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IB94009: Research and Development: Genevieve J. Knezo Resources, Science, and Industry Division October 13, 2000 CONTENTS
SUMMARY For FY2001, the President, proposing to raise budget caps that have been circumvented in the last few years and emphasizing the contribution of research to economic growth, proposes a 3% increase over FY2000 for R&D funding, to $85.3 billion, with a 6% increase in civilian R&D. The largest percentage increase for an R&D agency would go to NSF (17.3%) to balance funding and give more support to nonbiomedical research fields. Projections in the President's budget are flat in terms of constant dollars for non-defense R&D and -14% for defense R&D in the outyears. The Congressional budget resolution, agreed to on April 13, sets limits on discretionary funding in the outyears, so that AAAS projects a decline of 7.8% for nondefense R&D in inflation-adjusted spending by 2005. So far, the FY2001 appropriations process in the House would increase defense R&D, fund NIH as requested, but would fund almost all other nondefense R&D below the requested level. Senate R&D levels are higher. Final congressional action for FY2000 R&D, at about $83 billion, was about 5% over FY1999 and 7% over the request, largely for NIH and DOD, then for NSF, DOE and USDA. Without NIH, nondefense R&D funding increased 2.4%, slightly ahead of the expected inflation rate of 2.0%. As it did for FY1999, Congress allowed appropriations for discretionary programs to exceed capped levels by designating up to $14 billion above the caps as emergency spending, mandating a 0.38% across-the-board cut, delaying some spending to FY2001, and using offsets. S. 296, passed in the Senate, and H.R. 3161 would authorize continuing increases and better accountability for R&D. P.L. 105-277 made the Freedom of Information Act applicable to federally funded research. H.R. 88 would prevent the premature release of research results. Congressional action also raised funding above the previous years for FY1996 to FY 1999. Nevertheless, over the period FY1999 to FY1999, only NIH, NSF, and EPA saw significant constant dollar R&D increases, largely for NIH. Special studies and caucuses dealing with science policy were initiated in the House and Senate. The House passed a resolution endorsing the "Ehlers" science policy study. The Administration links R&D to economic growth and seeks partnerships between government and business in research and innovation. The President has emphasized funding for civilian research, NIH, NSF, environmental research and Mission to Plant Earth. Congress's R&D priorities have been motivated by deficit reduction and the beliefs that deregulation and tax incentives could foster market-driven innovation and that basic research and defense R&D were proper governmental functions. The National Science and Technology Council coordinates some R&D budgets with OMB and the Office of Science and Technology Policy. The National Academy of Sciences recommended using an "S&T" budget that excludes funding for DOD and DOE advanced development, testing, and evaluation; to open to the public NIH's priority-setting process; and to coordinate federal R&D funding, designating a lead agency for similar R&D. The Government Performance and Results Act requires R&D programs to specify goals and to use performance measures. MOST RECENT DEVELOPMENTS So far, the FY2001 appropriations process in the House would increase defense R&D, fund NIH as requested, but, because of spending caps lower than the President request, would fund almost all other nondefense R&D below the requested level. Senate R&D funding levels generally are higher. Conference or final action has increased R&D appropriations above House or Senate levels for DOD, DOE, USDA, DOT, and Interior. All but DOT and Interior are above the requested amount. Three continuing resolutions have been signed since the appropriations process has not been finished. BACKGROUND AND ANALYSIS The government has always supported core fields of science, but the focus in federal R&D budgets has alternated in response to policy shifts and Presidential prerogatives. During the 1970s interest focused on space R&D, growth in energy and health research and cutbacks in defense R&D. During the Reagan Administration, support for defense R&D and for basic research became prominent; energy research funding declined. About 48% of the FY1999 federal R&D budget went to civilian R&D, with health consuming the largest portion; defense R&D received about 52% of the R&D budget. In FY1978, non-federal sources, largely industry, started to eclipse the federal government as a source of R&D funding. According to the 1995 Economic Report of the President, and the Council of Economic Advisors' (CEA) October 1995 report, Supporting R&D to Promote Economic Growth: The Federal Government's Role, the estimated social rate of return to R&D averages 50%, which, the CEA says, is significantly higher than returns on other investments. President Clinton seeks to reduce defense and increase civilian research, technology investment and development, basic research, computer networking, and commercialization of R&D (see CRS Report 93-96 SPR, CRS Report 93-357 SPR, and CRS Issue Brief IB10008). Budget-Related R&D Priority-Setting Issues Pressures on the Budget and Recent Budget Action Congress has been limiting increases in discretionary spending, which was projected to decline from 37% of total outlays in FY1999 to about 30% in FY2002. Although a strong economy has led to a budget surplus, as the discretionary portion of the budget declines and spending caps continue, R&D programs increasingly compete with funding for public infrastructure, housing, discretionary social services programs, and transportation. For FY1999 and FY2000, Congress used emergency spending authority to circumvent budget caps and increased federal R&D appropriations. While federal R&D funding has increased historically in constant dollars from a peak in 1968, it decreased from about 11% of total federal outlays in 1966, during the buildup for the space program, to about 4.2% today, and from about 16% of discretionary outlays in 1966 to about 14% today. Federal R&D funding also dropped relative to total national economic performance, from an annual average of 1.7 % of GDP in the 1960s to 0.7% estimated for FY1999. Budget trends for the last 8 years show preferences for large constant dollar increases in NIH and NSF with a 12% constant dollar decrease for DOD R&D. While federal support for R&D has grown slightly in real dollar terms since the 1960s, it has continued to "shrink" as a percentage of total national funding. The National Science Foundation (NSF) projected that total U.S. R&D would rise to about $247 billion in FY1999, due primarily to significant rises in industry-funded R&D, resulting from growth in the economy. Industry-funded R&D was expected to increase to $169.3 billion, or about 69% of total national funding for R&D, in FY1999. The government's share has declined to 27% of the total. The federal share of support first fell below 50% in 1979. Since the government funds basic research which generates much of the knowledge industry uses for innovative R&D, many are concerned that reductions in federal support for research as part of the total will ultimately harm the U.S. ability to advance technologically. The Clinton Administration's attempt to reduce defense R&D and increase civilian technology-oriented funding has altered R&D priorities. For instance, while defense R&D spending has declined in constant dollars by 11.8% since FY1992, civilian R&D spending has increased 13.7%. The Democratic majority in the 103rd Congress reoriented programs to focus more on projects which would generate economic benefits or contribute to "strategic" programs -- to solve a problem or contribute to industrial capability. This was reflected in large increases for technology transfer and development at NIST and for clean car technology and high-performance computing programs. The NSF and the NIH emphasized "strategic," i.e., applications-oriented research, reducing the number of new "undirected" research projects. Congress attached research targeting and performance requirements to some agencies' R&D appropriations. For FY2001, the President, proposing to raise budget caps that have effectively been circumvented in the last few years and emphasizing the contribution of research to economic growth, proposes a 3% increase over FY2000 for R&D funding, to $85.3 billion, with a 6% increase in civilian R&D. Basic research would be increased by 7% and funding for equipment and facilities would increase by 8%. Nonbiomedical research support would be emphasized. FY1996. For FY1996, the Administration's priorities were similar to FY1995, when cuts were made in defense and energy research (the Superconducting Super Collider and nuclear weapons), and funding was increased in applied technology programs in NIST, in NSF (for basic research, facilities and instrumentation), and in NIH. Congressional scrutiny of R&D increased in response to budget pressures, and efforts to de-emphasize the government's role in civilian applications-oriented R&D and to focus more attention on basic research. The Republican-majority 104th Congress reduced federal regulations and programs of civilian technology development, which many Republicans traditionally opposed on the grounds that the private sector, not the government, should make market-related choices and share the risks and rewards. P.L. 104-19 and P.L. 104-6 rescinded an additional $2.43 billion in R&D for FY1999 and FY1995. AAAS calculated, based on the budget resolution (H.Rept. 104-159) that civilian R&D would be cut, in constant dollars, to about 66% of its 1995 level by FY2002. FY1996 appropriations action reduced R&D less than projected (4% below real dollar FY1995 level) and R&D was increased in NIH, in DOD, and DOE for nuclear weapons and ballistic missile defense. Cuts were made in civilian energy R&D, transportation R&D, ATP, and NOAA R&D. FY1997. The President proposed an R&D budget of $72.7 billion, a decrease of about 1.5% in constant dollar terms from FY1996. Using the President's Mid-Session Review of the FY1997 Budget, adjusted for the latest economic data, AAAS estimated that nondefense R&D would be reduced 19% in real dollar terms by 2002. Increases were sought for NSF, NIH, and for the Advanced Technology Program, the Manufacturing Extension Program, environmental R&D, energy efficiency and pollution prevention, the new generation of vehicles partnership, and Mission to Plant Earth. H.Con.Res. 178 recommended reducing nondefense R&D 6% by 1997 and, in real dollars, by 23% by 2002. It cut basic research less than in the Administration's plan but recommended cutting R&D funding below requested levels for NASA, DOE, USDA, Commerce, Transportation, and EPA, mostly for cuts in applied research and technology. Space shuttle operations were to be contracted out; programs for energy supply R&D, fossil energy, conservation and others were to be reduced substantially; NOAA was to refocus on core missions; R&D was to be cut in the Geological Survey, National Biological Services, and Bureau of Mines; agricultural research and extension would be cut; NIST science and technological activities would be increased, but ATP programs eliminated. There was considerable opposition to the proposed reductions from the National Science Board and House Science Committee Democrats. Enacted FY1997 appropriations raised R&D funding 3.7% above the FY1996 level, with increases for DOD and NIH and reductions for R&D in NASA, DOE, Agriculture, Interior, Transportation, Commerce, and Education. The ATP program was not eliminated. See Table 1. Basic research was funded at 8.2% above FY1999, a net gain of 1.9% in real dollars. FY1998. The President's $74 million R&D budget reduced funding in constant dollars by increasing nondefense R&D and basic research and cutting defense R&D. OMB projected that this budget would reduce nondefense R&D funding by 7.3% in real dollars from by FY2002 and defense R&D funding by 18.4%. S. 124, would have doubled funding authorization for nondefense R&D over the next 10 years, specifically doubling NIH's budget; S. 1305 would have doubled the federal S&T budget between 1999 and 2009. Introduction of the bill followed a conference on "A Decade of Investment," attended by more than 100 scientific and engineering societies. Senator Specter announced a commitment to a 7.5% increase in the NIH budget; S.Res. 15, would have doubled NIH funding over the next 5 years. The chairman of the House appropriations subcommittee for NIH proposed to increase NIH funding by 21% in FY1999. The House Science Committee, in "Views and Estimates. for FY1998" recommended a more balanced increase , of 3% above FY1997 for the S&T programs within the committee's jurisdiction. Representative George Brown, ranking Democrat on the Science Committee, testified to the House Budget Committee that funding should be increased for R&D, capital infrastructure, and education and training by $70 billion over the next 5 years, using the $135 billion surplus estimated by CBO. Pressure to increase funding came also from the National Academy of Sciences (NAS) Panel on Federal S&T Analyses http://www.nas.edu/fsrd/fsrd.html; the AAAS in a March 24, 1997 analysis; and the presidents of four scientific societies, at a March 4 press conference, who recommended a 7% increase in funding. In contrast, a CATO Institute meeting in early February 1997 discussed The Economic Laws of Scientific Research, by Terence Kealey, which disputed a link between government support of S&T and economic growth and endorsed a smaller governmental role in R&D. About $468 million worth of R&D rescissions were included in a supplemental appropriations bill for FY1997, with reductions for DOD R&D and a NASA wind tunnel. A healthy economy and increased tax receipts led to forecasts of budget surpluses and elimination of deficits in 1998. For FY1998 R&D appropriations raised federal R&D funding 4.2% above the FY1997 level and 1.8% above the President's request. All major R&D agencies except DOT and USDA received increases ahead of the expected 2.5% inflation rate, including: DOD, 2.8%; USDA, 0.6%; DOE, 3.1%; NSF, 6.1%; EPA, 14.2%; and NASA, 5.3%. See Table 1. The Research and Experimentation Tax Credit was extended retroactively and to June 30, 1998 in P.L. 105-34. FY1999. The President sought $78 billion for R&D, 2.6% more than for FY1998, including an increase of 5.8% for non-defense R&D and a decrease of .3% for defense R&D (AAAS data). Priority was for R&D in NIH, NSF, and DOE (for greenhouse gas emissions reduction technology and for DOE defense R&D). Reductions were proposed for R&D at DOD, with increases in basic and applied research; NASA; NOAA, EPA, and DOT; and for most agencies' support for R&D facilities, except for DOE's Spallation Neutron Source. Basic research was to be increased by about 7.7% overall. AAAS said, "the programs slated for increases show the priority the Administration is placing on fundamental science, biomedical research, energy research in support of reducing U.S. greenhouse gas emissions, industrial technology, and science in support of a Comprehensive Test Ban treaty...." (AAAS Preliminary Analysis of R&D in the FY1999 Budget, March 5, 1998, p. 5). $27.1 billion of the nondefense R&D budget would have been funded from discretionary funds. The rest (about $4 billion) "essentially representing all of the requested increases for nondefense R&D in NIH, NSF, DOE and other key agencies, would come from new offsetting revenues outside the cap," (AAAS Preliminary Analysis of R&D in the FY1999 Budget, p. 2) funded by a special "Research Fund for America," which excluded the Space Station and other programs. About $3.6 billion of this would have been funded from a proposed controversial tobacco settlement, that Congress did not approve (S. 1415). The FY1999 request was about 2% less than FY1999 in real dollars. The House Science Committee in its Views and Estimates for FY1999 proposed sustained increases at or above requested levels. The Science Committee's criteria included long-term, high-risk, well-managed R&D; agency-relevant research, with accountable managers; exclusion of "marketing and commercialization" projects; full leveraging of international, industry, and state science partnerships; and prioritizing of infrastructure necessary for program requirements (Science Committee Calls for Increase in Research Funding, press release, March 20, 1998). Both President Clinton (at MIT) and House Speaker Gingrich described the importance of R&D to the economy and pledged to seek additional R&D funding. (The Reappropriator. Washington Post, June 18, 1998, A23; and AIP FYI #91 and #96.) OMB Director Franklin Raines called for scientists to give more attention to priority-setting, measuring performance, and avoiding earmarks in order to increase federal support of R&D (Science, June 12, 1998, p. 1671). The Senate budget resolution called for cuts in nondefense research to 2003, but expressed non-binding language to support increased funding at NIH and for basic research. The House budget resolution (H.Con.Res. 284) endorsed increasing NIH funding by about 10% for 5 years, but would have forced reductions in other civilian R&D budgets. For FY1999, Congress enacted five separate appropriations bills and P.L. 105-277, an omnibus appropriations act. Congress approved $80.2 billion for R&D, about 3.1% above the presidential request and 5.3% more than FY1998. All major R&D agencies except NASA received increases above the expected 2.0% rate of inflation. Congress increased funding by using some of the $70 billion federal surplus and by allocating $21 billion in emergency "off-budget" spending, freeing up funding for some programs which would have been restricted by budget caps. Many of the President's R&D policies were endorsed. Basic research funding was increased 11.3% over FY1998. The largest R&D appropriations increase went to NIH, at 15% over FY1998. DOE's R&D appropriation was 11.4% higher than FY1998 with increases in solar and renewables, fossil energy and energy conservation, and basic energy. Total defense R&D (DOD and DOE) increased 3.5%; NASA's R&D budget was cut by 1.6%, cutting funds for the International Space Station but increasing funds for space sciences and life and microgravity sciences and applications. NSF's R&D increased 8.4%; increases were made for NIST laboratories, the Advanced Technology programs and NOAA; USDA's budget was increased 6.6%; the U.S. Geological Survey's biological research was increased; in EPA, R&D appropriations were 3% more than in FY1998 with an increase in funding for particulate matter research. S. 1305, which would have doubled R&D funding within 10 years, was not supported by the academic community or by some appropriations committee members on the grounds that it would cut non-defense R&D by more than $3.5 billion between 1999 and 2003 and because it disproportionately favored NIH (Washington Fax, April 22, 1998). P.L. 105-277 extended the research and experimentation tax credit for one year retroactively to July 1998, allowed full funding of $335 million without incorporation into a block grant for the Eisenhower Professional Development Program to improve training for teachers in math and science, and, in a move which generated controversy, extended the Freedom of Information Act to extramural grants. In the House, Representative Ehlers had been tasked by the leadership in 1997 to head a special study on science policy. Following a series of hearings, Unlocking Our Future was released on September 24, 1998. On October 8, 1998, the House passed H.Res. 578, declaring "it is the sense of the House...that...[the report] should serve as a framework for future deliberations on congressional science policy and funding." The academic community has praised the report and some say that since it endorses various kinds of federal support for R&D, it is a surprising document; others have criticized it for not supporting the social sciences, for not addressing all major issues critical to future applications of science, and for not proposing major changes in funding patterns or mechanisms. It has generated consi-derable discussion about future policies for U.S. science support. ("Congress Ratifies Ehlers Science Policy Report," Washington Fax, October 15, 1998; "Seeing the Ehlers Report as a Republican R&D Manifesto, Rather Than a National Science Policy, Is Not a Bad Thing...," Washington Fax, October 21, 1998; and Richard E. Scolve, "For U.S. Science Policy, It's Time for a Reality Check, Chronicle of Higher Education, October 23, 1998, B4-B5.) The AAAS endorsed specific follow-up in its Science and Technology for the Nation: Issues and Priorities for the 106th Congress: Views...on "Unlocking Our Future...,"December 16, 1998. FY2000 R&D Budget. (For details on specific agency budgets, see Table 1 and CRS Issue Brief IB10018.). The request included an increase of 2.9%, which was above the inflationary level of 2%, for nondefense R&D, making it 51% of the R&D budget. Defense R&D was to decline 5.3% from FY1999 due to cuts in weapons development and applied research. Only DOD basic research, the 6.1 category, was proposed to increase, by about $6 million more than in FY1999. The Administration sought a $336 million Information Technology for the 21st Century initiative, with long-term fundamental research funding increases in NSF, DOE and DOD, representing a 28% increase in the current level of funding for information technology. H.R. 2086 a House Science Committee bill, passed in 2000, would increase funding over the next 5 years for information technology. The President sought an increase of 8.6% for DOE's R&D in renewable energy technology and energy conservation; general science in NSF and DOE would increase by 6.5%; transportation R&D was proposed to be increased 11.6%. Basic research would increase 4.2% over FY1999, continuing the pattern of recent increases. NSF's R&D budget would be increased 7.8%; DOE's nondefense R&D budget would increase 6.4%. NIH's budget was proposed to increase by 2.0%. The President sought to increase NASA's R&D to $9.8 billion, primarily for the International Space station, up 7.7%. Commerce's R&D budget included an 18% increase for the NIST Advanced Technology program and would have provided $283 million to NOAA for research related to climate change and associated subjects. The Administration proposed a "21st Century Research Fund," to highlight important R&D programs. House action on R&D funding generally was below requested levels; Senate action proposed to give less money to defense and fund R&D at higher levels. Final congressional action funded FY2000 R&D at about $83 billion, increasing R&D funding by about 5% over FY1999 and 7% over the President's request. The largest increases were in NIH and DOD, followed by NSF, DOE and USDA. Excluding NIH, R&D funding for nondefense R&D increased 2.4%, only slightly ahead of the expected inflation rate of 2.0%. (See table 1.) Because of the large projected budget surplus ($123 billion), there was pressure to circumvent caps in the appropriations process, as was done last year. While "sticking" to mandatory budget caps, Congress allowed appropriations for discretionary programs to exceed capped levels by designating up to $14 billion above the caps as emergency spending, mandating a 0.38% across the board cut, delaying some spending to FY2001, and using offsets. The increases for R&D exceeded those proposed by the President for NIH, NASA, DOD S&T, defense R&D, and basic research. R&D funding was less than the President has proposed for NSF, DOE, and USDA and for the information technology programs. Despite these increases, over the period FY1999 to FY2000, only NIH, NSF, EPA, and the Commerce Department have seen significant constant dollar increases in their R&D budgets, with the focus largely on biomedical research and NIH. DOD's S&T funding decreased about 11%. (See the figure.) For the long-term, the President's budget showed all agencies' R&D budgets' declining in real dollar terms between FY2000 and FY2004, with the largest declines in NIH. The House Science Committee's criticism appeared in its "Analysis and Review" of the FY2000 R&D budget, at http://www.house.gov/science/welcome.htm. Its bipartisan FY2000 Views and Estimates Report endorsed a 3%+ increase for R&D programs under its jurisdiction. Criticism continued about the emphasis given to biomedical research and the need to rebalance the federal R&D funding portfolio to support lagging fields of science (Stephen A. Merrill and Michael McGeary, "Balancing the Federal Research Portfolio: Who's Deciding and Why?" Science, August 11, 1999). The President's chief of staff, John Podesta, criticized the proposed congressional reductions in R&D funding in a speech at the National Press Club on September 1, 1999. H.R. 1180, enacted as P.L. 106-170, the Work Incentives Improvement Act, contained a 5-year extension of the research and experimentation tax credit for industry. (See CRS Issue Brief IB92039.) S. 296, the Federal Research Investment Act, (H.R. 3121 in the House, the successor to S. 2217, 105th Congress, passed the Senate on July 26, 1999. Senator Bill Frist was the principal sponsor. The bill would have doubled R&D funding within 11 years, at a 2.5% annual increase above the rate of inflation for all fields of science in major agencies. It also mandated a separate detailed budget presentation on R&D; addressed better accountability, effectiveness and efficiency in federal R&D funding; required an NAS study and OMB guidance on performance measures for research; and established a process to terminate unsuccessful research programs. The "Shelby amendment" to P.L. 105-277, the Omnibus appropriations act for FY1999, allowed Freedom of Information Act (FOIA) provisions to apply to scientific research data produced in performing R&D supported by government grants. Some scientists object to the law as threatening to academic freedom and confidentiality of the research process. OMB's revision to Circular A-110, issued on September 30, 1999 appears to interpret the amendment's language narrowly, limiting FOIA access to limited types of research used in federal agency actions that have the force and effect of law, an interpretation that might be challenged in court. Hearings were held on July 15, 1999, by the Subcommittee on Management, Information and Technology of the House Committee on Government Reform on H.R. 88, a bill to repeal the amendment. (See CRS Report RL30376.) FY2001 R&D Budget. The President's proposes to raise budget caps, permitting a 5.2% increase in total discretionary spending and balance funding among agencies and fields, to increase the federal R&D budget 3% over FY2000 to $85.3 billion, with the largest increases for nondefense R&D, at 6.2% over FY2000; defense R&D would be reduced by about 0.2%. In constant dollars, federal support for life sciences research, especially in NIH, has more than tripled since 1970, while funding for other fields of science has remained about constant. The FY2001 budget proposes larger increases for R&D programs in non-life sciences disciplines than for life sciences research. R&D increases, in descending order, are proposed for DOT, 25%; NSF, 19%; DOE, 8%, Commerce Dept., 7%; NIH, 6%; and EPA, 5%. The NSF would receive the largest budget increase of any R&D agency, 17.3% over FY2000, in part to provide NSF resources to functions as the lead agency for interagency initiatives in nanotechnoloy, information technology, and biocomplexity research. (See table 1 for details.) Projections for the President's budget show that between FY 2000-FY2005, nondefense R&D would increase by 14.2% (3% in constant dollars) and defense R&D would decrease by 4.7% (-14% in constant dollars). Funding emphasis would go to programs in the Administration's 21st Century Research Fund, whose R&D programs would receive the largest increases, focusing on NIH and NSF. The FY2001 congressional budget resolution, approved April 13, does not include specific details for federal support of R&D, but it develops targets for budget functions and appropriations that support R&D. AAAS projects that the resolution would permit increases in nondefense R&D in FY2001, but would not allow discretionary spending to keep up with inflation after FY2005, thus cutting R&D 7.8% in inflation-adjusted dollars by 2005. R&D would be reduced in real dollars in all agencies, except for NSF and DOT. Because the plan proposes tax cuts and would not allow use of the Social Security surplus, levels would be lower than those projected in the President's budget. Defense R&D is projected to decline 13.7% in inflation-adjusted dollars by 2005. So far, the FY2001 House appropriations process would increase defense R&D, fund NIH slightly more than requested, but, because of spending caps lower than the President's request, would fund almost all other nondefense R&D below the requested level. Senate appropriations action so far increases R&D above the President's request and for most agencies above House levels for DOD R&D, NIH (+15% over the request), DOE, USDA and DOT. Senate approved levels would keep below the President's request funding for R&D in Commerce and NSF. Conference or final action has increased R&D funding above House and Senate levels for DOD, DOE, USDA, DOT, and interior. All but DOT and Interior are above the requested amount. Congressional appropriations action is not yet finished and three continuing resolutions have been signed. Several efforts were made to increase support for federal R&D. The House Science Committee in its Views and Estimates...for Fiscal Year 2001, complained that "...outyear budgets are either flat or actually decline. The President's budget fails to meet the stable and sustainable funding criteria needed for science and technology programs in the outyears" (p.2). Reportedly, Rep. Vern Ehlers is seeking support from colleagues "... to sign a letter to the chairman and senior Democratic member of the House Appropriations Committee," urging that high priority be given to basic scientific research in the FY 2001 appropriations process ((302b) allocations) (The American Institute of Physics Bulletin of Science Policy News, no. 33, March 23, 2000). The chairman and ranking minority member of the Senate VA, HUD, Independent Agencies Appropriations Subcommittee, Senators Christopher Bond and Barbara Mikulski, reportedly are seeking signatures on a "Dear Colleague" letter to be sent to the Senate leadership seeking to double the NSF budget over five years to keep pace with the NIH increases. The President's Committee of Advisors on Science and Technology released a report, Wellspring of Prosperity, Science and Technology in the U.S. Economy, How Investments in Discovery Are Making Our Lives Better, Spring 2000. An OSTP report endeavors to demonstrate the economic benefits of federal R&D investments on States: Discovery and Innovation: Federal Research and Development activities in the Fifty States...., 2000. 650 pp. The Frist/Rockefeller bill, the Federal Research Investment Act, which passee the Senate in 1999, was enacted in the Senate again on September 22, 2000 as an amendment to the Next Generation Internet Act, S. 2046. It authorizes increases in civilian R&D funding at set amounts, with the goal of investing 10% of the discretionary budget in civilian R&D by 2011. It would amend the Government Performance and Results Act, by including special provisions relating to measuring research performance and accountability. It is unlikely to progress in the House, since House Science Committee chairman James Sensenbrenner opposes it on the grounds that it would weaken the authorizations process. Megaprojects like the space station require long-term, large capital investments or long-term funding commitments for individual researchers working toward a research goal, such as the Human Genome project. They may necessitate building new large facilities or instruments, which require large operating funds, thereby "mortgaging the future" of federal R&D funding. Usually the scientific objective of a big science project cannot be achieved by using another research approach. Critics say that as funding for "big" science increases, researchers become more conservative and take fewer risks, and creative science diminishes. Funding for Megaprojects decreased and the composition of Megaprojects priorities has changed considerably since FY1992, with decreases for defense, and some slight increases for civilian Megaprojects, despite the cancellation of the Superconducting Super Collider and scaling back of the space station. Overall, cutbacks are due to perceived waste resulting from failures, budgetary pressures, lack of foreign contributions, and pressures from other fields of science. The dollars saved may not go to support R&D. The OECD science ministers, in September 1995, adopted a U.S.-initiated proposal to establish a formal body to promote cooperation and guide priority selection for Megaprojects. Congressional Earmarking of Specific R&D Projects It was expected that enactment of legislation to give the President a line-item veto would reduce the practice of earmarking if the earmarks were specified as line-items in relevant enactments (P.L. 104-130). Subsequently, the Supreme Court struck down the line-item veto. There has been considerable controversy about congressional designation of specific R&D projects (appropriating funds for a specific performer to conduct a specific project, without competitive peer review, without the agency having included the project in its budget request, or designating awards for certain types of performers or in certain geographic locations). OMB director Jack Lew expressed concern about earmarks affecting NSF and NASA and other accounts that never before were subject to earmarking (Speech before National Press Club, discussed in American Institute of Physics Bulletin of Science Policy News, no. 79, July 5, 2000.) President Clinton's chief of staff said in a speech on September 1, 1999, that Congress earmarked about $1 billion for R&D for FY2000. The Chronicle of Higher Education (July 28, 2000), reported that FY2000 congressional earmarks for universities, largely for research, totaled $1.044 billion, an increase of 31% over FY1999, continuing the upward trend begun for FY1997 after 3 years of decline following the peak of $763 million in FY1993. The OSTP reported that for FY1993 Congress had earmarked about $1,712 million for R&D and research facilities (71% more than for FY1992), including $442 million for universities (22% more than for FY1992). Many earmarks establish new centers or institutions, implying long-time federal support. Some believe earmarking helps to develop R&D capability in institutions that do not normally compete well, that it compensates for reduced federal programs for instrumentation and facilities renewal, and that it generates economic benefits because R&D capacity generates industrial growth. Critics believe that earmarking undermines the authorization process and distorts agency R&D priorities. In the past, authorization bills proposed to limit the dollar amount that could be spent on earmarked capital projects and to subject all grants to competitive review. President Clinton proposed rescinding earmarked appropriations in agriculture and the Clinton-Gore technology policy document, Technology for America's Economic Growth, February 1993, and pledged that the Administration would "work closely with Congress to prevent 'earmarking' of funds for science and technology." Two non-binding changes were made in Democratic Caucus rules and a new House rule was adopted to help authorizing committees prevent appropriating committees from designating specific projects. ("Brown Sees Gains in His Battle Against Academic Earmarks," Congressional Quarterly, December 4, 1993, 3307-3310.) The Final Report of the House Members of the Joint Committee on the Organization of Congress, December 1993, recommended that committee reports list all earmarked funds below the appropriations account level. (H.Rept. 103-413, vol 1, p. 11.) Aspects of earmarking and indirect costs were scrutinized in a GAO report, Department of Transportation: University Research Activities Need Greater Oversight, RCED-94-175, May 1994. Sec. 7203 of P.L. 103-355, the Federal Acquisition Streamlining Act of 1994, is intended to encourage merit-based selection procedures and to discourage earmarks. The law does not direct that these provisions apply to report language, where many earmarks appear. Current Priority-Setting Activities Recommendations to Coordinate R&D Priority-Setting There is no unified mechanism to determine an explicit R&D budget or to evaluate the total government research portfolio in terms of progress toward meeting national objectives. In December 1997, the National Science Board released a report, "Government Funding of Scientific Research," calling for mandatory priority setting and coordination of federal R&D. Separate House and Senate science policy efforts were described above under the FY1999 budget section. In 1998, House Speaker Gingrich asked Representative Nethercutt to examine how the government sets priorities for science funding with a focus on biomedical research (COSSA Washington Update, June 29, 1998, 6). The Institute of Medicine produced Scientific Opportunities and Public Needs: Improving Priority Setting and Public Input at the National Institutes of Health, 1998. NIH held public meetings on priority-setting, in response to the report. The 1999 NAS COSEPUP report, Evaluating Federal Research Programs, recommended better coordination and designation of a lead agency for similar R&D conducted by different federal agencies. A series of 1997 NAS reports, Preparing for the 21st Century, identified priorities for support to maintain U.S. research strength, social and environmental quality, and economic growth. The NAS report, Allocating Federal Funds for Science and Technology, 1995, recommended considering the R&D budget as a unified whole before consideration by separate congressional committees and that it be reconstituted from an R&D budget to a science and technology (S&T) budget to connote the function of creating new knowledge, excluding development activities. Objections to this concept were raised by the American Physical Society at hearings held by the House Science Committee in February 1996. S.Amdt. 2235 (Bingaman and Lieberman) to the Senate Budget Resolution (S.Con.Res. 86) for FY1999 endorsed the views of the 1995 Academy Report, and expressed the sense of the Senate that for fiscal years 2000 to 2004, all federal civilian S&T program spending should be classified under budget function 250, and that for FY2000, the President should classify these programs, which cross all federal civilian departments and agencies, in function 250. The resolution passed the Senate on April 2, 1998. Previously, the OTA had reported that R&D support criteria should be explicit, in order to evaluate R&D projects against such national goals as national prestige, political needs, scientific merit, education, building regional capacity, geographic distribution, and training. (Federally Funded Research: Decisions for a Decade, 1991.) A presidential report, Science in the National Interest, 1994, blurred distinctions between basic and applied research and proposed actions to meet five broad goals for U.S. world leadership in S&T. National R&D investment, it said, should be increased to 3% of GDP. The President's priorities appear in Science and Technology Shaping the 21st Century, Report to Congress, 1997, and in a 1995 white paper, "Technology and Economic Growth: Producing Real Results for the American People," which stresses applied R&D. A 1996 report by the Council on Competitiveness, "Endless Frontier, Limited Resources," recommended new partnerships between governmental and non-governmental sectors to keep U.S. R&D vital. See also: Committee for Economic Development, America's Basic Research: Prosperity Through Discovery, 1998. In 1997, the White House and the National Governors Association established a mechanism to coordinate federal and state technology efforts. Priorities for Critical Technologies P.L. 101-189 and P.L. 100-456 require the Department of Defense (DOD) and the Office of Science and Technology Policy (OSTP) to identify priorities for critical dual-use technologies for national security and economic prosperity. The fourth, and most recent report, New Forces at Work: Industry Views Critical Technologies, 1998, said the most often cited technologies were: software, microelectronics and telecommunications technologies, new materials, and sensor and imaging technologies, as well as finding enough skilled people to work in these areas. Government Performance and Results Act of 1993 The Government Performance and Results Act, P.L. 103-62, requires agencies to define long-term goals, set specific annual performance targets, and report annually on performance. Legislative language noted the difficulty of quantitatively measuring some program outputs and allows alternatives. The NSTC Committee on Fundamental Science in Assessing Fundamental Science, July 1996 and the Research Roundtable developed guidance for R&D performance measures, and GAO produced Measuring Performance: Strengths and Limitations of Research Indicators, RCED-97-91. The National Research Council recommended that federal agencies use performance measures for research, Evaluating Federal Research Programs: Research and the Government Performance and Results Act, Feb. 1999, and issued "benchmarking" reports comparing the status of U.S. science to other countries for mathematics, materials science and engineering, and immunology. Federal agencies submitted strategic plans to Congress in September 1997 and delivered annual performance plans with FY1999 budget justifications. A House Majority Leader report rated the FY1999 plans. The House Committee on Government Reform and Oversight and the Senate Committee on Governmental Affairs held hearings on implementation. The House Science Committee held hearings in 1996 and 1997 on implementation in the science agencies and in 1997 announced this as an oversight target. Several committees asked agencies to link FY1999 and FY2000 budget requests to goals expressed in their strategic and performance plans. (See CRS Report RS20257.) S. 2046 requires that the NAS study performance measures for research, including quantitative measures for administrative aspects of R&D, that OMB issue appropriate "alternative" methods for analyses of non-quantitative goals based on the study recommendations and set in motion a process to terminate "unsuccessful" federal research programs. The Senate FY1999 VA/HUD appropriations report called on NSF to identify quantifiable goals for research. The appropriations act, P.L. 105-276 , gave OSTP and OMB authority to seek the NAS study, as in S. 2217, 105th Congress, (predecessor to S, 2046, 106th Congress). The agencies' first performance reports, for FY1999, were due March 31, 2000. National Science and Technology Council (NSTC) Executive Order 12881 established NSTC with cabinet-level status to recommend R&D budgets to accomplish national objectives and advise OMB on agency R&D budgets. In a 1997 report, Science and Technology and the President: A Report to the Next Administration, the Carnegie Commission recommended "fine-tuning" NSTC to concentrate "its resources on a small number of priority policy issues of concern to the President and reduce...its emphasis on detailed R&D program development and coordination." NSTC's committees prepare cross-cutting budget initiatives. FY2001 initiatives include the National Nanotechnology Initiative, Biobased Products and Bioenergy; Information Technology R&D; Climate Change Technology; U.S. Global Change Research; Partnership for a New Generation of Vehicles; Integrated Science for Ecosystem Challenges; Fundamental Health Research; Weapons of Mass Destruction Preparedness and Critical Infrastructure Protection R&D; and Education Technology and the Interagency Education Research Initiative. NSTC said it established performance measures for these areas. |
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