98011: Research and Development Funding: Fiscal Year 1999

Michael E. Davey
Coordinator Science, Technology and Medicine Division

Updated November 16, 1998

CONTENTS

SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Department of Agriculture (USDA)
Department of Energy (DOE)
Department of Defense (DOD)

National Aeronautics and Space Administration

National Institutes of Health (NIH)

 

The National Science Foundation (NSF)
Department of Commerce (DOC)

National Oceanic and Atmospheric Administration (NOAA)
National Institute of Standards and Technology

Department of the Interior (DOI)
Department of Transportation (DOT)
Environmental Protection Agency (EPA)

SUMMARY

The Administration requested $78.159 billion for research and development (R&D) in FY1999, a 2.6% increase over FY1998. As with past proposals, the Administration requested a large increase for civilian R&D, 5.8% to $37.823 billion, while overall defense R&D would decline slightly to $40.336 billion. Funding for basic and applied research would increase 8% ($16.966 billion) and 5% ($16,401 billion), respectively. In FY1999 defense R&D comprises 52% of all federal funds. However, projections of Administration outyear R&D funding figures indicate that by FY2000, civilian R&D funding will exceed defense R&D funding for the first time in 25 years.

Given the limited growth in discretionary budget caps Congress approved last year, the President's proposed increase in R&D(mostly paid through the proposed tobacco settlement) was met with great skepticism. However, after protracted negotiations, Congress and the President reach a budget agreement that included significant increases in discretionary budget caps.

With the approval of the omnibus appropriations act (P.L. 105-277), CRS estimates that Congress appropriated $79.2 billion for R&D for FY1999, an increase of 4% over FY1998. Of that total, defense R&D (DOD and DOE's defense programs) is estimated to have increased to $40.8 billion, $500 million above FY1998.

Funding for civilian R&D will exceed the President's proposal, increasing to an estimated record high of $38.4 billion. This is a 7.4% increase over FY1998. In real terms, civilian R&D is about 8% above FY1994 levels. OMB estimates that funding for basic research will grow to $17.5 billion, an increase of 11% over FY1998 estimated levels.

NIH, with slightly less that a $2 billion increase in funding ($15.6 billion), accounted for 75% of the growth in civilian R&D in FY1999. This 14.6% increase puts NIH on a path to double its budget within 5 years, as some Members of Congress have called for.

Most agencies received increases that were either above the President's request, or higher than FY1998 funding levels. For example, NSF received less funding than requested by the President but still grew 8.4% above FY1998 levels. Two notable exceptions to this were NASA and NIST. NASA's R&D budget declined 1.4%, while NIST's budget dropped 3.9% below FY1998 levels.

Many in the scientific community and Congress have called for funding increases in civilian R&D across a broad spectrum of scientific disciplines, rather than concentrating funding increases in one particular area of science. In an effort to foster this objective, the Senate passed the Federal Research Investment Act (S. 2217), which calls for doubling funding in 14 civilian R&D agencies, (including NIH) over the next 12 years. However, this bill would likely slow down the growth of health related research which has grown from 25% to over 40% of total civilian R&D funding since FY1980. The House did not pass its companion bill to S. 2217.

As part of the omnibus appropriations act Congress extended the R&E Tax Credit to June 30, 1999.

MOST RECENT DEVELOPMENTS

On February 2, 1998, President Clinton unveiled his proposed FY1999 R&D budget, requesting $78.159 billion, a 2.6% increase over FY1998. The President requested a record 5.8% increase for civilian R&D to $37.823 billion and $40.336 billion for defense R&D. However, the President is proposing to use revenues from the tobacco settlement to fund his record requested increase for civilian R&D, even though the prospects for such a settlement appear cloudy at best. On October 8, the House passed H.Res. 588, stating that, among other things, the report, entitled ,Unlocking Our Future: Toward A New National Science Policy should serve as framework for future deliberation on science policy issues. The study was led and written by Representative Ehlers. On October 21, Congress approved H.R. 4328, Making Omnibus Consolidated and Emergency Supplemental Appropriations for Fiscal Year 1999 (P.L. 105-277).

BACKGROUND AND ANALYSIS

Department of Agriculture (USDA)

FY1999 funding for research and education in the U.S. Department of Agriculture (USDA) is contained in the FY1999 omnibus appropriations act (P.L. 105-277, "Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999,"). The FY1999 appropriation for research, education and economics in USDA is $1,930 million, $99.4 million above the Administration's request, and $57.7 million above the FY1998 estimate. (see Table 1). The omnibus legislation provided an additional $7 million for research for USDA above the vetoed conference agreement on H.R. 4101, Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations for FY1999. The additional funding was targeted for the President's Food Safety Initiative. Research activities in the FY1999 appropriation include the promotion of food safety and nutrition, protection of the competitiveness of U.S. agricultural and forestry products, improvement in the economic opportunities of farmers, and the facilitation and adoption of environmentally responsible production practices.

The USDA conducts in-house basic and applied research. The ARS is the lead federal agency for nutrition research, operating five major laboratories focused primarily on this type of research. Other ARS laboratories focus on efficient food and fiber production, preservation of genetic resources, development of new products and uses for agricultural commodities, development of effective biocontrols for pest management, and support of USDA regulatory and technical assistance programs. The ARS has 103 research laboratories throughout the United States and abroad. The FY1999 appropriation provides $786 million for ARS, $9.2 million above the request and $41.4 million above the FY1998 level. There are plans to redirect support from several existing programs to fund higher priority research. Those high priority areas include the South Florida Ecosystem Restoration Initiative and the Emerging Infectious Diseases Initiative. The majority of the facilities in the ARS, constructed prior to 1960, have become functionally obsolete. The FY1999 appropriation for ARS provides an additional $56.4 million for buildings and facilities. Funding is intended to modernize eight priority ARS laboratories and bring them up to current health and safety standards.

The Cooperative State Research, Education, and Extension Service (CSREES) distributes funds to universities and organizations that conduct agricultural research. Funding is distributed to the states through competitive awards, formula funding, and other means. The FY1999 CSREES appropriation is $919.2 million, $83.3 million above the FY1999 request and $60.2 million above the FY1998 estimate. As in the previous year, no support was provided for buildings and facilities in CSREES. Support in FY1999 for formula distribution to the state agricultural experiment stations (and other eligible institutions) through the Hatch Act is $180.5 million, an increase of $11.8 million from the FY1998 estimate. Funding for the 1890 institutions (historically black colleges and universities) through the Evans-Allen formula is $29.7 million, a slight increase over the FY1998 level. Certain special grants and construction projects, which target local concerns, are to receive decreased support. The National Research Initiative (NRI) Competitive Grants Program has been funded at $119.3 million in FY1999, a reduction of $6.8 million from the FY1998 estimate. The FY1999 appropriation for extension programs is $434.1 million, $15.4 million above the request and $10.7 million above the FY1998 estimate.

The FY1999 appropriation for the National Agricultural Statistics Service (NASS) is $104 million, $3.2 million below the Administration's request and $14 million below the FY1998 estimate. Effective October 1996, the NASS assumed total responsibility for conducting the Census of Agriculture, previously done by the Census Bureau of the Department of Commerce. The reduction in FY1999 from the previous year results primarily from the cyclical funding needs of the census. The FY1999 appropriation includes support for two special studies that follow the 1997 Census of Agriculture. The Economic Research Service (ERS) is the principal intramural social science research agency in USDA. The ERS, funded at $65.8 million in FY1999, will support an initiative to more accurately assess the cost of foodborne illnesses and support more informed decision making policies related to food safety.

Table 1. U.S. Department of Agriculture FY1997-FY1999
($ millions)

a. Higher education includes payments to 1994 institutions and 1890 Capacity Building grants program.

b. Tabular data may not add due to rounding.

c. Program totals may reflect set-asides (non-add) or contingencies.

Department of Energy (DOE)

For FY1999, the Department of Energy requested $7.78 billion for civilian and defense R&D (see Table 2), 11.4% above the FY1998 appropriation. The Senate-passed Energy and Water Development Appropriations Bill, 1999 (S. 2138/S.Rept. 105-206) appropriated $3.35 billion for civilian R&D and $3.26 billion defense R&D in DOE. The House-passed version (H.R. 4060/H.Rept. 105-581), approved $3.21 billion for DOE civilian R&D and $3.28 billion for DOE defense R&D. The final bill (P.L. 105-245/H.Rept. 105-749) provides $3.28 billion for civilian R&d and $3.32 billion for defense R&D. In the Interior and Related Agencies bill, the House (H.R. 4193/H.Rept. 105-609) approved $902.3 million for Fossil Energy and Conservation R&D while the Senate Appropriations Committee (S. 2237/S.Rept. 105-227) recommended $889.8 million. The final mark for these two programs, from the omnibus appropriations bill (P.L. 105-277/H.Rept. 105-825), is $913.8 million, 8.7% below the request but 11.6% above FY1998.

For Renewable Energy, the final bill provides an increase over FY1998 but well below the request. Both the House and Senate expressed concern about the choice of projects included in the Climate Change Technology Initiative (CCTI) asserting that they tended to be too heavily weighted towards commercializing near-term technologies that were not ready for the market. For conservation R&D, Congress also is providing a substantial increase over FY1998 but below the FY1999 request. Funds for some of the CCTI-related work were restored in conference, and a $60 million supplemental was added to renewable energy for climate change research. The conferees, however, directed DOE not to use any funds that would implement provisions of the Kyoto accord prior to its ratification by the Senate.

The final bill approved $12.5 million for DOE to complete its obligations to the International Thermonuclear Experimental Reactor (ITER) project. Both the House and Senate expressed disapproval of DOE continuing in the project, and the conferees agreed to provide closeout costs. They also instructed DOE not to sign any extension of the project without written approval from Congress. The final bill provides a $1.7 million increase over the request but a small decrease from FY1998. The Senate and House both urged DOE to undertake an overall review of all fusion candidates -- magnetic and inertial -- before it commits to any new international magnetic fusion facility.

The final bill provides $130 million to begin construction of the spallation neutron source (SNS), $27 million below the request. The SNS is a large research user facility being constructed at Oak Ridge National Lab and is projected to cost $1.3 billion. The bill provides the remaining request for the Basic Energy Sciences program. The Senate had approved full funding the SNS project citing its importance for basic research. The House funded the SNS at $100 million, $57 million below the request. It also noted the value of the SNS and cited budget constraints as the reason for not funding the full request.

The final appropriations bill provides $2.148 billion for the Stockpile Stewardship program (SSP), somewhat less than the 17% increase requested by DOE above FY1998. The SSP is designed to supply the scientific expertise and facilities to substitute for nuclear testing in maintaining the safety and reliability of the nation's nuclear weapon stockpile. Concerns about the program range from whether it is adequately funded to arguments that the concept is too complex, too costly, and not needed. The same amount was approved by Congress in the Strom Thurmond National Defense Authorization Act for FY1999 (H.R. 3616/H.Rept. 105-736). All of the congressional actions directed DOE to fund some of its program with previous year unspent appropriations. Such an action could be difficult for DOE to absorb. In both bills, the Congress expressed concern with the rate at which the computer simulation (Accelerated Strategic Computer Initiative (ASCI)) portion of the SSP was growing. Most of the $25 million reduction from the request is directed at the ASCI program. The report with the defense authorization bill noted that DOE had not justified the large increase it requested for that program for FY1999.

Table 2. DOE Business Lines -- R&D Budgets
($ millions)

^a For FY1998, Congress approved a rescission of $101 million. For FY1999, DOE requested a rescission of $40 million. The House, Senate, and Conferees agreed to that request.

^b For FY1999, an additional $47.9 million for solar and renewable energy research was approved from funds in the Basic Energy Science program. In the omnibus appropriations bill, $60 million was added.

^c The total is to be reduced by a general reduction of $19.2 million imposed by the conferees.

^d Includes $6.45 million for program management assigned to general Science program management.

Department of Defense (DOD)

The Administration requested $36.1 billion for FY1999 Department of Defense (DOD) Research, Development, Test, and Evaluation (RDT&E), detailed in Table 3. The request would have reduced defense RDT&E by $580 million below the FY1998 total obligational authority ($36.7 billion). The Administration's Fiscal Year Defense Plan (FYDP) calls for continued reductions in RDT&E. In real terms, planned RDT&E spending in FY2003 would be about $31 billion (in FY1997 dollars), or about $5.5 billion below FY1997's total obligational funding.

Conferees reported the authorization bill on September 22 (H.Rept. 105-736) and the appropriations bill on September 23 (H.Rept. 105-746). Congress authorized $36.0 billion for RDT&E ($70 million below the request), but appropriated $36.8 billion (about $680 million above the request). However, it took $95.7 million of the appropriations back due to better than expected performance on inflation. This does not include the $1 billion added for ballistic missile defense in the emergency supplemental part of the omnibus appropriations bill, most of which will end up in the RDT&E part of the program. The total appropriation for RDT&E may be even higher since the supplemental provides the Secretary of Defense with transfer authority to redirect other supplemental funds to RDT&E programs.

The Administration requested $7.2 billion for Science and Technology (S&T) programs, i.e., the first three budget activities in the lower half of Table 3. S&T, including basic research, fared well in both conferences. Basic research received appropriations nearly what the President requested. Also, in its authorization bill, the House approved an amendment on the floor that sets a goal for the Services of devoting at least 10% of their total RDT&E budget to S&T programs. The Senate also approved an amendment on the floor that expressed the sense of Congress that S&T funding should increase 2% above inflation through the fiscal year 2008. The conferees incorporated the Senate's 2% per annum increase language, dropping the House 10% goal, but added other House language related to giving S&T appropriate priority and devoting sufficient funds to new areas of technology.

The Administration requested $3.2 billion for BMD RDT&E in FY1999, $100 million less than what Congress appropriated last year. The focus of the program continues to be theater missile defense. The Theater High Altitude Area Defense system (THAAD) request is $822 million in Demonstration and Validation and Engineering and Manufacturing Development funding. The Navy Theater-Wide program request is $190 million. The Administration requested $950 million for a National Missile Defense system (NMD). This is about double what the Administration has requested in the past, but comparable to what Congress has appropriated and what the Quadrennial Defense Review (QDR) recommended last year.

THAAD suffered its fifth consecutive test failure in May and as a result Congress is reducing the program's budget, with most of the reduction coming out of Engineering and Manufacturing Development and that part of Demonstration and Validation that would purchase an User Operational Evaluation System. As a hedge, Congress is recommending additional funds for the Navy Theater Wide program. In conference, BMD received $3.62 billion for RDT&E. No funds were provided for THAAD Engineering and Manufacturing Development and funding for Demonstration and Validation was reduced $52 million, but the conferees expressed support for continued development. The conferees appropriated an extra $148 million for the Navy Theater Wide program. Congress then added an additional $1 billion for BMD to spend as needed.

The two Houses appeared headed to a disagreement regarding the space-based laser (SBL) for BMD. Both the Senate authorization and appropriations bill would increase SBL by $94 million. The House voted to reduce the program request by $20 million in its authorization bill and by $10 million in its appropriations bill. Conferees added $74 million to the program.

Table 3. Department of Defense RDT&E
($ millions)

Source: DOD Budget for Fiscal Years 1999. RDT&E Programs (R-1). February 1998

a. Includes only BMD RDT&E. Does not include procurement and military construction.

b. Includes funds for Developmental and Operational Test and Evaluation

c. Number does not add up due to rounding. Also does not include $95.7 million reduction due to better than expected economic performance. Nor does it include the $1 billion added to BMD in the emergency supplemental section of the omnibus appropriations bill.

d. Does not include the $95.7 million reduction due to better economic performance, the reductions related to advisory assistance and other general reductions, nor the $1 billion in supplemental emergency funding for BMD.