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 December 22, 2003
Genevieve J. Knezo
Resources, Science, and Industry Division
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
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
National R&D funding continues to
over time, reflecting Presidential and national
grow, but the federal R&D share has declined
preferences. Defense R&D predominated in
to 27% of the national total. Scholars and
the 1980s, decreasing to about 50% of federal
policymakers cite the importance of R&D
R&D in the 1990s during the Clinton Admin-
funding to economic growth. Debates focus
istration. In nondefense R&D, space R&D
on whether federal R&D should be increased
was dominant in the 1960s as the nation
across the board; how priorities should be set;
sought to compete with the Soviet Union;
and how to determine “balance” in funding
energy R&D became an additional priority
between health and nonhealth fields.
during the energy-short 1970s, and, since the
1980s, health R&D has predominated. De-
Legislative priority-setting initiatives
fense R&D has emerged again as priorities
include bills to make permanent the research
have shifted to deal with the war against
and experimentation credit (H.R. 428 and
terrorism.
H.R. 463, S. 664 .)
The FY2004 budget request sought to
The Bush Administration included in its
increase R&D funding by about 4.4% overall,
budget request a “Federal S&T” budget,
with increases (in descending order of in-
which may presage a future unified science
crease) for the Department of Homeland
and technology (S&T) budget. The FY2004
Security (DHS), Department of Defense
budget requested funding for three interagency
(DOD), Department of Energy (DOE), the,
R&D initiatives, in networking and informa-
Department of Veterans Affairs, National
tion technology; climate change science; and
Science Foundation, National Institutes of
nanotechnology. Other proposals made to
Health (NIH), Department of Interior, and
coordinate R&D include a continuing priority-
National Aeronautics and Space Administra-
setting mechanism; a cabinet-level S&T body;
tion (NASA). Funding for counterterrorism
functional R&D budgeting; and reestablish-
R&D was requested at about $3 billion. Most
ment of the Office of Technology Assessment
agencies are being funded by continuing
in Congress (H.R. 125). The Administration
resolutions for FY2004 since appropriations
opposes earmarking for R&D, which it said
have been enacted only for the DOD, DHS,
totaled about $1.8 billion in FY2002 and
and for the Legislative Branch. A draft omni-
because the practice distorts agency priorities.
bus appropriations bill would increase funding
The Administration has started to use some
by 8.1% over FY2003, with 93% of the in-
performance measures for R&D budgeting,
crease going to DOD, DHS, and NIH. DOD’s
inspired by the Government Performance and
R&D funding was increased by 12.4% over
Results Act. However, the Administration
FY2003, largely for development programs,
and critics say better data and concepts are
while basic research funding was decreased.
needed to use performance budgeting for basic
Other agencies would have only modest incre-
and applied research. OMB judged agencies
ases or cuts.
that fund R&D using performance manage-
ment measures, with NSF winning accolades
For FY2003, appropriations exceeded
for its financial management procedures.
the requested levels.
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
The FY2004 R&D request, at $122.3 billion, was 4.4 % over FY2003. For FY2004,
most agencies are being funded by continuing resolutions since appropriations have been
enacted only for the Departments of Homeland Security, Defense, and for the Legislative
Branch. Most agencies are being funded by continuing resolutions for FY2004 since
appropriations have been enacted only for the DOD, DHS, and for the Legislative Branch.
A draft omnibus appropriations bill would increase R&D funding by 8.1% over FY2003,
with 93% of the increase going to DOD, DHS, and NIH. DOD’s R&D funding was increased
by 12.4% over FY2003, largely for development programs, while basic research funding was
decreased. Other agencies would have only modest increases or cuts.
BACKGROUND AND ANALYSIS
Federal R&D funding priorities 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 also CRS Report RL30905,
Federal Research and Development: Budgeting and Priority-Setting, 1993-2000.)
FY2002 Budget Action
The FY2002 R&D budget request, at $96.5 billion, would have increased R&D funding
by 6.1% over the enacted FY2001 level. Major 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. Appropriations action raised FY2002 R&D funding
above the request 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
1 “Federal R&D Climbs to Record High of $103.7 Billion,” AAAS R&D Update, Dec. 28, 2001.
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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
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].
Continuing resolutions funded the government 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 FY2003 appropriated level. Similar to the FY2003 funding pattern,
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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counterterrorism spurred increases in DOD R&D, at 7.1% more than FY2003, and in DHS,
at about $1 billion, or almost 50% more than FY2003. Since the planned doubling of NIH’s
budget by 2003 is almost complete, NIH’s proposed increase was slowed to 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 fell short of the 15% envisioned in the authorizing
legislation. In the Commerce Department, the President sought to 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, included 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. Most agencies are being funded by
continuing resolutions for FY2004 since appropriations have been enacted only for DOD,
DHS, and for the Legislative Branch. A draft omnibus appropriations bill would increase
R&D funding by 8.1% over FY2003, with 93% of the increase going to DOD, DHS, and
NIH. DOD’s R&D funding was increased by 12.4% over FY2003, largely for development
programs, while basic research funding was decreased. Other agencies would have only
modest increases or cuts. NSF’s R&D budget would increase by 4.7%; and DOE’s by 6.1%.
Reductions would be made in USDA R&D (-4.9%) and in DOT R&D (-8.2%). NIST’s
budget would be decreased by 3.9%, with a 0.9% cut in the ATP program. See Table 3.
Counterterrorism Funding
Counterterrorism R&D funding was requested to be increased from about $1.2 billion
in FY2002 to almost $2.7 billion for FY2003, and is requested at $3.2 billion for FY2004.
See Table 1. The largest FY2004 programs are in NIH largely for bioterrorism R&D and
for construction of containment facilities; the Department of Homeland Security, Science and
Technology Directorate; the National Science Foundation; the Department of Defense; and
the Department of Justice. Other programs are in the Department of Agriculture, the
Department of Commerce (NIST); the Environmental Protection Agency; the Department
of Transportation, and the Department of State. See CRS Report RS21270.
P.L. 107-296, the Homeland Security Act of 2002, consolidated some federal homeland
security R&D programs in the new Department of Homeland Security (DHS). DHS’s
FY2004 R&D budget request was $907 million; Congress agreed to raise appropriations by
about 16% to $1050 million. See Table 3. According to OMB, about 5% 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.
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Table 1. Research and Development to Combat Terrorism, By Agency,
FY2000-FY2004 (Request)
(Dollars in Millions)
FY2002
FY2003
FY2000
FY2001
FY2002
FY2004
Agency
Supple-
FY2003 Enacted Supple-
Actual
Actual
Enacted
Request
mental
mental
Agriculture
$37.3
$51.7
$28.0
$52.2
$30.4
---
$42.1
Commerce
9.6
0
11.7
7.0
16.4
---
19.4
Corps of Engineers - unknown
unknown
---
3.0
---
---
---
Civil Works
Defense
unknown
unknown
259.0
2.0
597.0
---
157.0
Energy
59.7
66.2
64.9
19.0
19.0
--- [43.7] (OMB
FY2003 rept.
p, 57)
EPA
unknown
0
2.8
1.5
49.7
---
29.0
DHHS
109.7
102.8
117.2
85.0
831.2
---
1648.2
[previous FY2003
data=1,770.9
(NIH, $1.75B;
CDC, $40M;
FDA, $50M]
Homeland Security
---
---
110.0
93.4
658.2
---
844.0
Justice
45.2
11.4
13.1
76.1
173.5
4.9
174.7
NSF
unknown
7.0
7.0
0
27.0
Postal Service
unknown
unknown
---
9.5
---
---
---
State
unknown
unknown
1.8
---
1.8
---
1.8
Transportation
50.7
50.2
54.7
54.0
3.7
---
3.9
Treasury
2.1
1.2
1.1
0
1.1
unknown
Total
$511.3
$589.4
$827.0
$383.6
$2,649.4
$4.9
$3,205.7
Source: OMB, Annual Report to Congress on Combating Terrorism, FY2002, p. 27 for column “FY2000;”
OMB, Annual Report to Congress on Combating Terrorism, June 24, 2002, p. 26, for column FY2001, DOE
for FY2002, DHHS for FY2003, and Treasury. The rest is from OMB, 2003 Report to Congress on Combating
Terrorism, Sept. 2003, p. 16, available at [http://www.whitehouse.gov/omb/inforeg/2003_combat_terr.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
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it” (p. 29). In Spring 2000, President Clinton’s Committee of Advisors on Science and
Technology (PCAST), in Wellspring of Prosperity, described some of the payoffs from
federal investments in R&D, which it said “underscores the need for sustained and
cooperative support in the 21st century to avoid the dangers and seize the opportunities.”3
Table 2. Department of Homeland Security: R&D in the FY 2004 Budget
(budget authority in millions of dollars)
FY 2003
FY 2004
H.[conf.]Rpt. 108-280, on H.R. 2555,
Estimate
Request*
became P.L. 108-90 on 10/1/2003
DHS R&D:
Border & Transportation Security (TSA)
$110
$75
$155
Emergency Preparedness
0
0
0
Information Analysis and Infra.
15
5
5
Science and Technology
521
803
874
Biological countermeasures
—
365
199
Nuclear & Radiological countermeasures
—
137
127
Chemical ctrmeasures
—
55
52
High Explosives ctrmeasures
—
10
10
Threat & vulnerability assessments
—
90
94
Conventional missions
—
55
34
Rapid Prototyping / TSWG
—
30
75
Standards / state and local
—
25
39
Emerging threats
—
22
21
Critical infrastructure protection
—
5
67
University programs / HS fellowships
—
10
70
Salaries & expenses 1/ ( Mgt/Adm. in H.Rept 108-280)
—
44 (in S&T directorate,
not counted as R&D)
Nat’l Biodef. Anly&Countermeasures Cntr2/
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0
88
Coast Guard
23
23
15
Total DHS R&D
669
907
Excluding Mgt/Adm., 1050
Selected non-R&D items:
0
890
890
Biodefense countermeasures (BioShield)
Total DHS Discretionary Budget
28875
28372
29411
Source, except for last column, based on largely on: 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.
* FY 2004 request figures have been revised since the February 2003 release of the President’s budget.
1/ The House Homeland Security appropriations bill moved salaries and expenses for federal employees in the S&T Directorate from
program line items to a consolidated Salaries & Expenses account. 2/Funded in Biological Counter-measures in FY2003, FY2004 request,
and FY2004 House, but as a separate line item in FY2004 Senate bill. Congress agreed to the conference report on Sept. 24.
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?
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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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. 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.4 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%.5 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. Related issues are
whether incentives should be increased for states6 and industry to augment support of basic
and academic research, or whether too much support from these sources would overwhelm
4 B. Shackelford, “Slowing R&D Growth Expected in 2002,” SRS Info Brief, Dec. 2002, NSF 03-
307; 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.
5 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.
6 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.
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academic research with pressure to conduct short-term applied studies.7 Among the
legislative options in this area 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, 2004.8 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?9 Some are concerned that the emphasis on health R&D may presage a scarcity of
knowledge and personnel in physical sciences, math, and engineering.10 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.
Congressional Views About the Balance in Federal R&D Funding. There
are various perspectives on the issue of balance. In the House, the Science Committee, in
7 NSTC, Implementation of the NSTC Presidential Review Directive-4: Renewing the Federal
Government-University Research Partnership...., Jan. 2001.
8 See CRS Report 95-50 SPR, The Federal Role in Technology Development, by W. Schacht. and
CRS Report RL31181, Research Tax Credit: Policy Issues for the 108th Congress, by G. Guenther.
9 See also CRS Report RL31031, The Changing Composition of the Federal Research and
Development Portfolio, by M. E. Davey and R. E. Rowberg.
10 In 2003, the National Science Board released a draft report assessing shortages in “Workforce
P o l i c i e s f o r S c i e n c e a n d E n g i n e e r i n g , ”
http://www.nsf.gov/nsb/documents/2003/nsb0369/nsb0369_drft.doc
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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
Figure 1. Trends in Nondefense R&D Funding, FY1953-FY2004
cannot create 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 newest physics of machinery and engineers and
nano-engines and the like?”11 Thirty-two Nobel laureates and industry executives wrote a
letter to President Bush in April 2003, urging increased funding for physical sciences,
11 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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m a t h e m a t i c s a n d e n g i n e e r i n g i n t h e 2 0 0 5 b u d g e t
[http://www.aps.org/media/pressreleases/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,12 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.”13
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).
12 “PCAST Releases Report on U.S. R&D Investment,” CFR Weekly ‘Wrapup, Feb. 14, 2003.
13 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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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.14 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 has been concern that the Administration’s FY2004
NSF R&D request, at 2.8%, was not large enough to meet the authorization’s doubling
goals. However, the House increased NSF’s FY2004 R&D funding by 3% and the Senate
Appropriations Committee by about 1%.
Federal R&D Priority-Setting Structures
Some observers recommend more centralized priority-setting for R&D in Congress and
in the executive branch. Some cite a need for an executive branch mechanism to determine
a unified R&D budget and to evaluate the total government R&D portfolio in terms of
progress toward meeting national objectives. Others say that congressional jurisdiction for
R&D is split among a number of committees and subcommittees, preventing examination
of the R&D budget as a whole. This means that R&D funding can serve particular local or
program interests, but may not be appropriate for a national R&D agenda. Opponents see
value in a decentralized system in which budgets are developed, authorized, and appropriated
separately by those most familiar with the needs of specific fields of R&D — the department
or agency head and the authorizing and appropriations subcommittees with jurisdiction.
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,
for FY2004, includes less than half of total federal R&D spending and some non-R&D
14 See Federal Funding for Biomedical and Related Life Sciences Research FY2002.
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funding, such as education and dissemination of information.15 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.” 16
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.17 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
15 Sec. 8, FY2004 Budget, Analytical Perspectives.
16 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.
17 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.18 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. 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. 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. The provision was not included
in the conference report on H.R. 6, House Report 108-375.
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, GAO-03-174, 2002. Another GAO assessment, 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). S. Rept 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. H.R.
2657 became P.L. 108-83 (Conf. Report 108-279). See also Technology Assessment in
Congress: History and Legislative Options, CRS Rept. RS21586.
18 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, 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 26, 2003, reported that for FY2003, Congress earmarked $2.012
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.19 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, 2001.20
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.
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, 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. 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
19 AAAS, “Senate Earmarks Approach $1 Billion in FY2003 Budget,” Aug. 26, 2002.
20 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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research outcomes cannot be defined well in advance and often take a long time to
demonstrate, and that, as a result, there is little confidence that R&D performance measures
can be used 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.21 The
majority did not take a position on this issue.
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.
21 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,
SELECTED AGENCIES &
FY2000
FY2001
FY2002
FY2004
FY2004, House or
FY2004 Senate or
Final FY2004 or
Approved, AAAS
PROGRAMS
actual
actual
actual
Request
Apps. Comm.(C)
Apps. Comm. (C)
Conf. (CF)
Est.
Dept. of Agr. Total
$1776
$2181
$2112
$2276
$1943
$2064
$2105(C)
$2166(CF)
(Agr. Res. Service)
—
(1012)
(1234)
(1294)
(1034)
(1073)
(1115)(C)
(1169)(CF)
(CSREES)
—
(594)
(532)
(608)
(524)
(596)
(601)(C)
(604)(CF)
(Forest Service)
—
(245)
(265)
(265)
(268)
(282)
(281)(C)
(281)(CF)
Dept. of Commerce Total
1174
1030
1328
1298
1100
980
1386(C)
1260(CF)
(NOAA)
(643)
(561)
(611)
(684)
(675)
(582)
(716)(C)
(724)(CF)
(NIST)
(471)
(413)
(460)
(527)
(411)
(368)
(640) (C)
(506)CF
(ATP) (Within NIST)
(116)
(118)
(150)
(153)in NIST (10) in NIST
(0)
(222) (C) in NIST
(152) in NIST(CF)
Dept. of Defense Total
39959
42740
49877
58724
62821
65953
64823
65998
(S&T (6.1-6.3+ medical))
(8632)
(9365)
(10337)
(11232)
(10297)
(12316)
(11764)
(12581)
Dept. of Education
238
264
265
315
275
327
295(C)
310 (CF)
Dept. of Energy Total
6956
7733
8078
8205
8535
8606
8765(C)
8768(CF)
(Atomic/Defense)/(NNSA+Defense)
(3201)
(3462)
(3855)
(3869)
(4108)
(4045
(4258)
(4151)(CF)
(Energy & Science)
(3755)
(4271)
(4224)
(3866)
(3840)
(4561)
(4507)
(4617)(CF)
Dept. of HHS Total
18182
21045
23696
27566
28203
28204
28576
28473(CF)
(NIH)
(17234)
(19807)
(22714)
(26245)
(26946)
(26947)
(27254)
(27093)(CF)
Dept. of Homeland Security*
—
—
266
669
907
1054
1001
Excluding 44 for
Adm.,1050
Dept. of Interior Total
618
621
641
627
633
666
668(C)
676(CF)
(U.S. Geological Survey)
—
(566)
(583)
(569)
(545)
(577)
(573)(C)
(579)(CF)
Dept. of Transportation Total
607
718
778
72
693
597(C)
632 (C)
644(CF)
(FAA)
(220)
(301)
(359)
(271)
(204)
(222)
(257)(C)
(250)(CF)
(FHA)
(261)
(294)
(275)
(291)
(363)
(243)
(245)(C)
(246)(CF)
(NHTSA)
(51)
(58)
(59)
(61)
(60)
(58)
(58)(C)
(58)(CF)
Dept. of Veterans Affairs
645
719
756 800
822
822
827(C)
820(CF)
Environmental Protection Agency
558
574
592
641
607
634
600 (C)
654(CF)

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FY2003,
SELECTED AGENCIES &
FY2000
FY2001
FY2002
FY2004
FY2004, House or
FY2004 Senate or
Final FY2004 or
Approved, AAAS
PROGRAMS
actual
actual
actual
Request
Apps. Comm.(C)
Apps. Comm. (C)
Conf. (CF)
Est.
NASA Total
9494
9887
10224
10999
11025
11096
10895(C)
10958
(Space Flight)
(3014)
(2901)
(2461)
(3613)
(3425)
(3449)
(3225) (C)
3136(CF)
(Science, Aeronautics, Tech.)
(6481)
(7024)
(7840)
(7386)
(7661)
(7647)
(7670)(C)
7883(CF)
National Science Foundation
2931
3320
3525
3927
4035
4171
4081(C)
4113(CF)
All other R&D
630
702
912
1322
792
783
796
TOTAL
83769
91534
102899
117106
122259
125948
125449
126968(CF)
NonDefense 40609
45332
49167
54121
54744
55432
55496
56030(CF)
NonDefense Minus NIH
23374
25525
26453
27875
27798
28485
28242
29938(CF)
Defense
43160
46202
53731
62986
67515
70515
69953
70938
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 IB10117, Federal Research and Development Funding: FY2004.
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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