The Federal R&D Budget 2005: Details, Numbers and Views

by Christian Neumann

In a repeat of past budgets, the FY 2005 budget proposes record funding for federal R&D due to large increases in defense and homeland security R&D; however, with tight constraints on other discretionary spending, most federal R&D programs would see flat funding or cuts, and even favored R&D agencies of past years would see increases barely above the expected rate of inflation of 1.3 percent.


{access view=guest}Access to the full article is free, but requires you to register. Registration is simple and quick - all we need is your name and a valid e-mail address. We appreciate your interest in bridges.{/access} {access view=!guest} As required by law, President Bush submitted to Congress his proposed Federal budget for the next fiscal year by the first Monday in February. Through the budget process, the President and Congress decide how much to spend and tax in any one fiscal year. Congress still clings to a budget process created in 1974.  This process provides no workable tools to limit spending, no restrictions on passing massive costs on to future generations, and no incentive to bring all parties to the table early in the budget process to set a framework. The president's FY 2005 budget contains several proposed changes to the congressional rules governing the process by which federal budget policy is legislated. These rules could have dramatic consequences for spending and tax policy over the next 5 years. While, admittedly, changes in the budget process are not the most exciting of issues, "the proposed process changes would likely cause large drops in domestic investments and a continuation of current tax policy and massive federal deficits", some analysts of OMB said.

Congress first passes a budget resolution, which is a framework within which the Members will make their decisions about spending and taxes. The resolution includes targets for total spending, total revenues, and the surplus or deficit, and allocations within the spending target for the two types of spending - discretionary and mandatory.
The federal budget for FY 2005 will not be finalized until the annual appropriations bills are passed by the House and Senate in identical form and then signed by the President.

Bleak House - Bleaker Senate
William B. Bonvillian, Legislative Director and Chief Counsel of Senator I. Liebermann, said at an S&T Seminar at the George Washington University (GWU) that budget resolutions will freeze the discretionary spending at '04 levels and the budget process disciplines are already gone. That means that PAYGO effectively ended.

The budget deficit, projected to be record-breaking, is expected to hit $521 billion this year, which is about 4.5 percent of the nation's gross domestic product (GDP). The total proposed R&D funding next year is $131.9 billion, about 4.7 percent more than this year's level, with a majority of the increase going to the Department of Defense (DOD) for the development of new weapons and the barely one year old Department of Homeland Security (DHS). Members of both parties in the House Science Committee expressed concern about the President's fiscal 2005 research and development budget, questioning whether it adequately addresses the nation's science and technology needs.

 House Science Committee Chairman Rep. Sherwood Boehlert (R-N.Y.) said that it is impossible to seriously view this budget as a good budget for science, and Rep. Bart Gordon (D-Tenn.) expressed his disappointment by saying that it is inadequate in light of the challenges that the U.S. is facing. Others criticized the federal budget, calling it insufficient in financing the sort of new research that could stimulate economic growth and halt the flow of high-technology jobs overseas. Funds for research not related to defense or DHS would increase by only 2.3 percent.
 Among multi-agency initiatives, Nanotechnology R&D would be the top priority in the federal R&D portfolio in FY 2005. After increasing more than $100 million last year, funding for the National Nanotechnology Initiative would climb another $118 million (or 13.7 percent) to $982 million, a doubling of the federal investment in just four years.

Some more details:
The President's budget as a whole clearly demonstrates the continuing priority placed on Homeland Security in requesting new government-wide discretionary resources for FY 2005 of $30 billion. This is an increase of 9.7 percent above the comparable FY 2004 resource level. "It's the big winner," Kei Koizumi, Director of the R&D Budget and Policy Program of AAAS, said at an S&T Seminar at the GWU. Total new resources for FY 2005 account for $40.2 billion. Major parts are the Coast Guard (20%), Federal Emergency Management Agency (18%), U.S. Customs & Border Protection (15%), and the Transportation Security Administration (13%).

The National Science Foundation (NSF) would increase the average grant size to $142,000 per year in FY 2005, from $139,000 in FY 2004. The proposed upturn falls well short of the doubling path specified in the NSF Authorization Act of 2002. Due to the limited increase in funds for the research, authorities expect to make awards to less than one in four applications this and next year. Of the $167 million in new funding, 45 percent would be devoted to a management initiative that would provide more staff for NSF and improve the security of its computer systems. Mathematics and physical science research would get only a 2% increase, to $1.1 billion. NSF participation in the Nanoscale Science and Engineering Initiative, however, would buck the trend with a 20 percent increase to $305 million.

NIH is set for a 3% increase for next year, evenly divided among the various institutes, to $26.5 billion. This slim rise, following a similar increase for 2004, has NIH supporters worried about maintaining the programs the agency began during the five-year doubling process that ended in fiscal 2003. The total number of Research Project Grants (RPGs) would barely increase by 1.4 percent; the size of the average new grant would actually fall in 2005 (

NASA's budget for fiscal year 2005 is proposed to increase by 5.6 percent to $16.2 billion. President Bush wants to spend most of $12 billion prescribed for sending astronauts to the moon and Mars in the next five years by redirecting $11 billion from other NASA programs (see also President Bush's Space Plans in this volume).

Some agencies' budgets will be cut under the new proposal. Among these are a decrease of 14% in Department of Commerce R&D to just $832 million. The Bush Administration once again proposes to eliminate the Advanced Technology Program (ATP), a $171 million program in the DOC. Further decreases: a 12% cut for research at EPA to $725 million, whereas the EPA's STAR research grants and fellowship programs would receive more drastic cuts of about 30%; a 9% cut for R&D at USDA to $1.9 billion; and a reduction of about 2% to $5.4 billion in S&T programs at the Department of Energy. For a 'Capitol Hill Perspective on the Federal R&D Budget' read Johannes Loschnigg's contribution in the OpEd section of the current edition of bridges.

President Bush, "President Bush's FY2005 Budget", White House, Feb 2004
Office of Management and Budget (OMB), "The Budget Documents" , Feb 2004
National Council for Science and the Environment (NCSE), "President's FY 2005 Request", Feb 2004
National Science Foundation (NSF), "National Science Foundation FY 2005 Budget Request to Congress", Feb 2004
National Institute of Health (NIH), "Summary of the FY2005 President's Budget", Feb 2004
Department of Homeland Security (DHS), "DHS Budget in Brief - Fiscal Year 2005", Feb 2004
National Aeronautics and Space Administration (NASA) , "NASA's Budget and Planning Documents", Feb 2004
Department of Defense (DOD) , "Defense Budget Materials FY 2005 Budget", Feb 2004
The American Association for the Advancement of Science (AAAS) , "AAAS R&D Budget and Policy Program", Feb 2004
Boehlert, "Congressman Sherwood Boehlert (R-NY) Opening Statement For FY 05 Budget Hearing", House Committee on Science, Feb 2004{/access}