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 1, 2004
Genevieve J. Knezo
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
FY2003 Budget Action
FY2004 Budget
FY2005 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) and PART



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Federal Research and Development:
Budgeting and Priority-Setting Issues, 108th Congress
SUMMARY
Federal R&D funding priorities change
bill, P.L. 108-199, effectively increased R&D
over time, reflecting Presidential and national
funding to about $127.0 billion, or by 8% over
preferences. Defense R&D predominated in
FY2003, with 93% of the increase going to
the 1980s, decreasing to about 50% of federal
DOD, DHS, and NIH. Other agencies had only
R&D in the 1990s. In nondefense R&D,
modest increases or cuts.
space R&D was important in the 1960s as the
nation sought to compete with the Soviet
National R&D funding continues to grow,
Union; energy R&D was a priority during the
but the federal R&D share has declined to less
energy-short 1970s, and, since the 1980s,
than 30% of the total. Debates focus on which
health R&D has predominated in civilian
fields of federal R&D should be increased and
science. Defense R&D has re-emerged to
how to set priorities and to “balance” health
support the war against terrorism.
and nonhealth fields.
Except for the Departments of Homeland
Legislative priority-setting initiatives
Security (DHS) and Defense (DOD), FY20-
include bills to make permanent the research
05 R&D appropriations are funded by H.R.
and experimentation credit (H.R. 428, H.R.
4818, an omnibus bill, signed on November
463, H.R. 2896, S. 664, S. 1475, and S. 1637).
20. The President’s FY2005 R&D request
totaled about $131.7 billion, about 4.7% more
The Administration included in its request
than the FY2004 appropriated level. Pres-
a “Federal S&T” budget, which may presage a
sures on the discretionary budget have in-
future unified science and technology (S&T)
creased; final R&D appropriations totaled
budget. The FY2005 budget requested funding
about $132.2 billion, about 80% of which was
for three interagency R&D initiatives: net-
for defense R&D. Non-defense R&D in-
working and information technology; climate
creased about 2.1%. The largest increases
change science; and nanotechnology. Other
went to R&D in DHS, DOD, Agriculture,
proposals to coordinate R&D include a contin-
Commerce, and Transportation; smaller
uing priority-setting mechanism; a cabinet-
increases were made for R&D in the Depart-
level S&T body; functional R&D budgeting;
ment of Energy and for the National
and reestablishment of a technology assessment
Aeronautics and Space Administration and the
function (H.R. 125, H.R. 4755, H.R. 4670, and
National Institutes of Health. The National
S. 2556). The Administration opposes earmark-
Science Foundation’s budget was cut by about
ing for R&D, which AAAS estimated totaled
0.3% from the FY2004 level. R&D was also
about $2.1 billion for FY2005, because the
reduced from the FY2004 level for the
practice distorts agency priorities. The Admin-
Department of Education and the
istration has started using some performance
Environmental Protection Agency.
measures for R&D budgeting, using tools of -
the Government Performance and Results Act
For FY2004, appropriations were enacted
(GPRA) and the Program Assessment Rating
only for DOD, DHS, and for the Legislative
Tool (PART). Critics say better data and con-
Branch. That funding together with funding
cepts are needed to use performance budgeting
appropriated in the omnibus appropriations
for basic and applied research.
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MOST RECENT DEVELOPMENTS
Except for the Departments of Homeland Security (DHS) and Defense (DOD),
FY2005 R&D appropriations are funded by H.R. 4818, an omnibus bill, signed on
November 20. Pressures on the discretionary budget have increased; final R&D
appropriations totaled about $132.2 billion, about 80% of which was for defense R&D. Non-
defense R&D increased about 2.1%. The largest increases went to R&D in DHS, DOD,
Agriculture (USDA), Commerce (DOC), and Transportation (DOT); smaller increases were
made for R&D in the Department of Energy (DOE) and for the National Aeronautics and
Space Administration (NASA) and the National Institutes of Health (NIH). The National
Science Foundation’s (NSF) budget was cut by about 0.3% from the FY2004 level. R&D
was also reduced from the FY2004 level for the Department of Education (DOEd) and the
Environmental Protection Agency (EPA).
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 important 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 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
.)
FY2003 Budget Action
The President’s R&D request totaled about $112.0 billion, about 8% more than the
appropriated level for FY2002. Similar to the pattern for FY2002, the increases proposed
for DOD R&D, at 11% more than FY2002, and for NIH, at about 16% more, dominated,
leaving all the other R&D funding agencies combined with less money than in FY2002.1
Total defense R&D funding, spurred in part by anti-terrorist priorities, for DOD and DOE’s
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. Congressional
action funded R&D at about $117.0 billion. Although civilian agencies’ budgets were cut
0.65% 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 DOT, which was reduced.
1 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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FY2004 Budget
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, counter-
terrorism spurred increases in DOD R&D, at 7.1% more than FY2003, and in DHS, at about
$1.0 billion, or almost 50% more than FY2003. NIH’s increase was 2.7% more than
FY2003; NSF’s budget request at 2.8% over FY2003 fell short of the 15% envisioned in
2002 legislation authorizing NSF’s budget to double over five years. In DOC, the President
sought to eliminate the Advanced Technology Program (ATP), and the Manufacturing
Extension Partnership (MEP). The budget resolution conference agreement for function 250,
general science space and technology, included an increase of $324.0 million above the
request for NSF research activities and $100.0 million more than requested for DOE science
programs. Separate appropriations were enacted for DOD, DHS, and for the Legislative
Branch, and, together with an omnibus appropriations bill, P.L. 108-199, they increased
R&D funding to about $127.0 billion, or 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 had modest increases or cuts. NSF’s R&D budget increased by 4.7%; and DOE’s
by 6.1%. Reductions were made in R&D at USDA (-4.9%) and at DOT (-8.2%). NIST’s
R&D budget was cut 3.9%, with a 0.9% cut in ATP. See Table 3.
FY2005 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.
Except for the Departments of Homeland Security (DHS) and Defense (DOD), which
were funded via the enactment of appropriations bills, FY2005 R&D appropriations are
being appropriated in H.R. 4818, an omnibus bill, signed on November 20. The President’s
FY2005 R&D request totaled about $131.7 billion, about 4.7% more than the FY2004
appropriated level. Pressures on the discretionary budget have increased; final R&D
appropriations totaled about $132.2 billion, about 80% of which was for defense R&D. Non-
defense R&D increased about 2.1%. The largest increases went to R&D in DHS, DOD,
USDA, DOC, and DOT; smaller increases were made for R&D in the Department of Energy
and for NASA, and NIH. Legislation had been enacted in December 2002 to double NSF’s
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budget over five years (as had been done previously for NIH), but NSF’s budget request at
3.6% over FY2004 fell short of the amount envisioned in the authorizing legislation and for
FY2005, congressional action reduced NSF’s budget was by about 0.3% from the FY2004
level. Congress also appropriated less than the FY2004 level for R&D in the Department of
Education and the Environmental Protection Agency. In DOC, the President sought again
to eliminate the ATP, funded at $171.0 million in FY2004, and would have reduced funding
for MEP about 65%. Congress increased DOC R&D funding for NOAA (+10.7%) and
funded ATP R&D at $110 million, about 23.8% less than in FY2004.
Overall, funding for federal R&D was increased by about 4.8%; with increases in
development funding of 6.5%, applied research of 3.4%, and basic research of 1.5%, with
reductions in basic research funding in NSF, NASA, Interior, and EPA. Funding for
nanotechnology R&D, the Administration’s priority interagency initiative, was requested to
be increased by almost 14% to $982.0 million. Budget resolutions adopted in the House,
H.Con.Res. 393, and the Senate, S.Con.Res. 95, increased defense and homeland security
spending above the President’s request, but limited growth in domestic discretionary
spending to at or below the Administration’s request. The Senate resolution added $1.3
billion for NIH funding. Outyear funding projections for the next five years show reductions,
in terms of constant dollars, in all R&D outside of the priority areas of defense, homeland
security and space. See Table 3.
Counterterrorism Funding
R&D to combat terrorism was requested to be increased from about $1.2 billion in
FY2002 to almost $2.7 billion for FY2003, and $3.2 billion for FY2004. See Table 1.
Comparable figures are not available for the FY2005 request. Unpublished OMB data on
funding for homeland security R&D, which is a subset of counterterrorism, show a 5.4%
increase from the enacted FY2004 level to $3.6 billion requested for FY2005. See Table 2.
The largest FY2005 programs are in NIH largely for bioterrorism R&D and for construction
of containment facilities; DHS’s Science and Technology Directorate; DOD; NSF; and the
Department of Justice. Other programs are in USDA, DOC’s NIST; EPA; DOT; and DOE.
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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
FY2003
FY2004
Agency
Supple-
Supple-
Actual
Actual
Enacted
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].
Table 2. Homeland Security Research and Development Funding, by
Agency, Budget Authority
(dollars in millions)
Agency
2003 Enacted
2003 Supplemental
2004 Enacted
2005 Budget Request
Agriculture
$11.8
— -
$21.8
$50.0
Commerce
16.4
— -
16.5
22.6
Defense
212.0
— -
267.0
340.2
Energy
18.9
— -
19.5
8.0
Health/Human Services
834.2
— -
1643.8
1557.2
Homeland Security
619.2
— -
959.2
1111.4
Justice
160.5
25.2
179.5
194.5
Transportation
3.7
— -
— -
4.1
EPA
52.9
— -
28.8
22.8
NSF
268.5
— -
305.6
315.8
Total, Homeland Security
2198.2
25.2
3441.7
3626.6
R&D
Total, Non-defense
$1986.2
$25.2
$3174.7
$3286.4
Homeland Security R&D
Source: Information Provided by OMB, Jan. 27, 2004. OMB characterized this data as “discretionary budgetary
resources,” which a staff member said was also “budget authority.”
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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 $907.0 million; Congress agreed to raise appropriations
by about 16% to $1050.0 million. The FY2005 DHS R&D request was $ 1,141.0 million;
and the appropriated amount was $1,243.0 million; about 29% of DHS’s R&D will be for
basic and applied research, up 114% since FY2004. For additional details, see CRS Report
RS21270 and CRS Report RL31914; see CRS Report RL32481 and CRS Report RL32482,
on homeland security R&D funding data quality issues.
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 FY2005 R&D
budget request that focuses on defense, homeland security, and health R&D spending and
level funding in most other areas. The benefits of R&D also need to be considered against
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 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.”2
Trends in Federal R&D Support. Given these assessments of the importance of
federal R&D, a key priority-setting issue is how large should the federal R&D budget be in
relation to its functions and the funding provided by such other R&D supporters as industry?
Federal R&D funding, while rising in terms of absolute (or nominal) dollars, is
declining as a part of the national R&D total, which is estimated to have grown overall to
$284.0 billion in FY2003, the latest year for which data are available. In constant 1996
dollars, total national R&D funding increased 44% between the years 1993 and 2003.3
Industrial support for R&D increased 56% and federal government support increased 18%.
OMB historical trend data indicate that R&D funding has declined from about 17% of total
federal discretionary outlays in FY1965 to about 14% today. In part because of economic
pressures and budgetary caps, during the years FY1994 to FY2000, federal R&D funding was
2 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.
3 Based on data in Brandon Shackelford, “U.S. R&D Projected to Have Grown Marginally in 2003,”
NSF InfoBrief, Feb. 2004, NSF 04-307 and NSF, Table 1B, National Patterns of R&D Resources:
2002 Data Update
(current to October 2002).
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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 is reducing discretionary R&D spending.
Industry is the largest supporter and performer of national R&D, funding 63% of total
R&D (the government funds 30%) and conducting 68% 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, which some call the “seed corn” of future scientific and technological development
and economic growth. The federal government funds almost half of all national expenditures
for long-term basic research (largely in universities and federal laboratories), while industry
funds 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 agency 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. Some observers argue that
federal research support 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 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 credits for industrially funded research
in industry and universities and was due to expire on June 30, 2004.8 The Administration
sought to have it made permanent and estimated it would cost about $30.0 billion over the
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 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.
7 NSTC, Implementation of the NSTC Presidential Review Directive-4: Renewing the Federal
Government-University Research Partnership....,
Jan. 2001.
8 See CRS Report RL31181, Research Tax Credit: Policy Issues for the 108th Congress, by G.
Guenther.
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period 2005-2009. On October 4, 2004, President Bush signed into law a measure (H.R.
1308, P.L. 108-311) that included a provision extending the research tax credit through
December 31, 2005. Other legislation was introduced on this topic.
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? Some are concerned that the emphasis on health R&D may presage a scarcity of
knowledge in physical sciences, math, and engineering.9 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 FY1995 to FY2005,
requested, R&D funding at NIH increased 121% in constant dollars compared to DOD,
70%;NSF, 50%; USDA, 23%; DOE, 18%; and NASA, 1%. R&D funding was decreased
in constant dollars for EPA and the Departments of the Interior, Transportation and
Commerce. For FY2005, it is estimated that federally funded health-related R&D, primarily
at NIH, would receive about 50% 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. The doubling is not yet
complete in constant dollar terms; some say that because the FY2005 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
views similar to last year, issued a press release February 11, 2004 in which “Members
question the balance of the Administration’s R&D budget, noting that non-defense, non-
homeland security funding increased by only 2.3 percent. Further, most of that increase is
for development (up to eight percent) while basic research is essentially flat-funded.” 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?”10 Senator
Jeff Bingaman urged the President to develop a science and technology policy “to force the
9 In 2003, the National Science Board released a report assessing shortages in The Science and
Engineering Workforce/Realizing American’s Potential,
NSB-03-69.
10 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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White House to give some thought and examination to the technological opportunities and
revolutions facing us that we are about to miss.”11 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.
Figure 1. Trends in Nondefense R&D by Function, FY1953 to FY2005
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 was 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,
11 “Bingaman: A Revitalized Science and Technology Policy Badly Needed,” Press Release, Feb.
11, 2004, Office of Sen. Bingaman.
12 “PCAST Releases Report on U.S. R&D Investment,” CFR Weekly ‘Wrapup, Feb. 14, 2003.
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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 $160.0 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).
NSF Funding. NSF funds research across all disciplines and is the main federal
source for much nonhealth-related academic research. 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 P.L. 107-
368, the NSF authorization bill for FY2003, authorized increases in 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,” (FY2008) 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 required increased oversight of NSF facilities programs. Congress
appropriated about $4.1 billion for NSF’s FY2004 R&D funding, a 4.7% increase over
FY2003, and about $1.0 billion less than envisioned in the authorization act. P.L. 107-368
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.
14 See Federal Funding for Biomedical and Related Life Sciences Research FY2002.
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required the National Science Board, which governs NSF together with the Director, to
report on how NSF’s increased funding should be used. In a 2003 report, Fulfilling the
Promise: A Report to Congress on the Budgetary and Programmatic Expansion of the
National Science Foundation
, the Board recommended annual NSF funding of $19.0 billion,
and outlined priorities for support. As noted, FY2005 congressional appropriations action
reduced NSF’s budget for R&D by about 0.3% from FY2004.
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 FY2005, includes less than half of total federal R&D spending and some non-R&D
funding, such as education and dissemination of information.15 FS&T funding would
decrease about 0.4% from FY2004 to FY2005. 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. Senator
Jeff Bingaman, in a February 2004 speech called for consideration of a unified federal S&T
budget: “It would be valuable to have joint hearings across the relevant committees in the
Senate on the overall shape of our S&T spending. It might be worth considering whether the
functional nature of the budget itself should be revised to put the entire federal S&T budget
in one place, so that there is much more transparency as to what the real trends are....”16
15 Sec. 6, FY2005 Budget, Analytical Perspectives.
16 “Bingaman: A Revitalized Science and Technology Policy Badly Needed,” op. cit.
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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 FY2005 budget identified agency funding for two interagency R&D
initiatives whose reporting is required by statute, “Networking and Information Technology
R&D,” at $2,008 million, a 1% decrease from FY2004, and “Climate Change Science
Program,” which incorporated the U.S. Global Change Research Program, at $1,958 million,
a 2% decrease from FY2004. A priority interagency Administration initiative is for
nanotechnology, funded at $886 million, a 3.0% increase over FY2004. Other FY2005
interagency R&D initiatives are in combating terrorism and hydrogen. FY2006 initiatives
include those for FY2005 and R&D in physical sciences, biology of complex systems, and
water. Combating terrorism is now called homeland security R&D.17
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.18 The Commission on National Security recommended empowering the
President’s science advisor to establish “functional budgeting,” to identify nondefense R&D
objectives that meet national needs, strengthen the OSTP, NSTC and PCAST, and improve
coordination with OMB to enhance stewardship of national R&D. The congressional science
policy report, Unlocking Our Future, 1998, spearheaded by Representative Vernon Ehlers,
called for more balance in the federal research portfolio and said that while OMB can fulfill
the coordination function in the executive branch, “no such mechanism exists in the
Congress. ...[I]n large, complex technical program, ... committees should ... consider holding
joint hearings and perhaps even writing joint authorization bills” (p. 7).
Legislation 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
17 OMB, “Updated Administration Research and Development Budget Priorities,” Memorandum 04-
23, Aug. 12, 2004.
18 Rebecca Spieler, “AAAS President Concerned About Imbalances in Nation’s R&D Portfolio...,”
Washington Fax, Feb. 21, 2001.
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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.19 The OTA
is still authorized, but funds would have to be appropriated for it. The pros and cons of
reviving OTA or re-creating a similar body have been examined since its termination.
During the 107th Congress, H.R. 2148, a bipartisan bill, would have authorized OTA funding
at $20.0 million annually for five years. Since 2002, at congressional direction, the General
Accountability Office (GAO; formerly the General Accounting Office) has conducted two
pilot technology assessments, Technology Assessment: Using Biometrics for Border Security,
GAO-03-174, 2002, and Cybersecurity for Critical Infrastructure Protection, GAO-04-321,
and has begun two others, on port security and on protecting buildings from forest fire.
Current legislative action includes proposals to restore OTA’s funding (H.R. 125); to create
a Science and Technology Assessment Service to conduct assessments for Congress (H.R.
6 as passed in the Senate); to conduct technology assessments in GAO (report language on
H.R. 2657 and on H.R. 4755); and to create a technology assessment capability in GAO (S.
2556) or under its direction (H.R. 4670, which would create a Center for Scientific and
Technical Assessment).
In FY2005 Legislative Branch Appropriations action, Representative Holt offered
H.Amdt. 667 to H.R. 4755, to add $30 million to GAO’s account for a Center for S&T
Assessment; the House rejected the amendment on July 12, 2004. The House Legislative
Branch Appropriations report (H.Rept. 108-577) encouraged GAO to retain its core
capability to conduct technology assessments. S.Rept. 108-307, to accompany S. 2666,
indicates that while the Senate Appropriations Committee supported GAO doing technology
assessments, it did not intend to appropriate specific funding for this purpose and that GAO
should conduct assessments that are supported by both House and Senate leadership and that
address issues of national scope. The report instructed GAO to consult with the committee
regarding definitions and procedures to conduct technology assessment. Issues under debate
have included the need for assessments, funding, utility of GAO’s reports, and options for
institutional arrangements. See also Technology Assessment in Congress: History and
Legislative Options,
CRS Report RS21586.
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
19 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. See also M. Granger Morgan and John M. Peha,
Science and Technology Advice for Congress, Washington, Resources for the Future, 2003, 208-227.
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for instrumentation and facilities renewal, and that it generates economic benefits in targeted
regions since R&D capacity may generate industrial growth. Section 6 of Analytical
Perspectives, FY2005 Budget,
using data from Chronicle of Higher Education, reported that
academic R&D funded at congressional direction for FY2003 totaled $2.012 billion, up 9.5%
over FY2002. According to AAAS, FY2005 R&D earmarks totaled $2.1 billion, mostly for
projects in DOD, DOE, USDA, and NASA in that order.20 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, 2001.21
Government Performance and Results Act (GPRA) and PART
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. Section 6 of OMB’s Analytical
Perspectives, Budget of the U.S. Government, FY2005,
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 and
other measures. PART results for 58 R&D programs were used when making FY2005
budget decisions. 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 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 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
Report RS20257, Government Performance and Results Act: Brief History and
20 AAAS, “R&D Funding Update,” Nov. 29, 2004 [http://www.aaas.org/spp/rd/upd1104.htm].
21 See David Malakoff, “White House Asks Community to Oppose Earmark Projects,” Science,
Sept. 28, 2001, p. 2364.
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Implementation Activities and CRS Report RL32164, Performance Management and
Budgeting in the Federal Government: Brief History and Recent Developments
.)
CRS-14

Table 3. R&D in the Budget, by Agency, Based Largely on AAAS Data
(Budget authority in millions of dollars
%Change, Projected
House
Senate
Final
FY2004, est. to
SELECTED AGENCIES &
FY2000
FY2001
FY2002
FY2003
FY2004
FY2005
Comm. (c)
Comm. (c)
Ap-
FY2009, requested
PROGRAMS
actual
actual
actual
actual
estimate
request
Flr. (f)
Flr. (f)
proved
Current
Constant
$
$
Dept. of Agr. Total
$1776
$2181
$2112
$2334
$2240
$2163
$2375 (c)
$2367(c)
$2414
-3.6%
-11.3%
(Agr. Res. Service)

(1012)
(1234)
(1294)
(1171)
(1191)
(1284) (c)
(1288) (c)
(1313)


(CSREES)

(594)
(532)
(608)
(619)
(512)
(625) (c)
(620) (c)
(643)


(Forest Service)

(245)
(265)
(265)
(316)
(316)
(328) (c)
(325(c)
(322)


Dept. of Commerce Total
1174
1030
1328
1200
1131
1075
946 (f)
1334 (c)
1183
-6.1%
-13.6%
(NOAA)
(643)
(561)
(611)
(666)
(617)
(610)
(545) (f)
(748) (c)
(684)
-2.8%
-10.5%
(NIST)
(471)
(413)
(460)
(491)
(471)
(426)
(369) (f)
(540) (c)
(468)
-10.1%
-17.3%
(ATP) (Within NIST)
(116)
(118)
(150)
(153)
(152)
0
0
(164) (c)
(110)


Dept. of Defense Total
39959
42740
49877
59296
65656
68759
69156
69544
70285
8.6%
0.0%
(S&T (6.1-6.3+ medical))
(8632)
(9365)
(10337)
(11186)
(12558)
(10623)
(13011)
(12480) (13550)
-10.8%
-17.9%
Dept. of Education
238
264
265
282
290
304
259 (c)
(260) (c)
258
3.1%
-5.1%
Dept. of Energy Total
6956
7733
8078
8312
8804
8880
8945 (c) (8880) (c)
8956
7.5%
-1.1%
(Atomic/Defense)/(NNSA+Defense)
(3201)
(3462)
(3855)
(4049)
(4244)
(4333)
(4358) (c)
(4333) (c)
(4293)
14.7%
5.6%
(Energy & Science)
(3755)
(4271)
(4224)
(4263
(4560)
(4547)
(4587) (c)
(4547) (c)
(4663)


Dept. of HHS Total
18182
21045
23696
27411
28469
29361
29299 (c)
29720(c)
29108
3.0%
-5.2%
(NIH)
(17234)
(19807)
(22714)
(26398)
(27220)
(27923)
(27923) (c)
27,923(c) (27771)
2.3%
-5.8%
Dept. of Homeland Security*


266
737
1037
1141
1238 (c)
1216(c)
1243
35.8%
25.0%
Dept. of Interior Total
618
621
641
643
675
648
672f
670 (c)
672
-5.4%
-12.9%
(U.S. Geological Survey)

(566)
(583)
(550)
(547)
(525)
(548)f
(548) (c)
(545)


Dept. of Transportation Total
607
718
778
700
707
755
669(c)
719 (c)
718
6.4%
-2.1%
(FAA)
(220)
(301)
(359)
(271)
(250)
(222)
(226) (c)
(269) (c)
(262)


(FHA)
(261)
(294)
(275)
(291)
(246)
(394)
(319) (c)
(315) (c)
(319)


(NHTSA)
(51)
(58)
(59)
(61)
(58)
(68)
(60) (c)
(61) (c)
(62)


Dept. of Veterans Affairs
645
719
756
819
820
770
770 (c)
820 (c)
813
-7.8%
-15.1%
CRS-15

%Change, Projected
House
Senate
Final
FY2004, est. to
SELECTED AGENCIES &
FY2000
FY2001
FY2002
FY2003
FY2004
FY2005
Comm. (c)
Comm. (c)
Ap-
FY2009, requested
PROGRAMS
actual
actual
actual
actual
estimate
request
Flr. (f)
Flr. (f)
proved
Current
Constant
$
$
Environmental Protection Agency
558
574
592
567
616
572
589 (c)
604 (c)
598
-7.6%
-15.0%
NASA Total
9494
9887
10224
10681
10909
11334
10235 (c)
10465(c)
11132
32.4%
21.9%
(Space Flight)
(3014)
(2901)
(2461)
(3613)
(3136)
(4135)
(2686) (c)
(3100)(c)
(4038)


(Science, Aeronautics, Tech.)
(6481)
(7024)
(7840)
(7386)
(7883)
(7199)
(7549) (c)
(7866) (c)
(7094)


National Science Foundation
2931
3320
3525
3926
4077
4226
4038(c)
4195(c)
4063
3.5%
-4.7%
All other R&D
630
702
912
391
745
730
745 (c)
934 (c)
756
-3.2%
-10.9%
TOTAL
83769
91534
102899
117439
126176
130717
131206(c) 132885(c)
132200
8.7%
0.0%
NonDefense 40609
45332
49167
54552
55989
57218
56101
57816
57224
8.1%
-0.5%
NonDefense Minus NIH
23374
25525
26453
28243
28770
29295
28178
29530
29453


Defense
43160
46202
53731
62887
70187
73499
75105
75070
74976
9.2%
0.5%
Source: Based largely on American Association for the Advancement of Science, with tables appearing at [http://www.aaas.org/spp/rd/] AAAS,”Research Holds, Development Gains
in 2005 Budget, AAAS Preliminary Analysis of R&D in the FY2005 Budget,” Feb. 5, 2004, and “FY2004 Federal R&D Climbs to Record High of $127 Billion; Defense and Homeland
Security Up, Other Programs Share in Modest Gains,” and other updates, including “AAAS R&D Funding Update,” Nov. 29, 2004. 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. Projected
data in the last 2 columns are from AAAS, “Bush Proposes to cut Nondefense R&D Over the Next Five Years to Reduce Deficit,” Apr. 22, 2004, revised May 7, 2004. The data in
the last two columns are AAAS analyses of defense and nondefense R&D, based on detailed budget account projections accompanying the Budget of the United States Government,
FY2005.
See also CRS Issue Brief IB10129: Federal Research and Development Funding.
*FY2002 data for comparison purposes only. DHS was to begin operations in FY2003. DHS figures include programs to be transferred from other agencies.
The FY2004 and FY2005 figures were revised downward by AAAS to reflect that TSA R&D figures were revised since the Feb. release of the budget.
The final FY2005 figures include adjustments to reflect across-the-board reductions in the FY2005 omnibus bill.
CRS-16