Federal R&D Budget: The Proposal for Fiscal Year 2006

by Renate Riedl

Approximately one-third of all funding for U.S. research and development comes from the federal budget. The remaining amounts come mostly from various American industries. The federal portion is the main source for most of the basic research performed in the U.S. This basic research is considered to be the driving force for knowledge and innovation. Furthermore, federal money is the main support for research at universities and colleges. The estimated 2005 federal budget for R&D in the U.S. was set at $132.2 billion. The President's request for FY 2006 is $132.3 billion. This is about 5.1% of the overall federal R&D budget in 2006. The small increase over FY 2005 does not even cover the estimated inflation rate of 2%. For the first time in 15 years, the R&D budget is declining in real terms.


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How the R&D Budget Comes to Life

Each year in February the U.S. President prepares and submits his proposal for the Federal budget to the U.S. Congress. The new fiscal year begins on October 1st. By that date, both chambers of Congress, the Senate and the House of Representatives, must pass bills in agreement, called appropriation bills. Nearly the entire research and development budget portfolio in the U.S. is included in these annual bills.

 

There is no Department of Science and no designated research and development budget in the U.S. Over 20 main agencies and departments in the country decide about focuses for research within their institutions. Afterwards, they cooperate with the Office of Management and Budget (OMB) as well as the Office of Science and Technology Policy (OSTP) for the budget proposal. Both offices work as advisors to the President. For the National Aeronautics and Space Administration (NASA), National Science Foundation (NSF), National Institutes of Health (NIH), and other agencies, research and development is the core activity.

 

Although there was a restructuring of the appropriation committees in both chambers to improve the budget-making process at the beginning of this year, the process is expected to take longer and be more time-consuming than in the past. The lack of coordination between the numerous committees, as well as the lack of harmonized perspectives, makes the legislation more complicated than ever.

The Situation at Hand: How Funding Is Divvied Up between the Main Agencies
Getting a larger increase than other agencies, NASA's $11.5 billion R&D budget favors the International Space Station and the Mars mission. NASA has a new leader, Michael Griffin, as of April of this year. In his Confirmation Hearing in front of the Senate Commerce Committee, he demonstrated optimism in his speech that he could carry out President Bush's ambitious vision for space exploration. With the given budget and the clear but costly commitment to go back to the moon and explore Mars, other traditional fields in the science program of NASA have to take a back seat. Although receiving more money then ever before, NASA cannot maintain its broad base. Environmental, physical, and other earth sciences will have to face heavy losses.

According to the President's proposal, the National Institutes of Health (NIH) could get $28.7 billion, with $27.9 billion for R&D. The NIH gets half of the non-defense federal R&D budget in the U.S. Between 1998 and 2003 the budget was doubled from $13 to $27 billion. Since the end of this doubling process, budget increases have remained flat. The NIH is the main institution for medical research in the U.S. Most of the proposed budget goes to the Research Project Grants (extramural research), with over 37,000 grants per year. Many of these grants are for projects that last several years, but the budget is made on an annual basis. This leaves an element of uncertainty in long-term planning. The development of the NIH might not be as promising as expected without continuous substantial support. The extraordinary boost of the last years is unlikely to continue.

As an independent federal agency, the National Science Foundation (NSF) is one of the most important sources for fundamental federal research and education. It is supposed to receive $5.6 billion, with $4.2 billion earmarked specifically for NSF R&D. A doubling program, similar to the one for NIH, never became effective. Due to the generally tough economic situation and an emphasis on homeland and defense research, support of the NSF remains essentially unchanged. The NSF expects to award 6,130 grants in 2006, only slightly more than in the preceding years. Additionally, for the second consecutive year, education programs will suffer severe cuts.

 

In a repeat of last year, the R&D budget of the Department of Energy (DOE) would have to face cuts as well. The budget proposal for 2006 is $8.4 billion. After getting $8.6 billion in 2005, the expected cut for next year continues the downward trend of the past. The Department plays a key role in supporting physical sciences. Almost all programs at the DOE would have to deal with limited budgets, and some programs would be cancelled entirely. In contrast to the cuts in almost all other programs, a prominent winner would be the International Thermonuclear Experimental Reactor (ITER), a controversial international experiment on fusion power.

 

With $71 billion, the Department of Defense (DOD) is expected to get more than half of the whole R&D budget. In contrast to the last five years, the budget increase would clearly be smaller. The end of the official war in Iraq changed the heavy support of defense expenses. Both basic and applied research would also be cut back.

Although getting less than in the past years, the Department of Homeland Security (DHS) R&D budget would grow to $1.3 billion in 2006. After receiving an increase of almost $200 million each year since 2003, the increase would be only $44 million for FY 2006. Balancing the small growth of funding for some programs, other programs would have to face substantial cuts. The emphasis in the last years was on homeland and defense research. Non-defense research could profit from civilian applications of results in defense research, and therefore alleviate the effects of heavy cuts in non-defense, non-homeland security research.

Future Outlook
With a growing budget deficit, it is more than likely that the federal R&D Budget will stay flat or suffer further cuts in the next few years. There are concerns from several sides as to whether the U.S. can maintain its world leadership in research, development, and technology in the future. Sherwood Boehlert, Chairman of the House Committee of Science, said in his Opening Statement for the Budget Hearing: "The budget proposal before us raises serious questions about our nation's direction in the coming years."


Renate Riedl joined the Office of Science & Technology as a Junior Visiting Expert from April to June 2005.

Sources
- President Bush's Proposal FY 2006, White House, Feb 2005
http://www.whitehouse.gov/infocus/budget/2006/toc.html
- Office of Science and Technology Policy, Feb 2005
http://www.ostp.gov/html/budget06.html
- Office of Management and Budget,
http://www.whitehouse.gov/omb/
- The American Association for the Advancement of Science (AAAS),
http://www.aaas.org/spp/rd/
- Sherwood L. Boehlert, February 2005,
http://www.house.gov/science/press/speeches.htm
- Michael Griffin, April 2005
http://www.nasa.gov/audience/formedia/speeches/index.html
- National Aeronautics and Space Administration Budget Documents (NASA),
http://www.nasa.gov/about/budget/index.html
- National Science Foundation Budget Request FY 2006 (NSF),
http://www.nsf.gov/about/budget/fy2006/
- National Institutes of Health, Office of Financial Management (NIH),
http://ofm.od.nih.gov/
- Department of Defense Budget Material (DOD),
http://www.dod.mil/comptroller/defbudget/fy2006/index.html
- Department of Energy Press Releases on Budget 2006 (DOE),
www.doe.gov
- Department of Homeland Security (DHS),
http://www.dhs.gov/dhspublic/index.jsp{/access}