Order Code IB10088
Issue Brief for Congress
Received through the CRS Web
Federal Research and Development:
Budgeting and Priority-Setting Issues,
107th Congress
Updated January 13, 2003
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
Counterterrorism 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
Earmarking
Government Performance and Results Act (GPRA)
107th Congress Legislation

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Federal Research and Development: Budgeting and Priority-Setting
Issues, 107th Congress
SUMMARY
Federal R&D funding priorities change
growth. Debates focus on whether federal
over time, reflecting Presidential and national
R&D should be increased across the board;
preferences. Defense R&D predominated in
how priorities should be set; and how to
the 1980s, decreasing to about 50% of federal
determine “balance” in funding between
R&D in the 1990s during the Clinton Admin-
health and nonhealth fields.
istration. In nondefense R&D, space R&D
was dominant in the 1960s as the nation
Legislative priority-setting initiatives
sought to compete with the Soviet Union;
include bills to double the NSF budget within
energy R&D became an additional priority
5 years (H.R. 4664 passed in the House); and
during the energy-short 1970s, and, since the
to make permanent the research and experi-
1980s, health R&D has predominated. De-
mentation tax credit, including credit for
fense R&D has started to dominate again as
industrial support of academic basic research
priorities have shifted to deal with the war
(H.R. 1137, H.R. 1329, S. 41, and S. 515).
against terrorism. The FY2003 budget request
seeks to increase R&D funding by about 8%
The Bush Administration included in its
overall, including increases for the Depart-
budget request a “Federal S&T” budget,
ment of Defense (DOD) and National Insti-
which may presage a future unified science
tutes of Health (NIH). R&D funding would
and technology (S&T) budget. The FY2003
increase also for the Departments of Educa-
budget requested funding for four interagency
tion and Veterans Affairs, and EPA, NASA
R&D initiatives. Other proposals made to
and NSF, although some of these latter in-
coordinate R&D include a continuing priority-
creases are due to program shifts and new
setting mechanism; a cabinet-level S&T body;
methods of counting programs that were not
functional R&D budgeting; and reestablish-
formerly counted as R&D. R&D funding
ment of the Office of Technology Assessment
would decrease in the Departments of Agri-
in Congress (H.R. 2148) or a Science and
culture, Commerce, Interior, Transportation,
Technology Assessment Service (H.R. 4, as
and other areas. If the 16% increase in NIH
passed the Senate on April 25, 2002). The
R&D funding were not counted, civilian R&D
Administration opposes earmarking for R&D,
funding would fall by 0.2%. Counter terror-
which it said totaled about $1.8 billion in
ism R&D funding is requested to double to
FY2002 and because the practice distorts
about $3 billion. Congressional appropria-
agency priorities. The Administration has
tions action, which is not complete, indicates
started to use some performance measures for
that FY2003 R&D funding may exceed the
R&D budgeting, inspired by the Government
requested levels.
Performance and Results Act. However, the
Administration and critics say better data and
National R&D funding continues to
concepts are needed to use performance bud-
grow, but the federal R&D share, while sur-
geting for basic and applied research. OMB
passing the previous peak of 1992 in constant
judged agencies that fund R&D using
dollars, has declined to 27% of the national
performance management measures, with NSF
total. Scholars and policymakers cite the
winning accolades for its financial manage-
importance of R&D funding to economic
ment procedures.
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
The Government is being funded by a continuing resolution because appropriations
action for FY2003 was not concluded, due largely to differences between the House and
Senate on discretionary spending levels. Two appropriations bills, that deal with defense,
were signed, increasing defense R&D by 18%. Senate committee action was completed for
all 13 appropriations bills and would increase R&D funding by almost 14% over FY2002,
and over 5% more than the President’s request. Most of the increase would go to defense
R&D and to NIH. House appropriations committee action is not complete. FY2003
appropriations are expected to be finished in late January.
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 counterterrorism 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 other agencies.
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 to add new priorities and funding to combat terrorism affected R&D
appropriations levels. OMB’s FY2001 Annual Report to Congress on Combating Terrorism,
indicated that for FY2002, the Administration requested about $555 million for
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counterterrorism 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 counterterrorism
R&D, with about one-half from regular appropriations, and one-half from emergency
appropriations1 in P.L. 107-38. (For additional details, see CRS report RL31202.)
FY2003 Budget Request
The President’s R&D request totaled 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 congressional policy to double NIH’s
funding by 2003 and in part to increased counterterrorism funding. See Table 3.
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
the loss of emergency anti-terrorism funds, combined with increases for competitive research
grants in the National Research Initiative. AAAS projections show that nondefense R&D
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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would increase by 8.2% from FY2002 to FY2007 after adjusting for inflation. If NIH
nondefense R&D were excluded, nondefense R&D would rise 1.6% in inflation-adjusted
terms. Defense R&D would rise 8.1% by 2007. The Administration 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 1995 proposal made by the National Academy of Sciences.
Some cuts have been attributed to the Administration’s attempt to eliminate
congressional R&D earmarks and others to decreased R&D funding levels that had been
increased in 2002 because of counterterrorism funding. Increases are planned for
counterterrorism, laboratory security, and basic research (to be increased by about 9% to $25
billion, the highest level ever reached). 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 have focused on discretionary spending priorities for
R&D versus other areas, including tax cuts, domestic programs, and homeland defense.
Counterterrorism Funding
Counterterrorism R&D funding was requested to be increased about $1.5 billion in
FY2002 to about $3 billion for FY2003. See Table 1. Notable increases were for the
National Institute of Allergy and Infectious Diseases, at $1.7 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. The President requested a reported $176 million for R&D
related to anti-terrorism in the FY2002 emergency supplemental appropriation. After the
legislation was signed, the President announced that he would not release all funds
appropriated, limiting counterterrorism R&D supplemental funding to about $128 million.
See also CRS Report RL31576.
Public Law 107-296, the Homeland Security Act of 2002 (H.R. 5005) consolidates
some federal counterterrorism R&D programs in a new Department of Homeland Security
(DHS). DHS’s R&D funding responsibilities are estimated to total over $800 million
annually. Funds have not yet been appropriated for DHS for FY2003. See Table 2; for
additional details, see CRS report RS21270. On Dec. 10, 2003, the President nominated Dr.
Dr. Charles McQueary, an engineer, as Undersecretary for Science and Technology in the
new DHS. Recently he retired as President of General Dynamics Advanced Technology
Systems. He has been with AT&T Lucent Technologies , as President and Vice President,
and with AT&T Bell Laboratories, as Director and Department Head.
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Table 1. Research and Development to Combat Terrorism, By Agency,
FY2000-FY2003 (Request)
(Dollars in Millions)
Emergency
FY2000
FY2001
FY2002
Agency
Response
FY2003 Request
Actual
Actual
Enacted
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
EPA
not available
0
2.8
1.5
75.0
DHHS
109.7
102.8
119.1
180.0
1,770.9
(NIH, $1.75B; CDC,
$40M; and FDA, $50M)
Justice
45.2
11.4
66.1
0
36.1
NSF
not available
7.0
7.0
0
27.0
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
Source: OMB, Annual Report to Congress on Combating Terrorism, FY2002, p. 27 for column “FY2000.”
The rest of the data is from: OMB, Annual Report to Congress on Combating Terrorism, June 24, 2002, p. 26.
The 2002 report is [http://www.whitehouse.gov/omb/legislative/combating_terrorism06-2002.pdf].
Table 2. Estimate of DHS’s R&D Funding
R&D Program or Unit
FY2003 Funding Estimate
TSA Aviation Security, transferred from DOT $130 million
Coast Guard R&D, transferred from DOT
$24 million, plus 10% of the Acceleration Fund for R&D
NISAC, transferred from DOE
$20 million
Other R&D transferred from DOE
$100 million
Plum Island, transferred from USDA
$25 million
Nat’l. Bio-Weapons Def. Analysis Cntr..
Unknown, requested by the President at $420 million;
probably will be less
HSARPA and Acceleration Fund for R&D
Minimum of $500 million for the fund
Homeland Security Institute

Unknown
University Center for Homeland Security
Unknown
Contracts with other FFRDCs

Unknown
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
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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. The House Budget Resolution, H. Con. Res. 353, passed on
March 21, 2002, and the Senate Budget Resolution, S.Con.Res. 100, reported on March 22,
2002, proposed FY2003 discretionary budget authority function totals for Defense and
General Science, Space and Technology that were higher than proposed by the President.
The resolutions also adopts the President’s recommendation to complete the doubling of the
NIH budget in FY2003. The House Science Committee’s Views and Estimates of the request
is posted at [http://www.house.gov/science/press/107/107-192views03.pdf].
The Government is being funded by a continuing resolution because appropriations
action has not been concluded, due largely to differences between the House and Senate on
discretionary spending levels. FY2003 appropriations action is expected to be finished in
late January. The FY2004 budget will be presented on Feb. 3, 2003. Two appropriations
bills, that deal with defense, were signed, increasing defense R&D by 18%. Senate
committee action was completed for all 13 appropriations bills and would increase R&D
funding by almost 14% over FY2002, and over 5% more than the President’s request. Most
of the increase would go to defense R&D and to NIH, with smaller increases for R&D in all
other agencies except the departments of Transportation and Agriculture. House
appropriations committee action is not complete. House-approved defense appropriations
would increase DOD R&D funding by 8.1% over the President’s requested level.
Appropriations action in both houses be needed double NSF’s funding over the five years.
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.3 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
3 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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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
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.4 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 have raised 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.5 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%.6 Universities and colleges are the second-
largest performer of national R&D, funded mostly by the federal government (58% of
4 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).
5 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.
6 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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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
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 states7 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.8 Among the
legislative options in this area9 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, 2004.10 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.
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?11 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, would receive over half of the civilian R&D budget. In terms of funding by field,
7 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.
8 NSTC, Implementation of the NSTC Presidential Review Directive-4: Renewing the Federal
Government-University Research Partnership...., Jan. 2001.
9 See CRS Report 95-50 SPR, The Federal Role in Technology Development, by Wendy Schacht.
10 CRS Report RL30479, The Research and Experimentation Tax Credit: Current Law and Selected
Policy Issues for the 106th Congress, by Gary Guenther.
11 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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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%.
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.12 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 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.”13
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?”14
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, in Road Map for National Security: Imperative for Change, The
Phase III Report of the U.S. Commission on National Security 21st Century, 2001 concluded
that threats to the nation’s scientific and educational base are distinct new dangers to U.S.
12 President’s FY2002 Budget for R&D Analysis, by Minority Staff of the Science Committee, Apr.
10, 2001.
13 “Members Raise Concern Over Balance of Federal R&D Budget,” House Science Committee
Press Release, Feb. 13, 2002.
14 Richard M. Jones, “Reaction to the FY2002 Bush Administration S&T Request,” AIP Bulletin of
Science Policy News, FYI #26, Mar. 7, 2001.
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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 “[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.”15
Figure 1. Trends in Nondefense R&D Funding by Budget Function,
FY1953-FY2003
15 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 recommended that 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 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.16
Proposals to Increase NSF Funding. The National Science Foundation 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 some say was inflated since it represents largely transfer of R&D
programs from other agencies. Pleas have been made to double the NSF budget , for instance
by the Coalition for National Science Funding (CNSF), which represents many universities
and professional science associations, in a February 7, 2002 press release, when it
recommended a 15% increase for NSF and doubling of its budget by FY2006. The
Federation of American Societies for Experimental Biology endorsed doubling of the NSF
budget as critical to biomedical research advances.17 P.L. 107-368 (H.R. 4664), the NSF
authorization bill for FY2003, increases NSF’s budget by 15% for each of FY2003, FY2004,
and FY2005, which according to the bill’s sponsors, would “put the NSF on the track to
double its budget within five years,” similar to the NIH doubling track, and thus would
increase federal support for non-medical R&D in areas which have not seen increases in
recent years like the larger percentage increases which have gone to biomedical R&D. The
bill would also increase oversight of NSF facilities programs. FY2003 appropriations action
in both houses has set NSF on a course to double its budget over the next five years.
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
16 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.
17 See Federal Funding for Biomedical and Related Life Sciences Research FY2002.
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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.
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 a 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.18 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 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,”Networking and
Information Technology R&D,” at level funding with FY2001, and “U.S. Global Change
Research Program,” increased 2% over FY2001. Two other interagency administration
initiatives are the National Nanotechnology Initiative, with funding increased 11% over
FY2002, and a new Climate Change Research Initiative. FY2004 interagency R&D
initiatives are: homeland security and antiterrorism R&D, networking and information
technology R&D, national nanotechnology initiative, molecular-level understanding of life
processes; climate change S&T, and education research.19
18 Sec. 8, FY2003 Budget, Analytical Perspectives.
19 FY2004 Interagency R&D Priorities, Memorandum, from Director, OSTP and Director, OMB,
May 30, 2002.
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Proposals to Coordinate Federal R&D
The National Science Board (NSB) report, Federal Research Resources: A Process for
Setting Priorities, October 11, 2001, (NSB 01-160) recommended a “continuing advisory
mechanism” in the Congress and in the executive branch and a strengthened OMB/OSTP
relationship to coordinate R&D priorities. It 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 and coordinate federal R&D and handle research
policy issues.20 The Commission on National Security recommended empowering the
President’s science advisor to establish “functional budgeting,” to identify nondefense R&D
objectives that meet national needs, 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. ...[I]n large, complex technical program, ... committees 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 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.21 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 H.R. 4, an energy bill as passed by the Senate on April 25,
2002, would create a Science and Technology Assessment Service within the legislative
branch. It would have a congressional Board and a Director and would interact with the
National Research Council to select experts to work on assessments. This language was not
in the version of the bill passed in House (on August 2, 2001). The proposals were in
conference, which was not finished. In other legislation, a conference report, H.Rept. 107-
259 that accompanied H.R. 2647, which was signed as P.L. 107-68, appropriated $500,000
to GAO for a technology assessment pilot project and report due June 15, 2002.
20 Rebecca Spieler, “AAAS President Concerned About Imbalances in Nation’s R&D Portfolio...,”
Washington Fax, Feb. 21, 2001.
21 Wil Lepkowski, “The Mummy Blinks,” Science and Policy Perspectives, June 25, 2001; 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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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 since R&D capacity may generate industrial growth. Section 8 of Analytical
Perspectives, 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, September 27, 2002, reported that for FY2002, Congress earmarked $1.8 billion
for universities and colleges, most of it for R&D. According to AAAS, FY2002 R&D
earmarks totaled $1.5 billion, with most for USDA, DOD, the Department of Energy, and
NASA, in that order.22 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.23 A conference on the
pros and cons of earmarking was held on October 3, 200124
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. The Bush
Administration emphasizes the importance of performance measurement, including for R&D,
as announced in The President’s Management Agenda, FY2002 and in the FY2003 budget
request. Most say that more work is needed before performance measures can be used to
recommend budgets 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).25 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
22 AAAS, “Senate Earmarks Approach $1 Billion in FY2003 Budget,” Aug. 26, 2002.
23 Daily Report for Executives, June 6, 2001, p. A-21, and July 13, 2001, p. A-1.
24 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.
25 On this point see “The President’s FY03 Budget for Research and Development; An Analysis by
the Minority Staff of the Science Committee,” Feb. 6, 2002.
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research to control greenhouse gases – and decreased – for oil drilling technology and high
wind-speed power research (FY2003 Budget, Analytical Perspectives, Sec. 8). OMB has
instructed agencies on performance-related investment criteria to use for preparing FY2004
R&D budget requests.26 It is developing performance criteria for basic research. The Ehlers
report recommended that a “portfolio” approach be used when applying GPRA to basic
research. P.L. 106-531 required 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.”27
107th Congress Legislation
H.R. 4. (Tauzin)
The Senate version incorporates the Energy Security Policy bill, S. 517, which was
introduced Mar. 12, 2001, by Senator Bingaman and passed the Senate on Apr. 25, 2002.
Among other things, Title XVI would create a congressional Science and Technology
Assessment Service. The House bill, passed on Aug. 2, 2001, did not contain this provision.
Conference action was not completed.
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.
H.R. 2148 (Holt)
To re-establish the Office of Technology Assessment. Introduced June 20, 2001;
referred to subcommittees of the Science Committee.
H.R. 4664 (Smith, Nick)
To authorize appropriations for fiscal years 2003, 2004, and 2005 for the National
Science Foundation, and for other purposes. Became P.L. 107-368, Dec. 19, 2002.
26 FY2004 Interagency R&D Priorities, May 30, 2002, op. cit.
27 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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Table 3. R&D in the Budget and Outyear Budget Projections, By Agency, Based Largely on AAAS Data
(Budget authority in millions of dollars)
House
Senate
% Change
FY2003
%
Apps.
Conf.
FY2004
FY2005
FY2006
FY2007
SELECTED AGENCIES &
FY2000
FY2001
FY2002
Apps.
FY02toFY07
req.
Change,
Comm. or proj.(by proj.(by proj. (by
PROGRAMS
act.
est.
est.
Floor*
Floor*
proj.(by
prelim.
FY02-03
Final
AAAS)
AAAS)
AAAS)
Constant
AAAS)
Comm#
Comm.#
Dollars
Dept. of Agr. Total
$1776
$2181
$2334
$2118
-9.3%
$2145#
$2262#
$2286
$2273
$2319
$2373
-7.1%
(Agr. Res. Service)
–
(1012)
(1234)
–
(1132)#
(1197)#
(CSREES)
–
(594)
(532)
–
(485)#
(529)#
(Forest Service)
–
(245)
(265)
–
(302)#
(298)#
Dept. of Commerce Total
1174
1030
1096
1100
-0.3
1216#
1122
1147
1172
1199
-0.1
(NOAA)
(643)
(561)
(611)
(605)
(-1.1)
(682)#
(NIST)
(471)
(413)
(460)
(483)
(5.0)
(498)#
(ATP) (Within NIST)
(116)
(118)
(150)
(107)
(-28.5)
(159)#
Dept. of Defense Total
39959
42740
49492
54460
10.0
58764*
57663*
58764
58066
61789
60009
59065
8.7
(S&T (6.1-6.3+ medical))
(8632)
(9365)
(10298)
(9707)
(-5.7)
11692* (11117)*
(11692)
(All Other DOD R&D)
(31327)
(33375)
(39194)
(44753)
14.2
47072* (46546)*
(47072)
Dept. of Education
238
264
268
311
16.0
279#
Dept. of Energy Total
6956
7733
8361
8323
-0.5
8532#
8740#
8470
8627
9798
8974
-1.9
(Atomic/Defense)/(NNSA+
(3201)
(3462)
(3839)
(3947)
(2.8)
(3910)#
(4058)#
(4003)
(4062)
(4127)
(4192)
(-0.2)
Defense)
(Energy & Science)
(3755)
(4271)
(4522)
(4376)
(-3.2)
(4622)#
(4682)#
(4468)
(4565)
(4671)
(4782)
(-3.4)
Dept. of HHS Total
18182
21045
24141
27551
14.1
27578#
28136
28761
29431
30104
13.9
(NIH)
(17234)
(19807)
(22795)
(26452)
(16.0)
(26385)#
(27009)
(27610)
(28254)
(28916)
(15.9)
Dept. of Interior Total
618
621
660
628
-4.8
681#
684#
641
654
668
682
-5.5
(U.S. Geological Survey)
566
583
542
-7.0
(598)#
(595)#
Dept. of Transportation Total
607
718
778
736
-5.4
815#
697#
750
763
779
797
-6.4
(FAA)
(220)
(301)
(359)
(222)
–
(248)#
(223)#
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House
Senate
% Change
FY2003
%
Apps.
Conf.
FY2004
FY2005
FY2006
FY2007
SELECTED AGENCIES &
FY2000
FY2001
FY2002
Apps.
FY02toFY07
req.
Change,
Comm. or proj.(by proj.(by proj. (by
PROGRAMS
act.
est.
est.
Floor*
Floor*
proj.(by
prelim.
FY02-03
Final
AAAS)
AAAS)
AAAS)
Constant
AAAS)
Comm#
Comm.#
Dollars
(FHA)
(261)
(294)
(275)
(266)
–
(291)#
(293)#
(NHTSA)
(51)
(58)
(59)
(59)
–
(60)#
(59)#
(TSA)
new
agency
(14)
(130)
(130)#
(25)#
Dept. of Veterans Affairs
645
719
761 810
6.5
786#
826
844
863
883
6.1
Environmental Protection Agency
558
574
592
627
5.9
628#
624#
640
653
669
685
5.7
NASA Total
9494
9887
10232
10676
4.3
10856#
10798#
11144
11370
11815
12240
9.3
(Human Space Flight)
(3014)
(2901)
(2461)
–
(1878)#
(1878)#
(Science, Aeronautics, Technology)
(6481)
(7024)
(7840)
(8900)
–
(9145)#
(9045)#
National Science Foundation
2931
3320
3526
3651
3.5%
4036#
3947#
3728
3811
3900
3991
-7.1
All other R&D
630
702
7631
689
-9.7%
1503#
TOTAL
83769
91534
103150
112047
8.6%
117097#
116824
121726
121476
122065
8.1
NonDefense 40609
45332
49672
53273
7.2%
54274#
54755
55874
57340
58808
8.2
NonDefense Minus NIH
23374
25525
26877
26821
-0.2%
27889#
27746
28264
29086
29892
1.6
Defense
43160
46202
53478
58774
9.9%
62822#
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 counterterrorism and national security. See also
CRS Issue Brief IB10083, Research and Development Funding: Fiscal Year 2002, for detailed information about agency budget requests and congressional action for FY2002.
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