Order Code IB10088
CRS Issue Brief for Congress
Received through the CRS Web
Federal Research and Development:
Budgeting and Priority-Setting Issues,
108th Congress
Updated August 8, 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 Action
FY2004 Budget
Counterterrorism Funding
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
Congressional Views About the Balance in Federal R&D Funding
Professional Groups’ Views About Balance
NSF Funding
Federal R&D Priority-Setting Structures
Unified Federal Science and Technology (FS&T) Budget
Interagency R&D Initiatives
Proposals to Coordinate Federal R&D
Legislation on Technology Assessment
Earmarking
Government Performance and Results Act (GPRA)
108th Congress Legislation

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Federal Research and Development: Budgeting and Priority-Setting
Issues, 108th Congress
SUMMARY
Federal R&D funding priorities change
funding to economic growth. Debates focus
over time, reflecting Presidential and national
on whether federal R&D should be increased
preferences. Defense R&D predominated in
across the board; how priorities should be set;
the 1980s, decreasing to about 50% of federal
and how to determine “balance” in funding
R&D in the 1990s during the Clinton Admin-
between 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 make permanent the research
energy R&D became an additional priority
and experimentation credit (H.R. 428 and
during the energy-short 1970s, and, since the
H.R. 463, S. 664 .)
1980s, health R&D has predominated. De-
fense R&D has emerged again as priorities
The Bush Administration included in its
have shifted to deal with the war against
budget request a “Federal S&T” budget,
terrorism. The FY2004 budget request seeks
which may presage a future unified science
to increase R&D funding by about 4.4%
and technology (S&T) budget. The FY2004
overall, with increases (in descending order of
budget requested funding for three interagency
increase) for the Department of Homeland
R&D initiatives, in networking and informa-
Security, Department of Defense (DOD),
tion technology; climate change science; and
Department of Energy (DOE), the, Depart-
nanotechnology. Other proposals made to
ment of Veterans Affairs, National Science
coordinate R&D include a continuing priority-
Foundation, National Institutes of Health
setting mechanism; a cabinet-level S&T body;
(NIH), Department of Interior, and National
functional R&D budgeting; and reestablish-
Aeronautics and Space Administration
ment of the Office of Technology Assessment
(NASA). R&D funding would decrease in the
in Congress (H.R. 125). The Administration
Departments of Education, Commerce, Agri-
opposes earmarking for R&D, which it said
culture (USDA), Transportation, and Environ-
totaled about $1.8 billion in FY2002 and
mental Protection Agency (EPA). If the
because the practice distorts agency priorities.
increase in NIH R&D funding were not
The Administration has started to use some
counted, civilian R&D funding would fall by
performance measures for R&D budgeting,
0.3%. Counter terrorism R&D funding is
inspired by the Government Performance and
requested at about $3 billion. Congressional
Results Act. However, the Administration
appropriations action on FY2003 R&D fund-
and critics say better data and concepts are
ing exceeded the requested levels.
needed to use performance budgeting for basic
and applied research. OMB judged agencies
National R&D funding continues to
that fund R&D using performance manage-
grow, but the federal R&D share has declined
ment measures, with NSF winning accolades
to 27% of the national total. Scholars and
for its financial management procedures.
policymakers cite the importance of R&D
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MOST RECENT DEVELOPMENTS
The FY2004 R&D request, at $122.3 billion, is 4.4% over FY2003. Most of the
increases would go to the Department of Homeland Security and DOD. House and Senate
action so far in Appropriations Committee reports or floor action has raised R&D budgets
above the requested level for the Departments of Agriculture, Defense, Energy, Homeland
Security and Interior, and for NIH.
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. Appropriations action raised FY2002 R&D funding
above the requested levels for all agencies and raised total R&D funding to about $103.7
billion. 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 and Report RS21270.)
FY2003 Budget Action
The President’s R&D request totaled about $112 billion, about 8% more than the
appropriated level for FY2002. Similar to the patterns for FY2002, the increases proposed
for DOD R&D, at 11% more than FY2002, and for NIH, at about 16% more, accounted for
most of the total proposed funding increase, leaving all the other R&D funding agencies
combined with less money than in FY2002.2 Total defense R&D funding, spurred in part by
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
(continued...)
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anti-terrorist priorities, for DOD and the Department of Energy’s (DOE) military/nuclear
programs, would have increased 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. The rise in NIH was
attributable to this being the final year of the congressional policy to double NIH’s funding
by 2003 and in part to increased counterterrorism funding. See Table 3. The House Budget
Resolution, H. Con. Res. 353, and the Senate Budget Resolution, S.Con.Res. 100, 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
adopted 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].
Because of House/Senate differences on discretionary spending levels, most of the
Government was funded by a continuing resolution until February 20, 2003 when the
President signed the Consolidated Appropriations Resolution for FY 2003, P.L. 108-7,
which appropriated funds for agencies funded by the 11 incorporated appropriations bills
(two defense appropriations bill were enacted separately). R&D was funded at about $117
billion. Although civilian agencies’ budgets were cut 0.65% across the board for most
domestic programs, appropriations were increased significantly for R&D in DOD (+18%),
NIH, (+15.5%). DHS (+66%) and NSF (+11.4%). Other R&D programs were increased
modestly, except for the Department of Transportation, which was reduced. See Table 3.
FY2004 Budget
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 the
White House’s Office of Management and Budget (OMB) and Office of Science and
Technology Policy (OSTP) guidance 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 (302b)spending allocations for each appropriations subcommittee. The
resolution also gives outyear projections based on budget and economic assumptions. Each
of the 13 appropriations subcommittees 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 President’s FY2004 R&D request totaled about $122.3 billion, about 4.4% more
than the appropriated level for FY2003. Similar to the FY2003 funding pattern,
counterterrorism has fueled increases for DOD R&D, at 7.1% more than last year, and the
Department of Homeland Security, at about $1 billion, or almost 50% more than FY2003.
2 (...continued)
R&D Programs,” Feb. 8, 2002.
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Most of the DOD increase would go to technology development, with other science and
technology and medical research funding proposed to be cut by 8.3%. The planned doubling
of NIH’s budget by 2003 is almost complete; NIH’s proposed increase has slowed to an
estimated 2.7% more than last year. Although legislation was enacted to double NSF’s
budget over five years, NSF’s budget request at 2.8% over FY2003 falls short of the 15%
envisioned in the authorizing legislation. Modest increases of less than 5% were proposed
for NASA, Interior, NIH, NSF, and DOE. Reductions are proposed for R&D in Commerce,
USDA, EPA, and the Department of Transportation. DOD and DOE’s military/nuclear
programs would constitute about 55% of the R&D budget and would be increased by almost
7.2% over FY2003. Total nondefense R&D would be increased by 1.2% , but nondefense
R&D, excluding NIH, would decline by about 0.3% from FY2003. See Table 3.
The largest NSF increases would go to mathematical and physical sciences and to major
equipment and facilities construction projects. DOE’s 4% increase would go largely to
defense activities and nanoscale sciences, offset by a planned drop in construction costs of
the Spallation Neutron Source. Auto fuel research and hydrogen R&D fuel cell research
would increase, balanced by cuts in non-cost fossil fuels R&D and energy conservation
R&D. In the Department of Commerce the President would eliminate the Advanced
Technology Program (ATP), which had a $179 million budget in FY2003, and the
Manufacturing Extension Partnership at NIST.
A conference to resolve the differences between the budget resolutions passed by the
House (H.Con.Res. 95) and Senate (S.Con.Res. 23) cleared Congress on April 11, 2003. The
conference agreement for function 250, general science space and technology, includes an
increase of $324 million above the Administration’s request for NSF research activities and
$100 million more than the Administration requested for DOE science programs. House and
Senate action so far in Appropriations committee reports or floor action has raised R&D
budgets above the requested level for the Departments of Agriculture, Defense, Energy,
Homeland Security and Interior, and for NIH. See Table 3.
Counterterrorism Funding
Counterterrorism R&D funding was requested to be increased from 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 USDA, 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. About $3.2
billion was requested for counterterrorism R&D for FY2004. See CRS Report RS21270.
Public Law 107-296, the Homeland Security Act of 2002, consolidated some federal
counterterrorism R&D programs in the new Department of Homeland Security (DHS).
DHS’s FY2004 R&D budget request was $907 million; both House and Senate action so far
would appropriate more funds than requested. See Table 2. According to OMB, about 5 %
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of DHS R&D will be for basic research; about 13% will be for applied research; about 66%
will be for development; and about 16 % will be for facilities and equipment (Analytical
Perspectives, Budget, FY2004, pp. 183-184). For additional details, see CRS Report
RS21270 and CRS Report RL31914. Dr. Charles McQueary, an engineer, was confirmed
as Undersecretary for Science and Technology in the new DHS. He is recently retired as
President of General Dynamics Advanced Technology Systems.
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;
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].
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 presumed benefits of R&D — the projected high rates
of return to the economy and society from investments in R&D — with a FY2004 R&D
budget request that focuses on defense and health R&D spending and level funding in most
other areas, and also long-term economic and budget projections of deficits, decreasing
outyear federal R&D budgets and reductions in domestic discretionary spending. President
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
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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.”3
Table 2. Department of Homeland Security: R&D in the FY 2004 Budget
(budget authority in millions of dollars)
FY 2003 Estimate FY 2004 Request* FY 2004 House Floor
FY2004 Senate Comm.
DHS R&D:
Border & Transportation Security (TSA)
110
75
126
130
Emergency Preparedness
0
0
0
0
Information Analysis and Infra.
15
5
5
5
Science and Technology
521
803
900
866
Biological countermeasures
—
365
293
244
Nuclear & Radiological countermeasures
—
137
130
131
Chemical ctrmeasures
—
55
52
55
High Explosives ctrmeasures
—
10
10
10
Threat & vulnerability assessments
—
90
86
98
Conventional missions
—
55
112
64
Rapid Prototyping / TSWG
—
30
80
70
Standards / state and local
—
25
39
25
Emerging threats
—
22
21
22
Critical infrastructure protection
—
5
5
72
University programs / HS fellowships
—
10
35
55
Salaries & expenses 1/
—
0
39
0
Nat’l Biodef. Anly & Countermeasures 3/
––
0
0
20
Coast Guard
23
23
23
0 2/
Total DHS R&D
669
907
1054
1001
Selected non-R&D items:
0
890
890
0
Biodefense countermeasures (BioShield)
Total DHS Discretionary Budget
28875
28372
29411
28521
Source: AAAS R&D Funding Update, DHS in FY2004 House Appropriations, June 25, 2003.
AAAS estimates based on FY 2004 appropriations bills. Includes conduct of R&D and R&D facilities.
FY 2003 and FY 2004 request figures based on OMB R&D data and supplemental agency budget data.
Figures are rounded to the nearest million. Changes calculated from unrounded figures.
* FY 2004 request figures have been revised since the February 2003 release of the President’s budget.
1/ The House Homeland Security would move salaries and expenses for federal employees in the S&T Directorate from program line items
to a consolidated Salaries & Expenses account.
2/ The Senate bill would move CG R&D activities to the S&T Directorate under Conventional Missions.
3/ Funded in Biological Countermeasures in fY2003, FY2004 request, and FY2004 House, but as a separate line item in FY2004 Senate
bill.
These figures reflect amendments on the House floor.
3 See also: 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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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 $292 billion in
FY2002, the latest year for which data are available.4 In constant 1996 dollars, total national
R&D increased 50% between the years 1993 and 2002, with industrial support for R&D
increasing 74% and federal government support increasing 14%. OMB historical trend data
indicate that R&D funding has declined from about 17% of total federal discretionary outlays
in FY1965 to about 12% today. In part because of economic pressures and budgetary caps,
during the years FY1994 to FY2000, federal R&D funding was below the previous constant-
dollar high of FY1993. As a result of Congressional action, constant-dollar R&D
appropriations started to eclipse the FY1993 level beginning with FY2001. However,
concerns that had been raised about the declines in federal R&D funding have not abated
because of current projections of economic slowdown, spending to combat terrorism, and a
return to deficit spending, which could reduce discretionary R&D spending.
Industry is the largest supporter and performer of national R&D, funding 67% of total
R&D (the government funds 27%) and conducting 72% of the total. Most industrial R&D
is for near-term applied work and product or prototype development. The government funds
about 10% of R&D performed by industry. Federal support for development, which totals
about 44% 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. The federal government funded almost half of all national expenditures for long-term
basic research (largely in universities and federal laboratories), while industry funded about
30%.6 After industry, universities and colleges are the second-largest performer of national
R&D, funded mostly by the federal government (56% ). As for research per se, about 42%
of federal research dollars go to universities and 24% to mission-oriented work in federal
laboratories, largely at DOD, NIH, and USDA.
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.7 Related issues are
4 B. Shackelford, “Slowing R&D Growth Expected in 2002,” SRS InfoBrief, Dec. 2002, NSF 03-307.
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, 2000 Data Update.
See also Elisa Eiseman, Kei Koizumi, and Donna Fossum, Federal Investment o in R&D, RAND,
Sept. 2002, MR-1639.0-OSTP.
7 The National Science Board is assessing “Workforce Policies for Science and Engineering.”
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whether incentives should be increased for states8 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.9 Among the
legislative options in this area10 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, 2004.11 The Administration seeks to have it
made permanent and estimates it would cost about $33 billion over the period 2004-2008.
Bills introduced on this topic include H.R. 428, H.R. 463, S. 664
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?12 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 FY2004, requested, it is estimated that R&D funding at NIH increased almost 118% in
constant dollars compared to NSF, 61%; DOD, about 30%; the Department of Commerce,
17%; and USDA, about 7%. R&D funding was about level or decreased in constant dollars
for EPA, NASA, and DOE. NIH received about 73% of the increase in federal basic research
funding between FY1993 and FY2004, requested. For FY2004, it is estimated that federally
funded health-related R&D, primarily at NIH, would receive 52% of the civilian R&D
budget. In terms of funding by field, federal obligations for life sciences increased from $9.9
billion in FY1992 to $22.2 billion in FY2002 estimated, or about 125%, while at the same
time, between those years funding for physical sciences increased 16%; mathematics and
computer sciences, 125%; and engineering, 41%. (Based on NSF data and AAAS data.)
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. While the doubling is almost
complete, some say that because the FY2004 increase requested for NIH is small, at 2.7%,
gains made in biomedical R&D will erode.
8 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.
9 NSTC, Implementation of the NSTC Presidential Review Directive-4: Renewing the Federal
Government-University Research Partnership...., Jan. 2001.
10 See CRS Report 95-50 SPR, The Federal Role in Technology Development, by Wendy Schacht.
11 CRS Report RL31181, Research Tax Credit: Policy Issues for the 108th Congress, by Gary
Guenther.
12 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, FY1953-FY2004
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 2004, said it is “...concerned that the
biomedical sciences, in general, and the National Institutes of Health (NIH), in particular,
continue to dwarf the remainder of the R&D budget. While the budget documents
acknowledge the need to increase support for the physical sciences, the proposed spending
levels would not allow that to occur, especially when compared to the enacted levels for
FY03. Similarly, while Defense Department development programs are critical to our
national society, those programs alone cannot crate a stable and secure American society or
even ensure our protection from energy attacks of ver the long-term. Yet while the Pentagon
is slated to receive a 12 percent increase, basic and applied research in the defense
Department would decrease substantially from FY03 requested levels.” Former Senate
Budget Committee Chairman Domenici was reported to have said during a Senate Budget
Committee hearing that “ ... 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
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newest physics of machinery and engineers and nano-engines and the like?”13 Thirty-two
Nobel laureates and industry executives wrote a letter to President Bush in April 2003,
urging increased funding for physical sciences, mathematics and engineering in the 2005
budget [http://www.aps.org/media/pressreleaes/041403.html].
Professional Groups’ Views About Balance
Professional groups have recommended increasing both funding and balance in support
among federally funded research fields. In one of the most recent analyses of this issued, the
President’s Council of Advisors on Science and Technology (PCAST) released Assessing the
U.S. R&D Investment, January 2003. The draft of this report, which had been issued in
August 2002, called for doubling federal budgets for physical sciences and electrical,
mechanical, chemical, and metallurgical and materials engineering, and endorsed doubling
the NSF budget. Reportedly, the OSTP director objected to singling out any agency or field
for doubling,14 so the report recommended targeting physical sciences and engineering to
bring “them collectively to parity with the life sciences over the next 4 budget cycles” in
order to better balance budget allocations. The U.S. Commission on National Security 21st
Century, in Road Map for National Security: Imperative for Change, The Phase III Report
...., 2001 concluded 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 “[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
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
13 Richard M. Jones, “Reaction to the FY2002 Bush Administration S&T Request,” AIP Bulletin of
Science Policy News, FYI #26, Mar. 7, 2001.
14 “PCAST Releases Report on U.S. R&D Investment,” CFR Weekly ‘Wrapup, Feb. 14, 2003.
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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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).
NSF Funding. The National Science Foundation funds research across all disciplines
and is the main federal source for much nonhealth-related academic research. Pleas were
made during the 107th Congress to double the NSF budget. For instance, the Coalition for
National Science Funding (CNSF), which represents many universities and professional
science associations, in a February 7, 2002 press release, 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.16 The enactment of H.R. 4664, the NSF authorization bill for FY2003,
as P.L. 107-368, increases NSF’s budget by 15% for each of FY2003, FY2004, and FY2005,
which according to the sponsors, would “put the NSF on the track to double its budget
within five years,” similar to the NIH doubling track in an effort to increase federal support
for science fields which, in recent years, have not experienced the larger percentage
increases which have gone to biomedical R&D. The law also requires increased oversight
of NSF facilities programs. FY2003 appropriations action set NSF on a course to double its
budget over the next five years. There is still concern that the Administration’s FY2004 NSF
R&D request, at 2.8%, is not large enough to meet the authorization’s doubling goals.
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 th//at 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.
Unified Federal Science and Technology (FS&T) Budget
In a 1995 report, Allocating Federal Funds for Science and Technology, the National
Academies recommended that the President use 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 recommended that R&D requested in the budget be
reconfigured as a S&T budget, excluding defense development, testing and evaluation
activities, to denote basic and applied R&D and the creation of new knowledge. Since the
FY2002 budget request, OMB has used a modified version of the format proposed by the
Academy, and identified a “Federal Science and Technology (FS&T) budget table,” which,
16 See Federal Funding for Biomedical and Related Life Sciences Research FY2002.
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for FY2004, includes less than half of total federal R&D spending and some non-R&D
funding, such as education and dissemination of information.17 FS&T funding would
increase about 2.0% from FY2003 to FY2004. 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 identified interagency R&D
budget priorities. The FY2004 budget identified agency funding for two interagency R&D
initiatives whose reporting is required by statute,”Networking and Information Technology
R&D,” at $2,179 million, a 6% increase over FY2003, and “Climate Change Science
Program,” which incorporated the U.S. Global Change Research Program, with level
funding. Another interagency Administration initiative deals with nanotechnology, funded
at $849 million, a 9.8% increase over FY2003. Other FY2004 interagency R&D initiatives
enunciated by the Administration were in combating terrorism R&D, molecular-level
understanding of life processes; and education R&D. For FY2005, the education initiative
was replaced by an initiative in “environment and energy.” 18
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 Congress and 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.19 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
17 Sec. 8, FY2004 Budget, Analytical Perspectives.
18 FY2004 Interagency R&D Priorities, Memorandum, from Director, OSTP and Director, OMB,
May 30, 2002 and FY2005 Interagency R&D Priorities, Memorandum, June 5, 2003.
19 Rebecca Spieler, “AAAS President Concerned About Imbalances in Nation’s R&D Portfolio...,”
Washington Fax, Feb. 21, 2001.
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Congress. ...[I]n large, complex technical program, ... committees should ... consider
holding joint hearings and perhaps even writing joint authorization bills” (p. 7).
Legislation on Technology Assessment
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 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.20 The OTA
is still authorized, but funds would have to be appropriated for it. During the 107th Congress,
H.R. 2148, a bipartisan bill, would have authorized OTA funding at $20 million annually for
five years. Title XVI of H.R. 4, in the 107th Congress, an energy bill as passed by the Senate
on April 25, 2002, would have created a Science and Technology Assessment Service within
the legislative branch. It was to have a congressional Board and Director. This language was
not in the version of the bill passed in House. The conference was not finished on this bill.
In 2003, the Senate substituted its version of H.R. 4 as passed in 2002 into the House-passed
version of H.R. 6, the energy bill under consideration and passed it. Thus, the sane
Assessment Service proposal is before the 108th Congress. A conference is pending. H.Rept.
107-259, the conference report that accompanied H.R. 2647, which was signed as P.L. 107-
68, recommended $500,000 for GAO for a technology assessment pilot project and report,
which GAO issued as Technology Assessment: Using Biometrics for Border Security, GA)-
03-174, 2002. Another GAO assessment, to be funded at $1 million was called for in S.Rept.
107-209, which accompanied S. 2720, the Senate version of the FY2003 Legislative Branch
appropriations bill. The House version did not contain this language. Legislative branch
appropriations funding was enacted as part of the Consolidated Appropriations Act, P.L. 108-
007. GAO initiated a technology assessment on cybersecurity technologies for critical
infrastructure in response to the Senate language. The House Legislative Branch
Appropriations Report for FY2004 endorses GAO continuing to conduct technology
assessment studies (H.Rept. 108-186, July 1, 2003, on H.R. 2657). Senate Report 108-88,
accompanying S. 1383, which was inserted in H.R. 2657, and passed on July 11, 2003,
recommended $1 million for funding two or three technology assessments in FY2004. A
conference is pending. H.R. 125, introduced in the 108th Congress, is similar to H.R. 2148,
107th Congress and would authorize funding for OTA at $20 million annually to 2009.
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
20 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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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, FY2004 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 DOE, and NASA, in that
order.21 The Administration seeks to discourage earmarking saying that it distorts agency
priorities. A conference on the pros and cons of earmarking was held on October 3, 200122
Government Performance and Results Act (GPRA)
The Government Performance and Results Act of 1993 (GPRA), P.L. 103-62, is
intended to produce greater efficiency, effectiveness, and accountability in federal spending
and to ensure that an agency’s programs and priorities meet its goals. It also requires
agencies to use performance measures for management and, ultimately, for budgeting. All
major R&D funding agencies have developed performance measures to assess the results of
their R&D programs. Recent actions have required agencies to identify more precisely R&D
goals and measures of R&D outcomes. As underscored in The President’s Management
Agenda, beginning in FY2001 and in each year thereafter, the Bush Administration has
emphasized the importance of performance measurement, including for R&D. In a
memorandum dated April 24, 2002, from the OMB Director, regarding planning for the
FY2004 budget requests, the Administration announced that its effort to base budget
decisions on program performance would continue and be expanded (M-02-06.) Section 8
of OMB’s Analytical Perspectives, Budget of the U.S. Government, FY2004, discusses
requirements for agencies to use specific OMB-defined criteria to measure the outcomes of
basic and applied research, focusing on measures of relevance, quality, and performance.
R&D projects relevant to industry are to meet additional criteria relating to the
appropriateness of public investment, demonstrate a capability to measure benefits, and
identify decision points to transition the activity to the private sector. Several agencies,
including NASA, NSF, and NIH, are revising their strategic plans, annual performance plans,
and annual performance reports required by GPRA, to describe their activities in terms of the
new criteria. The Administration is also assessing some R&D programs by use of a new
Program Assessment Rating Tool (PART) which uses the R&D criteria. PART results were
published in Performance and Management Assessments, Budget of the United States
Government, Fiscal Year 2004. Commentators have pointed out that it is particularly
difficult to define priorities for most research and to measure the results quantitatively, since
research outcomes cannot be defined well in advance and often take a long time to
21 AAAS, “Senate Earmarks Approach $1 Billion in FY2003 Budget,” Aug. 26, 2002.
22 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.
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demonstrate. Many observers say that refinement of R&D goals and measures is needed
before performance measures can be used with confidence to recommend budget levels for
most R&D. The minority staff of the House Science Committee criticized the
Administration’s use of performance metrics in making budgetary decisions, faulting the
judgments that are used to rate programs and the fact that political decisions appear to
supercede the use of metrics in some decision-making.23
The Department of Energy, has started to use the results of the R&D investment criteria,
according to OMB, to help analyze its portfolio of investments in relation to producing
public benefits. The National Academies [of Science] (NAS) issued two reports to assist
agencies in developing performance measures for research. The most recent is entitled
Implementing the Government Performance and Results Act for Research: A Status Report,
2001. As for Congressional interest, the House Science Committee’s science policy report,
Unlocking Our Future, 1998, commonly called the Ehlers report, recommended that a
“portfolio” approach be used when applying GPRA to basic research. P.L. 106-531
mandated that an agency head 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 (106th
Congress) 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.” (See CRS reports RS20257, Government Performance and Results Act:
Brief History and Implementation Activities and RS20938, Performance Management and
Budgeting: Benchmarks and Recent Developments.)
108th Congress Legislation
H.R. 125, To reestablish the Office of Technology Assessment, Introduced by Rep.
Rush D. Holt, 1/7/2003, Referred to the House Science Committee.
H.R. 428, To amend the Internal Revenue Code of 1986 to make the credit for
increasing research activities permanent, Introduced by Rep. James F. Sensenbrenner,
1/28/2003, Referred to House Ways and Means Committee.
H.R. 463, To amend the Internal Revenue Code of 1986 to permanently extend the
research credit, to increase the rates of the alternative incremental credit, and to provide an
alternative simplified credit for qualified research expenses, Introduced by Rep. Nancy L.
Rep Johnson, Nancy, 1/29/2003, Referred to House Ways and Means Committee.
H.R. 175, To abolish the Advanced Technology Program, Introduced by Rep. Edward
R. Royce, 2/20/2003, Referred to House Science Committee.
S. 664, to amend the Internal Revenue Code of 1986 to permanently extend the research
credit, to increase the rates of the alternative incremental credit, and to provide an alternative
simplified credit for qualified research expenses, Sen Orrin G. Hatch , 3/19/2003.
23 Committee on Science, Democratic Caucus, “Additional Democratic Views and Estimates on the
FY2004 Budget for Civilian science and Technology Programs,” Mar. 5, 2003.
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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)
FY2003,
% Change
SELECTED AGENCIES &
FY2000
FY2001
FY2002
FY2004, House or FY2004 Senate
Approved, AAAS
FY2004 Request
FY2003-
PROGRAMS
actual
actual
actual
Apps. Comm.(C)
Apps. Comm.
Est.
FY2004 Req.
Dept. of Agr. Total
$1776
$2181
$2112
$2276
$1943
$2064 (C)
$2105 (C)
-10.3%
(Agr. Res. Service)
—
(1012)
(1234)
(1294)
(1034)
(1073)(C)
(1115)(C)
(CSREES)
—
(594)
(532)
(608)
(524)
(596)(C)
(601)(C)
(Forest Service)
—
(245)
(265)
(265)
(268)
(282)(C)
(281)(C)
Dept. of Commerce Total
1174
1030
1328
1298
1100
960 (C)
-17.2%
(NOAA)
(643)
(561)
(611)
(684)
(675)
(582)(C)
-12.2%
(NIST)
(471)
(413)
(460)
(527)
(411)
(368)(C)
-22.0%
(ATP) (Within NIST)
(116)
(118)
(150)
—
—
(0) (C)
Dept. of Defense Total
39959
42740
49877
58724
62821
65953(C)
64823(C)
12.3%
(S&T (6.1-6.3+ medical))
(8632)
(9365)
(10337)
(11232)
(10297)
(12316)(C)
(11714) (C)
9.7%
Dept. of Education
238
264
265
315
275
-12.8%
Dept. of Energy Total
6956
7733
8078
8205
8535
8606 (C)
8765 (C)
4.0%
(Atomic/Defense)/(NNSA+Defense)
(3201)
(3462)
(3855)
(3869)
(4108)
(4045)(C)
(4258)(C)
8.2%
(Energy & Science)
(3755)
(4271)
(4224)
(3866)
(3840)
(4561)(C)
(4507)(C)
-0.7%
Dept. of HHS Total
18182
21045
23696
27566
28203
28211(C)
28576
3.7%
(NIH)
(17234)
(19807)
(22714)
(26245)
(26946)
(27254)(C)
(27254)(C)
3.8%
Dept. of Homeland Security*
—
—
266
669
907
1054
1001(C)
57.5%
Dept. of Interior Total
618
621
641
627
633
665(C)
661(C)
2.2%
(U.S. Geological Survey)
—
(566)
(583)
(569)
(545)
(577)(C)
(573)(C)
—
Dept. of Transportation Total
607
718
778
72
693
-1.2%
(FAA)
(220)
(301)
(359)
—
—
—
(FHA)
(261)
(294)
(275)
—
—
—
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FY2003,
% Change
SELECTED AGENCIES &
FY2000
FY2001
FY2002
FY2004, House or FY2004 Senate
Approved, AAAS
FY2004 Request
FY2003-
PROGRAMS
actual
actual
actual
Apps. Comm.(C)
Apps. Comm.
Est.
FY2004 Req.
(NHTSA)
(51)
(58)
(59)
—
—
—
(TSA)
new
agency
(14)
—
—
—
Dept. of Veterans Affairs
645
719
756 800
822
2.8%
Environmental Protection Agency
558
574
592
641
607
634
-5.3%
NASA Total
9494
9887
10224
10999
11025
11096
0.2%
(Human Space Flight)
(3014)
(2901)
(2461)
—
—
—
(Science, Aeronautics, Tech.)
(6481)
(7024)
(7840)
—
—
—
National Science Foundation
2931
3320
3525
3927
4035
4171
2.8%
All other R&D
630
702
912
1322
792
-66.0%
TOTAL
83769
91534
102899
117106
122259
4.4%
NonDefense 40609
45332
49167
54121
54744
1.2%
NonDefense Minus NIH
23374
25525
26453
27875
27798
-0.3%
Defense
43160
46202
53731
62986
67515
7.2%
Source: Based largely on American Association for the Advancement of Science, with tables appearing at [http://www.aaas.org/spp/dspp/rd/fy03.htm] and AAAS, “FY’04 Budget
Proposes defense and Homeland Security Increases, Modest Growth or Cuts for Other R&D Programs,” Feb. 25, 2003, revised and subsequent updates. 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 FY2003 are AAAS estimates of congressional appropriations. See also CRS Issue Brief IB10100, Federal Research and Development Funding: FY2003.
DOD FY2003 figures are adjusted to reflect rescissions and supplementals enacted in P.L. 108-2 and P.L. 108-11.
*FY2002 data for comparison purposes only. DHS was to begin operations in FY2003. DHS figures include programs to be transferred from other agencies.
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