03.11

Federal S&T Budget at a Crossroads

By IEEE-USA Staff

When a bi-partisan Congress passed the America COMPETES Act in 2007 and reauthorized it in 2010 with White House support, federal science and technology programs were poised for a period of steady funding growth to help stimulate the economy and help drive U.S. innovation and competitiveness for the future.  But with pressure building to bring the spiraling federal budget deficit under control and a change in political leadership of the U.S. House of Representatives, Federal R&D spending has become a prime target for congressional budget-cutters.

The United States government does not have a 2011 budget, but is currently operating under continuing resolutions that extend the 2010 budget.  Congress is working on a final budget resolution that would carry the government to the beginning of the Fiscal Year (FY) 2012 budget on 1 October 2011.  At the same time, President Obama has presented Congress with his budget request for FY 2012.

After a marathon overnight session, the House of Representatives approved an FY 2011 federal budget resolution in the pre-dawn hours of Sunday, 19 February, which would cut over $100 billion from federal discretionary spending, including significant S&T program cuts and terminations.

As drafted, the 2011 budget resolution (H.R. 1) reduces federal R&D investments by $5.4 billion or 3.6% over 2010 funding levels.  The bill would provide $6.1 billion (4.3%) less than what the President had requested for Fiscal Year (FY) 2011.  Defense-related R&D was slated for a $1.26 Billion or 1.6% cut.  Health and medical research was tabbed for a $1.88 Billion or 6% reduction. Another $1.4 billion in cuts to applied research programs at the Department of Energy were targeted.

Among the specific S&T departments and programs ear-marked for budget cuts from approved FY 2010 funding levels were:

• DOE Energy Efficiency/Renewable Energy Research (-$786.3M)

• DOE Electricity Delivery/Reliability Research (Smart Grid) (-$35.4M)

• DOE Nuclear Energy R&D (-$131.8M)

• DOE Fossil Energy R&D (-$116.4M)

• DOE Advanced Research Projects Agency - Energy (ARPA-E) (termination)

• NASA (-$303M)

• NIST Standards and Measurements-related Research Services (-$45.5M)

• NIST Industrial Technology Services (Technology Innovation Program) (-$25M)

• NIST facilities/construction (-$89M)

• NSF research activities (-$150M)

• NSF research equipment and facilities construction (-62.5M)

• NSF education programs (-147M)

• Homeland Security S&T/R&D Programs (-$86.4M)

Under the House budget bill, overall Defense research, development, test and evaluation (RDT&E) funding would decline 1.2% or $969 million from FY 2010. A number of Defense Department R&D programs were also targeted for termination, including the Army’s Non-Line-of-Sight Launch System and Manned Ground Vehicle programs, the Air Forces’ National Polar-orbiting Operational Environmental Satellite System and F-35 fighter engine development.

The proposed cuts to non-defense R&D programs are even more dramatic when compared to the proposed funding levels for these programs in the President’s FY 2011 budget request. The White House had proposed an FY 2011 non-defense R&D budget of $65.8 billion.  The House resolution provides $58.3 billion, a reduction of $4.3 billion or 6.7%.

The House passed H.R. 1 by a party-line vote of 235-189.  Several amendments targeting even deeper S&T cuts, as well as attempts to save the ARPA-E energy R&D program, were defeated in the marathon legislative session.  The bill now moves to the Senate, where Senate Democrats are not as inclined toward deep S&T cuts as their House Republican counterparts.

The current budget resolution expires in mid-March, setting a hard deadline for the House and Senate to either resolve their differences on H.R. 1 or agree to buy time with another short term budget extension.  Political pressure on both parties is intense and budget brinksmanship is anticipated, including threats of a possible government shutdown.

The President’s FY2012 Budget Proposal

As the House worked to complete an FY 2011 budget resolution, President Obama presented Congress with his  FY 2012 budget proposal on 14 February.    Readers should note that the proposed funding increases are based on the FY 2010 enacted levels, since there is no 2011 budget in place.  Therefore, the increases reflect proposed growth in funding over two years, instead of the normal one year projection.

The overall Budget request proposed $147.9 billion in federal research and development (R&D), an increase of a half percent or $772M over FY 2010.  Non-defense R&D would increase $4.1 billion or 6.5 percent.

The budget request would also encourage private sector investment by expanding and simplifying the Research and Experimentation Tax Credit and by making it permanent.

In addition to R&D spending, the budget would also provide $3.4 billion for science, technology, engineering and math (STEM) educational investments, including $100M to prepare 100,000 new STEM teachers over decade.  This is down from the FY 2010 STEM education budget of $3.68 billion.

In 17 Feb. testimony before the House Science, Space and Technology Committee, White House Office of Science and Technology Policy Director John Holdren described the President's overall S&T priorities, noting that “at a difficult time in America’s history, the President’s 2012 Budget proposes to invest intelligently in innovation, education, and infrastructure today to generate the industries, jobs, and environmental and national security benefits of tomorrow.”

S&T highlights for specific federal department and agency budgets are summarized below:

Department of Energy

The Department of Energy’s $29.5 billion FY 2012 budget request would include:

• $5.41 billion for the Office of Science, a 9.1 percent increase over FY 2010

• $2.35 billion for the Office of Energy Efficiency and Renewable Energy
  (EERE), a 5 percent increase over FY 2010

• $1.8 billion for DOE’s Basic Energy Sciences, a 12.1 percent
  increase over FY 2010

• $550 million for the Advanced Research Project Agency – Energy (ARPA-E), a new program that has been operating on $400 million in stimulus funding provided in the American Recovery and Reinvestment Act (ARRA)

Funding for DOE’s Fusion Energy Sciences, including the international ITER fusion experiment, would decline $18 million from FY 2010 to $399M in FY 2012.

The DOE budget request would also decrease funding for the Office of Fossil Energy by 44.5% and the Office of Nuclear Energy by 2.7 percent over FY 2010 levels.

National Aeronautics and Space Administration

The National Aeronautics and Space Administration (NASA) would receive a basically flat budget of $18.7 billion in FY 2012, which would  support all key elements of the NASA program outlined in the 2010 NASA Authorization Act.

Funding would increase for NASA’s Science (up 11.6 percent), Aeronautics (up 12.0 percent), Exploration Systems (up 4.5 percent) and Space Technology (up 79 percent) programs, with offsetting cuts in Space Operations (down $4.35 billion or 29 percent).  $3 Billion is provided for development of a Multi-Purpose Crew Vehicle (MPCV) and Space Launch System (SLS), which would replace the canceled NASA Constellation heavy-lifter program.

National Institute of Biomedical Imaging and Bioengineering

Within the Department of Health and Human Services and its National Institutes of Health (NIH), the budget request for the National Institute of Biomedical Imaging and Bioengineering (NIBIB) would increase by 1.8 percent to approximately $322 million.  NIBIB projects awarding 545 research grants in FY 2012, down by 44 from FY 2010.

Overall NIH funding for medical and health-related research and development would increase 2.3 percent to $31.9 billion.

National Institute for Standards and Technology

President Obama's FY 2012 budget for the Commerce Department's National Institute of Standards and Technology (NIST) proposes a 16.9 percent increase over FY 2010, bringing the total NIST budget to just over $1 Billion.

NIST’s laboratory programs, comprising their Scientific and Technical Research and Services, would increase 31.8 percent to $678.9M.   NIST’s Industrial Technology Services would grow 22.1 percent to $237.6M, including $142.6M for the Hollings Manufacturing Extension Partnerships and $75M for NIST’s Technology Innovation Program.  NIST’s research facilities budget would decrease by 42.4 percent, but allow for completion of major renovations to the NIST Laboratories in Boulder, Colorado.

National Science Foundation

Under the FY 2012 budget request, the National Science Foundation budget would grow by 13 percent to $7.767 Billion.  Within the NSF budget, funding for Research and Related Activities would grow 12.4 percent to $6.25 Billion.  The Engineering Directorate would receive a 22 percent increase, or $908 million (including $146 million in NSF Small Business Innovation Research Funding).  The Computer and Information Science and Engineering Directorate would grow by 17.7 percent to $728.4 million.

Support for scholarships, fellowships, and other educational programs in the Education and Human Resources Directorate would grow by 4.4 percent to $911 million.

$998 million in NSF funding across its various directorates would support Science, Engineering and Education for Sustainability (SEES), a portfolio of clean energy research and education programs.

NSF would also contribute $174 million to support the multi-agency National Nanotechnology Initiative and another $30 million to support a new National Robotics Initiative.

Special And Cross-Cutting Budget Proposals:

• STEM-Related Educational Programs:  The President’s FY 2012 Budget request proposes $3.4 billion in federal investments related to science, technology, engineering, and mathematics (STEM) education, a slight (0.08%) drop from FY 2010.  That funding would support over 100 federal STEM programs administered by a dozen federal agencies, including the Department of Education and the National Science Foundation.  Among the new STEM education initiatives, the budget would allocate $100 million for preparation of STEM teachers, $90 million to establish an Advanced Research Projects Agency within the Department of Education, and $300 million to continue an Investing in Innovation (I3) program, which attempts to scale up effective STEM educational models and practices.

• Advanced Manufacturing:  In addition to increasing National Science Foundation (NSF), the National Institute of Science Technology (NIST), Department of Energy (DOE) and Defense Advanced Research Projects Agency (DARPA) funding to support innovation in advanced manufacturing technologies, the President’s FY 2012 budget request includes proposes a re-authorization of $5 billion tax credit to spur investment in manufacturing capacity for the clean energy technologies of the future.

• Wireless Innovation and Infrastructure:  The President’s budget proposal recommends freeing up 500 Mhz of spectrum through voluntary incentive auctions and more efficient federal spectrum use in order to generate $27.8 billion in federal revenues over the next decade.  $5 billion of the proceeds would support a one-time, $5 billion investment in the “Universal Service Fund” to expand access to 4G broadband services.  $3 billion of the spectrum proceeds will go to research and development of emerging wireless technologies and applications.  Another $10.7 billion commitment to support the development and deployment of a nationwide wireless broadband network to afford public safety agencies with far greater levels of effectiveness and interoperability. The balance of revenues would be used for deficit reduction.

The Budget Process in Context

To assess the prospects for either the House FY 2011 budget cuts or the President’s FY 2012 budget request becoming law, it is important to understand the federal budget process, as well as the current political environment.

The White House initiates the budget process by submitting its budget proposal to Congress at the beginning of each annual session. The House of Representatives and Senate then adopts a concurrent budget resolution, which sets the overall funding levels available for appropriation by budget function.  The budget resolution is not bound by, and often varies significantly from, the President’s budget request.

Once a budget resolution is adopted, the House Committee on Appropriations allocates those funds to its twelve subcommittees responsible for funding government programs.  Each subcommittee produces an appropriations bill(s) covering the departments and agencies within their respective jurisdictions.  After clearing the full committee and passage in the House of Representatives, the House then communicates the appropriations measure to the Senate, where the Senate Appropriations Committee and its subcommittees have also deliberated on their funding plans.  Once the Senate acts, differences between the House and Senate proposals are reconciled by conference committee and the compromise budget legislation is presented for approval by each House.  If passed, the appropriations bill then goes to the President for signature into law.

The budget law-making process is much more complicated and difficult to resolve in practice than as described above. Differences over budget priorities between the House and the Senate, and between Congress and the White House, ensure that the final Fiscal Year budget is often substantially different from the President’s proposal.

Electoral cycles create legislative time constraints and partisan political differences affect the willingness of parties to collaborate.  And in many cases, Congress is unable or unwilling to act on individual appropriations bills, preferring instead to combine them into a single “omnibus” appropriations measure.  Congress may also elect to run the government through a series of continuing resolutions, which extend the previous budget into the current budget year, often with small adjustments, which allows government to continue operating at or near the previous appropriations levels.

For the above reasons, the President’s annual budget request for science and technology-related programs is a good measure of what the Administration’s current priorities are, but actual priorities will not be set until Congress appropriates funding to carry-out the associated programs and operations.   Ideally, this should be accomplished by the beginning of the FY 2012 budget year on 1 October 2011, however, past practice suggests Congress will not be able to act that quickly.

For More Information

The Full Year Continuing Resolution Act, 2011 (H.R. 1)
http://thomas.loc.gov/cgi-bin/bdquery/z?d112:h.r.00001:

The President’s FY 2012 Budget Proposal
http://www.whitehouse.gov/omb/budget/Overview/

IEEE-USA E-Book, Highlights of the FY 2012 Federal Science and Technology Budget Proposal:  A Compendium of Budget Materials (Feb. 2011)
http://www.ieeeusa.org/communications/ebooks/default.asp

IEEE-USA R&D Policy Committee
http://www.ieeeusa.org/volunteers/committees/rdc/default.asp

AAAS R&D Budget Project
http://www.aaas.org/spp/rd/

Comments may be submitted to todaysengineer@ieee.org.