A Capitol Hill Perspective on the Federal R&D Budget for 2005

by Johannes Loschnigg

Federal funding for science and technology (S&T) research and development (R&D) is vital for our nation's economic growth and national security. It is through these investments in our nation's future that we ensure our ability to remain competitive in an increasingly globalized economy. Recently the Administration released their federal budget for fiscal year 2005. Although the budget proposes large increases in R&D for defense and homeland security, these increases hide the fact that funding for basic S&T research will, in fact, remain flat or actually decrease. Large federal budget deficits are projected for the next several years, resulting in tight constraints on discretionary spending. This will mean that most federal R&D programs would have difficulty even maintaining current funding levels. Few programs would see their budgets increase above the current inflation rate of 1.3 percent. Although the request for total federal R&D in FY05 is $5.9 billion or 4.7 percent more than FY04 (for a total of $131.9 billion), most of the increase would go to Department of Defense (DOD) development programs and R&D in the new Department of Homeland Security (DHS), leaving many other federal R&D programs collectively with flat or declining funding.

{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} In recent years, the increase in funding for Defense R&D has principally been for the development of weapons systems. These increases have come at the expense of the DOD S&T investments for basic and applied research and technology development. The S&T programs in DOD comprise many initiatives that provide key federal contributions to the support of physical sciences, engineering and other research fields. For FY05, basic research programs in DOD are reduced by 4.5 percent from FY04 levels, while applied research would fall 13.5 percent. Defense S&T, which includes areas such as medical research and technology development, would fall an even steeper 15.5 percent to $10.6 billion. Reductions in funding for these key areas would have a detrimental effect on the development of breakthrough technologies, and could have impacts for both national security and the economy.

For homeland security, the majority of DHS R&D would occur within the Directorate of Science and Technology (S&T). The Directorate will have an R&D budget of $987 million in FY05, which will include funding for the Homeland Security Advanced Research Projects Agency (HSARPA). The legislation authorizing the establishment of HSARPA within the S&T Directorate intended this entity to be similar in purpose, powers, and organization to the Defense Advanced Research Projects Agency (DARPA) within DOD. DARPA's success has been grounded in its independent role, which has enabled it to recruit outstanding scientific and technical talent, to promote creativity and adaptability under a lean, flexible organizational structure, to use highly flexible contracting authority, and to entice collaboration from other R&D entities by leveraging a large independent source of funds. Adequate funding for HSARPA, and maintaining its independent, flexible role, is essential for the development of technologies necessary for making our nation safer.

side from Homeland Security R&D and Defense weapons development, the prospects for the remaining federal R&D programs are much less promising. Total funding for basic and applied research in the federal budget would increase only 0.6 percent (to $55.3 billion) in FY05, even including the expanded research efforts at DHS. In fact, excluding the National Institutes of Health (NIH), funding levels for basic and applied research would actually decrease by 1.2 percent from FY04. And despite the signing of the National Science Foundation (NSF) authorization bill in December 2002, which called for the doubling of its budget over a five year period, the FY05 request for NSF is $5.7 billion, an increase of only 3.0 percent - similar to the last two years, but leaving NSF well short of the $7.4 billion outlined in the authorization bill.

unding for basic and applied research in many other programs would either remain flat (for instance, non-defense R&D at the Department of Energy) or decline (NASA R&D reduced by 3.4 percent, NOAA R&D reduced by 3.3 percent). In particular, two important R&D programs within the Department of Commerce have been slated for either cancellation or drastic reductions. The Advanced Technology Program (ATP) will receive no funding for FY05, while the Manufacturing Extension Partnership (MEP) will be kept at the FY04 level of $39 million, despite widespread bipartisan Hill support for funding MEP at the FY03 level of $106 million. Both of these programs at Commerce are excellent vehicles for supporting small and medium-sized businesses that bring new ideas to market and adopt new technologies that allow companies to stay competitive, and their elimination or reduction would have a detrimental effect on the economy.

Fortunately, funding for nanotechnology would be a top priority in the federal R&D portfolio among multi-agency initiatives in FY05. The 21st Century Nanotechnology Research and development Act, a bill that Senator Lieberman originally cosponsored with Senators Wyden and Allen, and which was signed into law in 2003, authorized funding for the National Nanotechnology Initiative to increase substantially through 2008. For FY05, the funding for nanotechnology would increase $118 million (or 13.7 percent) to $982 million, for a doubling of the federal investment in just four years. The emerging field of nanotechnology constitutes an opportunity for the U.S. to claim global leadership in a new frontier in science and technology, one that has the potential to develop broad prospective applications in many different areas, from medicine to electronics to energy. It is important to adequately fund this key area of research so as to set the stage for U.S. economic growth over the next century,

Given the substantial economic and national security benefits that funding for basic and applied R&D provides, allowing budgetary levels to decrease in so many areas could be considered a risk for our nation's long-term prosperity. Providing adequate funding for federal R&D programs should be considered an investment in our nation's future.{/access}