Order Code RS21270
Updated August 9, 2002
CRS Report for Congress
Received through the CRS Web
Counterterrorism Research and Development:
Funding, Priority-setting, and Coordination
Genevieve J. Knezo
Specialist, Science and Technology Policy
Resources, Science, and Industry Division
Summary
Even before the 2001 terrorist attacks, some experts questioned whether the
government was prepared to conduct and use research and development (R&D) to
counter terrorism. They cited inadequate planning and priority-setting and an inability
to target cross-cutting priorities and eliminate unnecessary duplication. Since
September 11, funding for counterterrorism R&D has doubled to about $3 billion
requested for FY2003 and planning and coordination mechanisms are being developed.
The President’s proposal, as passed by the House in H.R. 5005, would consolidate some
federal R&D programs in a Department of Homeland Security. S. 2794 is the Senate
version of the President’s original proposal. Alternate legislation would include more
R&D in a department is (H.R. 4660 and S. 2452). The basic R&D issues concern the
adequacy of planning/coordination mechanisms, including those in the Office of Science
and Technology Policy and Office of Homeland Security; which counterterrorism R&D
should be transferred to a new department; and how other R&D counterterrorism
activities that are not transferred should be coordinated.
Funding Trends in the FY2000-FY2003 Period
The $3 billion FY2003 budget request for counterterrorism R&D is about double the
amount appropriated for FY2002. According to the Office of Management and Budget’s
(OMB) Annual Report to Congress on Combating Terrorism, FY2002, $44.802 billion
was requested for combating terrorism for FY2003.1 Of this, about $2.905 billion – or
5.5% of the total – was requested for R&D to develop technologies to deter, prevent or
mitigate terrorist acts. This is an increase over FY2002, when appropriated funds,
combined with the Emergency Response Fund, totaled $36.468 billion, with R&D
funding at $1.162 billion, or 3.2% of the total. See Table 1.
1 OMB, Annual Report to Congress on Combating Terrorism, FY2002, June 24, 2002, available
at [http://www.whitehouse.gov/omb/legislative/combating_terrorism06-2002.pdf]. See also:
President George W. Bush, Securing the Homeland, Strengthening the Nation, 2002.
Congressional Research Service ˜ The Library of Congress

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Table 1. Research and Development to Combat Terrorism, By Agency, FY2000-
FY2003 (Request), Dollars in Millions2
Agency
FY2000
FY2001
FY2002
Emergency
FY2003 Request
Actual
Actual
Enacted
Response Fund
Agriculture
$37.3
$51.7
$83.9
$91.3
$48.4
Commerce
9.6
0
6.3
0
20.0
Energy
59.7
66.2
64.9
19.0
99.8
Environmental
unavailable
0
2.8
1.5
75.0
Protection Agency
Health and Human
109.7
102.8
119.1
180.0
1,770.9
Services
NIH, $1.75B; CDC,
$40M; FDA, $50M
Justice
45.2
11.4
66.1
0
36.1
National Science
unavailable
7.0
7.0
0
27.0
Foundation
National Security
190.0
298.9
385.5
11.0
767.2
Transportation
50.7
50.2
58.3
64.0
59.3
Treasury
2.1
1.2
1.1
0
1.1
Total
$511.3
$589.4
$795.2
$366.8
$2,905.23
The Department of Health and Human Services (DHHS), with 60% of the total, the
largest supporter of federal counterterrorism R&D, indicates the Administration’s
emphasis on bioterrorism. In previous years the largest recipient of such funding was the
national security community. DHHS requested about $1.8 billion in FY2003 for the
National Institutes of Health (NIH) for “vaccines and ... medicines for protection against
bioterrorism” (OMB, pp. 17-18). FY2003 funding for counterterrorism R&D by the
national security community, at 26% of the total, would go largely to the Defense
Advanced Research Projects Agency in the Department of Defense (DOD), for war
fighting applications and bioterrorism (OMB, p. 27). The request included $420 million
for the Biological Counterterrorism Research Program (in part for a Center for Biological
Counterterrorism at Fort Detrick), and the Biological Defense Homeland Security Support
Program, for detection of bioterror events in urban areas (OMB, p.27). The Technical
Support Working Group (TSWG), a State Department/DOD interagency forum that
identifies, prioritizes, and coordinates interagency and international R&D for combating
terrorism and conducts applied R&D to develop new technologies, would receive $49
million. TSWG also receives funding transferred from other agencies (OMB, pp. 27-28).
The Environmental Protection Agency’s counterterrorism R&D would be increased
for “research for better techniques for cleaning up buildings contaminated by biological
agents and for work on the effects of World Trade Center dust contaminants on human
health ....” The Department of Energy’s (DOE) counterterrorism R&D includes genomic
sequencing, DNA-based diagnostics, advanced modeling and simulation, and
2 OMB, Annual Report to Congress on Combating Terrorism, FY2001, p. 27 for column labeled
FY2000. The rest of the data is from the FY2002 OMB report, op. cit., p. 26.

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microfabrication technologies, and the National Infrastructure Simulation and Analysis
Center. DOE-supported R&D at federal laboratories focuses on improving security;
materials used in weapons of mass destruction, especially nuclear weapons; assessing
damage at the World Trade Center site; anthrax detection/treatment for buildings; and
detection of toxic agents in the air. DOE’s National Nuclear Security Administration
R&D focuses on nuclear, chemical, and biological detection and technologies.
The Department of Agriculture’s Agricultural Research Service conducts
counterterrorism-related research into plant, pest, and animal diseases. In the Commerce
Department, R&D at the National Institute of Standards and Technology (NIST) focuses
on protecting information systems. National Science Foundation (NSF) counterterrorism
R&D focuses on infectious diseases and microbial genome sequencing related to
bioterrorism; critical infrastructure protection, including $204 million for basic research
on encryption technologies, energy processing systems, computing reliability, remediation
robotics and modeling and simulation; Disaster Response Research Teams; and a
Cybercorps Scholarship program for graduate students studying information technology.
Current Situation
Organization of the government for counterterrorism R&D priority setting and
coordination is a prominent issue. Priority-setting and coordination of federally funded
R&D depends on informal consultations among program managers and the use of
interagency committees. Some of these committees are under the auspices of the
interagency National Science and Technology Council (NSTC), which the Office of
Science and Technology Policy (OSTP) manages. NSTC’s Antiterrorism Task Force has
working groups on rapid response, biological and chemical preparedness, nuclear and
conventional explosives, “vital” infrastructure, and behavioral and educational issues.
OSTP is a statutory office within the Executive Office of the President; its director
advises the President and the organization is mandated to recommend federal R&D
budgets. OSTP’s director chairs the National Security Council’s (NSC) Preparedness
Against Weapons of Mass Destruction R&D Subgroup, which identifies gaps and
duplication in R&D concerning chemical, biological, nuclear, and radiological threats.
OSTP has worked on interagency tasks concerning anthrax detection/cleanup and the
development of policy guidelines for agency regulations to restrict access to research
using biological “select agents.” Homeland Security Presidential Directive-2, October 29,
2001, required OSTP to help develop policy for foreign student visas, access to
“sensitive” courses, and advanced technology for border control. On May 7, 2002, the
White House proposed creating an Interagency Panel on Advanced Science Security to
develop guidelines to screen foreign students and scientists who apply for visas to study
sensitive subjects at U.S. universities. Pursuant to Executive Order 13231, OSTP works
with the interagency President’s Critical Infrastructure Board to recommend priorities and
budgets for information security R&D. OSTP has obtained advice on counterterrorism
R&D from its own federally funded R&D center and from the National Academy of
Sciences, which just published Making the Nation Safer: The Role of Science and
Technology in Countering Terrorism, June 2002. The report said that fragmentation in
R&D can result in missed opportunities and an inability to develop effective cross-agency
programs; that there are no clear agency homes for areas requiring R&D, such as detection
of agricultural pathogens and cybersecurity; that an Under Secretary for Technology be
included in a homeland security department; and that a Homeland Security Institute for
independent analysis and evaluation be created in the department.

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The Office of Homeland Security (OHS) in the Executive Office of the President,
created on October 8, 2001, by Executive Order 13228, did not list R&D among its major
responsibilities. The Homeland Security Council (HSC), also created then, acts to ensure
coordination of governmental homeland security activities. Its core membership includes
the heads of some agencies responsible for counterterrorism R&D, such as the Secretaries
of Defense, Health and Human Services, and Transportation, but not the OSTP director
or the Secretaries of Commerce and of Energy. R&D is a topic of one of the interagency
HSC Policy Coordination Committees; the committee head is OSTP’s assistant director
for national security. OSTP’s director has testified that he interacts closely with OHS.
In addition to OSTP and OHS, other mechanisms coordinate some counterterrorism
R&D. TSWG selects and funds applied R&D for counterterrorism technologies useful
to more than one agency. Interagency coordination may develop under the new working
group on bioterrorism prevention, preparedness, and response established by Section 108
of P.L. 107-188, the Public Health Security and Bioterrorism Preparedness and Response
Act of 2002. The group includes the DHHS and DOD secretaries and other agency heads
and is charged to recommend research on pathogens that terrorists could use.
Notwithstanding its responsibilities to help agencies set complementary and
coordinated priorities, OSTP does not have budgetary authority over federal agencies and
departments. OHS lacks budgetary authority, and there is uncertainty about its ability to
convince agencies to take recommended actions.
Policy Analysis
Counterterrorism R&D program and policy decisions respond to the requisites of
both security and the conduct of science. Given the character of today’s terrorist threats,
homeland security R&D involves virtually every scientific and technical discipline, and
major areas of application, such as weaponry, communications, health, and transportation.
The conduct of effective counterterrorism R&D compels attention to the balance between
long-range and short-term applied research and to the need to develop, test, procure, and
deploy technological responses. Some observers say that fragmentation of
counterterrorism R&D programs and policies imperils the nation’s security and requires
that core R&D be consolidated in a homeland security department. For example, the
Administration’s National Strategy for Homeland Security, released in July 2002,
concluded, “To date, research and development activities in support of homeland security
have been underfunded, evolutionary, short-term in nature, fragmented across too many
departments, and heavily reliant on spin-offs from the national security and medical
sectors. Many of the involved agencies have little frontline knowledge of homeland
security and little or no experience in technology acquisition and supporting research” (p.
52). Others, such as the Brookings Institution in a July 15, 2002 report, Assessing the
Department of Homeland Security, urge caution about moving R&D to a new department.
Some observers maintain that dividing R&D programs into security and civilian lines of
effort risks reducing communications among researchers and jeopardizing the civilian
components of such programs. They contend that advances in security-related R&D may
depend upon developments in unrelated R&D and that classification of some R&D could
inhibit progress. Other issues include how to coordinate counterterrorism R&D left
outside a new department with R&D that would be conducted in such an agency, how to
encourage industrial R&D, and how to balance the open conduct of science with a need
to limit information exchange for some R&D topics.

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Options and Implications for U.S. Policy
The existing counterterrorism R&D structure is being superceded. OHS’s National
Strategy for Homeland Security report listed 11 major initiatives for science and
technology. The President sent Congress a proposal to create a Department of Homeland
Security (DHS), with specific responsibilities for specific R&D areas and for other
“emerging threats.”. The bill, H.R. 5005, amended and reported from the House Select
Committee on Homeland Security on July 24, 2002, (H.Rept. 107-609),was passed on
July 26. Alternative proposals would establish a department with broader
counterterrorism R&D functions and some ability to coordinate R&D conducted by other
departments and agencies. Creation of a new department could involve realigned or new
budget expenditures and transfer of some program responsibilities among agencies. That
option might give a single agency budget authority to orchestrate and budget homeland
security R&D – authority which neither the OSTP director nor the OHS director have.
However, a DHS would compete with other agencies for funding, including those whose
counterterrorism R&D functions are not transferred to a new department. A new DHS’s
relationships to OSTP and OHS and other interagency bodies would need to be clarified.
Role of Congress/Legislation
H.R. 5005, as passed by the House, would create a Department of Homeland
Security (DHS). It appears that the existing OHS would continue; it is not clear if the
existing OHS Homeland Security Council Policy Coordination Committee on R&D
would continue. The proposed DHS would have four operational units. Most of DHS’s
research, development, test, and evaluation (RDT&E) functions would be under the
jurisdiction of the Under Secretary for Science and Technology (created by Title III), who
would have responsibility to fund R&D and develop countermeasures against chemical,
biological, radiological, and nuclear weapons and other “emerging terrorist” threats (but
not human health-related R&D); to establish a government-wide counterterrorism R&D
strategy; and to coordinate with other agencies to eliminate duplication and fill unmet
needs. Agencies which would have selected R&D programs transferred to DHS are DOE,
DOD, the Agriculture Department, as well as R&D performed by the Coast Guard and the
Transportation Security Administration, two agencies transferred intact to DHS. The
DHHS Secretary, in collaboration with the DHS Secretary would set priorities for certain
DHHS bioterrorism-related R&D functions. The DHS Under Secretary for Science and
Technology could establish a Federally-funded Research and Development Center
(FFRDC) for independent analysis and a university-based center for homeland security.
The bill would create a Homeland Security Science and Technology Coordination Council
to establish R&D priorities within DHS; a Homeland Security Institute to, among other
things, evaluate the effectiveness of security measures; a Homeland Security Science and
Technology Advisory Committee; a Technology Clearinghouse to encourage innovative
solutions and screen proposals in coordination with TSWG; and a science and technology
national “Net Guard,” to help information systems recover after attack (Sec. 213). The
Under Secretary for Science and Technology could use the expertise of any federal
laboratory and could select a “headquarters” laboratory. The DHS Secretary would have
special authority to waive specific procurement laws in R&D pilot projects (Sec. 731); the
ability to implement a set of liability protections for manufacturers of innovative anti-
terrorism technologies (Sec. 751); and authority over DHHS strategic stockpile functions
as defined in P.L. 107-188 (Sec. 905). The bill would establish a statutory relationship

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between the OSTP and the OHS (Sec. 910). OHS Director Ridge testified on July 15 that
the administration would support “re-framing”to add an Undersecretary for Science and
Technology (the provision was not in Administration’s original bill). The Congressional
Budget Office estimated that DHS’s newly authorized R&D activities would cost about
$300 million annually [http://www.cbo.gov/showdoc.cfm?index=3641&sequence=0].
Already authorized R&D to be transferred to DHS could total almost $300 million. S.
2794 is the Senate version of the President’s original proposal.
A Department of National Homeland Security (DNHS), including a Directorate of
Science and Technology was proposed in S. 2452 (Lieberman), which had been reported
favorably in May. A substitute bill was filed and agreed to on July 25, 2002, by the
Committee on Governmental Affairs. The Under Secretary for Science and Technology
created by the bill (section 135) would have somewhat broader responsibilities than in
H.R. 5005 to establish a science and technology strategy and to coordinate with other
agencies, including OSTP; to develop “technology roadmaps” to achieve goals; and to
establish a National Emergency Technology Guard. Selected agency functions would be
transferred to the new DNHS, which would also set priorities for, and manage in
collaboration with DHHS, certain DHHS bioterrorism countermeasures R&D under joint
agreements between DNHS and DHHS. The bill would create a Science and Technology
Council, composed of federal agency officials, to set R&D priorities and coordinate
government programs. The Under Secretary would have authority to carry out RDT&E
and some prototype projects; DOE’s national laboratories could be used to support
departmental missions. An “Acceleration Fund for Research and Development of
Homeland Security Technologies,” would be authorized at $200 million for FY2003, with
interagency groups to establish its priorities. The bill would establish a Homeland
Security Science and Technology Council, under the NSTC. To encourage technology
development and deployment, the bill would create a Security Advanced Research
Projects Agency (SARPA), an Office on Risk Analysis and Assessment, an Office of
Technology Evaluation and Transition, and offices to deal with federal laboratory
functions transferred to the new DNHS. The Under Secretary of the Directorate of
Emergency Preparedness and Response would be given responsibility for “select agent”
registration activities (which would affect the conduct of R&D in academic and other
nongovernmental laboratories) and for DHHS strategic stockpile functions, both
mandated by P.L. 107-188 (Sec. 134). Pursuant to Sec. 133, the R&D intensive Computer
Security Division of NIST would be transferred to the Directorate of Critical
Infrastructure Protection. The House counterpart to the original bill was H.R. 4660.
Resources
CRS Report RL31202, Federal Research and Development for Counterterrorism:
Organization, Funding, and Options.
CRS Report RL30153, Critical Infrastructures: Background, Policy, and Implementation.
“Department of Energy Programs in the President’s Proposal for a Department of
Homeland Security (H.R. 5005)", CRS general distribution memo by Dan Morgan,
July 5, 2002.

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