Development Activities,” [http://www.ostp.gov/html/0076.html].
22 “Science Lobbyists Aim for Better Balanced Budget,” Science, Mar. 9, 2001, pp. 1882-1884.
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Setting Priorities, October 11, 2001, (NSB 01-160) a draft of which had been discussed at
a May 2001 conference. It recommended a “continuing advisory mechanism” in the
Congress and in the executive branch and strengthening of the OMB/OSTP relationship to
set coordinated R&D priorities. The report said that federal R&D funding should be looked
at as a five-year planned portfolio, rather than as the sum of the requirements and programs
of departments. AAAS President Mary Good, recommended creating a cabinet-level post
for S&T to help achieve balance in R&D, coordinate federal R&D, review national
laboratories’ functions, address university research issues, and design programs to
“incentivize” students to pursue S&T careers.23 The aforementioned Commission on National
Security recommended empowering the President’s science advisor to establish “functional
budgeting,” that is, to identify nondefense R&D objectives that meet national needs, and
sought to strengthen the OSTP, NSTC and PCAST and improve coordination with OMB to
enhance stewardship of national R&D. The congressional science policy report, Unlocking
Our Future, 1998, spearheaded by Representative Vernon Ehlers, called for more balance in
the federal research portfolio and said that while OMB can fulfill the coordination function
in the executive branch, “no such mechanism exists in the Congress. In those cases where
two or more Congressional committees have joint jurisdiction over or significant interest in
large, complex technical program, the affected committees should ... better coordinate their
efforts [and] ... should consider holding joint hearings and perhaps even writing joint
authorization bills” (p. 7).
Legislation Introduced to Fund the OTA
The aforementioned NSB report also recommended that Congress should develop “an
appropriate mechanism to provide it with independent expert S&T review, evaluation, and
advice” (p. 16). Some believe that this could pertain to reestablishing the Office of
Technology Assessment (OTA), which was active between 1972 and 1995 as a $22 million
congressional support agency. It prepared in-depth reports and policy options about the
consequences of S&T and was eliminated as part of the reductions Congress made in a
FY1996 appropriations bill. In June 2001, a conference was held to assess ways to
“resurrect” OTA or variants of it. Advocates cited the need for better congressional support
for S&T analysis.24 The OTA is still authorized, but funds would have to be appropriated for
it. H.R. 2148, a bipartisan bill, would authorize OTA funding at $20 million annually for
FY2002-FY2007. Title XVI of S. 517 (as amended by substitution of S. 1766), a Senate
energy bill, would among other things create a Science and Technology Assessment Service
within the legislative branch to assess the uses of technology. It would have a congressional
Board and a Director and would interact with the National Research Council to select experts
to work on assessments. In other legislation, a conference report, H. Rept. 107-259 that
accompanied H.R. 2647, which was signed as P.L. 107-68, appropriates $500,000 to the
GAO for a technology assessment pilot project and report due June 15, 2002.
23 Rebecca Spieler, “AAAS President Concerned About Imbalances in Nation’s R&D Portfolio...,”
Washington Fax, Feb. 21, 2001.
24 Wil Lepkowski, “The Mummy Blinks,” Science and Policy Perspectives, June 25, 2001, at
[http://www.cspo.org/s&pp/062501.html]; D. Malakoff, “Memo to Congress: Get Better Advice,”
Science, June 22, 2001: 2229-2230; and M. Davis, “A Reinvented Office of Technology Assessment
May Not Suit Congressional Information Requirement...,” Washington Fax, June 18, 2001.
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Elevation of DOE and EPA Science Functions and Proposals to
Abolish S&T-Related Agencies
In a recent paper, a group of physicists associated with the American Physical Society
recommended elevating the status of DOE’s nondefense Office of Science, to enhance
research programs in DOE and, ultimately, the ability of the physical and natural sciences to
compete for the same kind of priority funding attention as health sciences research. The paper
proposed six alternative models to realign the management of DOE science, including
elevating the Director of the Office of Science to the rank of Undersecretary for Science and
Energy and Science Adviser to the Secretary; moving DOE science to an independent
agency, like NSF or NASA; or combining DOE science and energy programs with those of
NIST, NOAA, and possibly USGS to form part of a new Department of Commerce, or an
agency to be called a “National Institutes of Science and Advanced Technology,” with a
status within Commerce similar to that of NIH in the Department of HHS.25 H.R. 64, to
“Strengthen Science at the Environmental Protection Agency,” would create a new deputy
administrator for S&T at EPA, with a six-year term. to avoid political influence. Approved
by the Science Committee’s Environment, Technology and Standards Subcommittee on May
17, 2001, it was favorably reported by the full committee on October 3. A companion Senate
bill was introduced on July 12. In contrast, proposals have been introduced to abolish the
Department of Commerce (H.R. 375) and to abolish the Department of Energy (H.R. 376).
Earmarking
There is controversy about congressional designation of R&D funding for specific
projects, also called earmarking. When using this practice, Congress, in report language or
law, directs that appropriated funds go to a specific performer or designates awards for
certain types of performers or geographic locations. Typically an agency has not included
these awards in its budget request and often such awards may be made without prior
competitive peer review. Critics say that earmarking undermines the authorization process
and distorts agency R&D priorities. Supporters believe the practice helps to develop R&D
capability in a wide variety of institutions, that it compensates for reduced federal programs
for instrumentation and facilities renewal, and that it generates economic benefits in targeted
regions because R&D capacity generates industrial growth. Section 8 of the Analytical
Perspectives volume of the FY2003 Budget reported that R&D funded at congressional
direction for FY2002 totaled $1.824 billion, up almost 4% over FY2001. The Chronicle of
Higher Education, August 6, 2001, reported that for FY2001, Congress earmarked $1.7
billion for universities and colleges, most of it for R&D. According to AAAS, congressional
FY2002 R&D earmarks totaled $1.5 billion, with most for USDA, DOD, the Department of
Energy, and NASA, in that order. As it did last year, the Administration seeks to discourage
such earmarking on the grounds that it distorts agency priorities and is parochial. It sought
to rescind many FY2001 earmarks in the supplemental appropriations process. The resulting
law, P.L. 107-20 included some rescissions, but not as much as the President sought.26 A
25 “DOE Science for the Future, A Discussion Paper,” Dec. 14, 2000,
[http://www.aps.org/apsnews/doescience.pdf].
26 Daily Report for Executives, June 6, 2001, p. A-21, and July 13, 2001, p. A-1.
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conference on the pros and cons of earmarking was held on October 3, 2001, partially in
response to a request the OMB director for Congress to abandon science earmarking.27
Government Performance and Results Act (GPRA)
P.L. 103-62, requires agencies to define goals, set specific annual performance targets,
and report annually on performance. The law is intended to ensure accountability for federal
investments and that an agency’s programs and priorities meet its goals. It is difficult to define
priorities for most research and to measure the results quantitatively, since research outcomes
can not be defined well in advance and take a long time to demonstrate. Recent actions could
force agencies to identify more precisely goals for research and measures of research
outcomes. The Bush Administration has emphasized the importance of performance
measurement, including for R&D, as announced in The President’s Management Agenda,
FY2002 [http://www.whitehouse.gov/omb/budget/fy2002/mgmt.pdf] and in the FY2003
budget request. Most say that more work is needed before performance measures can be
used to recommend budget levels for research. OMB used performance measures for
management processes and gave passing marks “green or yellow lights”(to NSF) or “red
lights” or failing marks (e.g. DOD and NIH).28 As a pilot test, six performance criteria were
used to evaluate the Energy Department’s applied R&D programs. OMB said not enough
data were available for a valid assessment, but that measures showed where funding should
be increased – for research to control greenhouse gases – and decreased – for oil drilling
technology and high wind-speed power research (FY2003 Budget, Analytical Perspectives,
Sec. 8). OMB identified seven “fundamental [performance] principles” that will motivate the
development of FY2004 R&D budgets. It cosponsored a conference with the NAS to
develop performance criteria for basic research. The aforementioned Ehlers report
recommended that a “portfolio” approach be used when applying GPRA to basic research.
P.L. 106-531 requires an agency head to assess the completeness and reliability of
performance data used in reports to Congress and the House adopted a rule with the passage
of H.Res. 5 requiring all “committee reports [to] include a statement of general performance
goals and objectives, including outcome-related goals and objectives for which the measure
authorizes funding.”29
27 See Jeffrey Brainard, “Supporters an Criticism of Congressional Earmarks Meet to Seek
Consensus,” Chronicle of Higher Education, Oct. 4, 2001, and David Malakoff, “White House Asks
Community to Oppose Earmark Projects,” Science, Sept. 28, 2001, p. 2364.
28 On this point see “The President FY03 Budget for Research and Development; An Analysis by the
Minority Staff of the Science Committee,” Feb. 56, 2002.
29 See CRS Report RL30905, op. cit., and CRS Report RS20257, Government Performance and
Results Act: Brief History and Implementation Activities, by Genevieve J. Knezo.
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LEGISLATION
S. 517 (Bingaman)
Energy Security Policy bill. Introduced Mar. 12, 2001, Latest Senate floor action; Mar.
21, 2002. Among other things, Title XVI would create a congressional Science and
Technology Assessment Service.
S.Res. 19 (Specter)
A resolution to express the sense of the Senate that the federal investment in biomedical
research should be increased by $3,400,000,000 in FY2002. Introduced Feb. 13, 2001;
referred to Committee on Appropriations.
H.Res. 72 (Gekas)
To express the sense of the House of Representatives that the federal investment in
biomedical research should be increased by $3,400,000,000 in FY2002. Introduced Feb. 28,
2001; referred to Subcommittee on Health of the Committee on Energy and Commerce.
H.R. 1472 (Johnson, Eddie Bernice)
To authorize appropriations for fiscal years 2002, 2003, 2004, and 2005 for the National
Science Foundation, and for other purposes. Introduced Apr. 4, 2001; referred to
Subcommittee on Research, Science Committee. For further action see H.R. 1858.
H.R. 64 (Ehlers)
To provide for the establishment of the position of Deputy Administrator for S&T of the
EPA, and for other purposes. Introduced Jan. 3, 2001; referred to Subcommittee on
Environment, Technology and Standards, Science Committee; subcommittee; favorably
reported by full committee on Oct. 3, R. Rept. 107-311. House preparation for floor; placed
on the Union Calendar, Calendar No. 187, Nov. 30, 2001.
H.R. 2148 (Holt)
To reestablish the Office of Technology Assessment. Introduced June 20, 2001; referred
to subcommittees of the Science Committee.
S. 1172 (Durbin)
Legislative Branch Appropriations Act, 2002. Introduced July 2, 2001; passed Senate
with amendments on July 19, 2001. S.Amdt. 1026 allocated $1 million to GAO to conduct
a technology assessment pilot project and to report on it by June 15, 2002. The Senate
vitiated passage of S. 1172 and passed H.R. 2647 with the Senate-passed language. The
House-passed bill did not contain the referenced language. The conference report contained
language to fund the study at $500,000. The bill became P.L. 107-68, Nov. 12, 2001.
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Table 1. R&D in the Budget and Outyear Budget Projections, By Agency, Based Largely on AAAS Data
(Budget authority in millions of dollars)
FY2000 FY2001
FY2002 FY2003 req. % Change,
FY2004
FY2005
FY2006 FY2007 % Change FY02toFY07
act.
est.
est.
prelim.
FY02-03
proj.
proj.
proj
proj.
Constant Dollars
SELECTED AGENCIES & PROGRAMS
Dept. of Agr. Total
$1776
$2181
$2334
$2118
-9.3%
$2286
$2273
$2319
$2373
-7.1%
(Agr. Res. Service)
–
(1012)
(1234)
–
(CSREES)
–
(594)
(532)
–
(Forest Service)
–
(245)
(265)
–
Dept. of Commerce Total
1174
1030
1096
1100
-0.3
1122
1147
1172
1199
-0.1
(NOAA)
(643)
(561)
(611)
(605)
(-1.1)
(NIST)
(471)
(413)
(460)
(483)
(5.0)
(ATP)
(116)
(118)
(150)
(107)
(-28.5)
Dept. of Defense Total
39959
42740
49631
54827
10.5
58066
61789
60009
59065
8.7
(S&T (6.1-6.3+ medical))
(8632)
(9365)
(10341)
(9957)
(-3.7)
(All Other DOD R&D)
(31327) (33375)
(39298)
(44860)
14.2
Dept. of Education
238
264
268
311
16.0
Dept. of Energy Total
6956
7733
8361
8323
-0.5
8470
8627
9798
8974
-1.9
(Atomic/Defense)/(NNSA+
(3201)
(3462)
(3839)
(3947)
(2.8)
(4003)
(4062)
(4127)
(4192)
(-0.2)
Defense)
(Energy & Science)
(3755)
(4271)
(4522)
(4376)
(-3.2)
(4468)
(4565)
(4671)
(4782)
(-3.4)
Dept. of HHS Total
18182
21045
24141
27551
14.1
28136
28761
29431
30104
13.9
(NIH)
(17234) (19807)
(22795)
(26452)
(16.0)
(27009)
(27610)
(28254) (28916)
(15.9)
Dept. of Interior Total
618
621
660
628
-4.8
641
654
668
682
-5.5
Dept. of Transportation Total
607
718
778
736
-5.4
750
763
779
797
-6.4
(FAA)
(220)
(301)
(373)
–
(FHA)
(261)
(294)
(322)
–
(NHTSA)
(51)
(58)
(57)
–
Dept. of Veterans Affairs
645
719
761
810
6.5
826
844
863
883
6.1
Environmental Protection Agency
558
574
592
627
5.9
640
653
669
685
5.7
NASA Total
9494
9887
10232
10676
4.3
11144
11370
11815
12240
9.3
(Human Space Flight)
(3014)
(2901)
(2461)
–
(Science, Aeronautics, Technology)
(6481)
(7024)
(7840(
(8900)
–
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FY2000 FY2001
FY2002 FY2003 req. % Change,
FY2004
FY2005
FY2006 FY2007 % Change FY02toFY07
act.
est.
est.
prelim.
FY02-03
proj.
proj.
proj
proj.
Constant Dollars
National Science Foundation
2931
3320
3526
3651
3.5%
3728
3811
3900
3991
-7.1
All other R&D
630
702
7631
689
-9.7%
TOTAL
83769
91534
103150
112047
8.6%
116824
121726
121476
122065
8.1
NonDefense
40609
45332
49672
53273
7.2%
54755
55874
57340
58808
8.2
NonDefense Minus NIH
23374
25525
26877
26821
-0.2%
27746
28264
29086
29892
1.6
Defense
43160
46202
53478
58774
9.9%
62069
65851
64136
63257
8.1
Source: Based largely on American Association for the Advancement of Science, with tables appearing at [http://www.aaas.org/spp/dspp/rd/fy03.htm]. AAAS bases its tables on OMB data, agency budget
justifications, information from agency budget offices, and appropriations action. Data in italics in parentheses are parts of the total and have been included in agency totals. Final figures for FY2002 are AAAS
estimates of congressional appropriations including emergency appropriations for counter terrorism and national security. See also CRS Issue Brief 10083, “Research and Development Funding: Fiscal Year 2002,”
for detailed information about agency budget requests and congressional action for FY2002.
CRS-16

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