OVERVIEW OF THE REPORT

ALLOCATING FUNDS FOR SCIENCE AND TECHNOLOGY

In 1994, the U.S. Senate Committee on Appropriations requested the National Academy of Sciences, National Academy of Engineering, and Institute of Medicine to issue a report that addressed “the criteria that should be used in judging the appropriate allocation of funds to research and development activities, the appropriate balance among different types of institutions that conduct such research, and the means of assuring continued objectivity in the allocation process.”1Allocating Federal Funds for Science and Technology, the resulting report issued in 1995, recommended the Executive Office of the President and Congressional appropriators develop a more coherent budget process for determining the federal investment in programs that create new knowledge and technologies—the federal science and technology (FS&T) budget. The report recommended the President should, as an outcome of this process, present annually a comprehensive FS&T budget that both addresses national priorities and fosters a world-class science and technology enterprise.

Since then, the National Academies have tracked the FS&T budget in a series of annual reports. The Academies have examined FS&T as that part of federal R&D spending, as estimated by the agencies, that creates new knowledge or technologies. At the same time, the Executive Office of the President has developed through the last four budget cycles another method for tracking the federal investment in key science and technology programs that is independent of R&D estimates provided by agencies. In the Administration’s fiscal year 2002 budget, this tabulation was explicitly titled the Federal Science and Technology Budget and it was justified by reference to Allocating Federal Funds and its call for highlighting “more consistently and accurately activities central to the creation of new knowledge and technologies.”

The President’s fiscal year 2002 budget, therefore, represents an important opportunity for institutionalizing an annual, concerted focus on the nation’s plans for investing in science and technology. In the interest of sound science policy and an efficient budget process, the science and engineering community and the Administration would be well served by adopting a single method for tracking the FS&T budget. This report endorses the Administration’s approach to examining the federal science and technology budget and accepts its definition of the FS&T budget as an appropriate baseline for further analysis and possible refinement. The Administration’s approach focuses on the largest S&T programs. It includes all costs associated with those programs, including staff salaries. It also includes key science and engineering education programs at the National Science Foundation that are not considered R&D but are critical investments in science and technology. It is comprised of identifiable line items in the budget, permitting easy tracking through the Congressional appropriations process. By contrast, neither R&D nor the Academies’ FS&T can be tracked in this manner, since they are based on agency estimates rather than on budget line items.

1  

National Research Council, Allocating Federal Funds for Science and Technology (Washington, D.C.: National Academy Press, 1995), p. v.



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Observations on the President’s Fiscal Year 2002 Federal Science and Technology Budget OVERVIEW OF THE REPORT ALLOCATING FUNDS FOR SCIENCE AND TECHNOLOGY In 1994, the U.S. Senate Committee on Appropriations requested the National Academy of Sciences, National Academy of Engineering, and Institute of Medicine to issue a report that addressed “the criteria that should be used in judging the appropriate allocation of funds to research and development activities, the appropriate balance among different types of institutions that conduct such research, and the means of assuring continued objectivity in the allocation process.”1 Allocating Federal Funds for Science and Technology, the resulting report issued in 1995, recommended the Executive Office of the President and Congressional appropriators develop a more coherent budget process for determining the federal investment in programs that create new knowledge and technologies—the federal science and technology (FS&T) budget. The report recommended the President should, as an outcome of this process, present annually a comprehensive FS&T budget that both addresses national priorities and fosters a world-class science and technology enterprise. Since then, the National Academies have tracked the FS&T budget in a series of annual reports. The Academies have examined FS&T as that part of federal R&D spending, as estimated by the agencies, that creates new knowledge or technologies. At the same time, the Executive Office of the President has developed through the last four budget cycles another method for tracking the federal investment in key science and technology programs that is independent of R&D estimates provided by agencies. In the Administration’s fiscal year 2002 budget, this tabulation was explicitly titled the Federal Science and Technology Budget and it was justified by reference to Allocating Federal Funds and its call for highlighting “more consistently and accurately activities central to the creation of new knowledge and technologies.” The President’s fiscal year 2002 budget, therefore, represents an important opportunity for institutionalizing an annual, concerted focus on the nation’s plans for investing in science and technology. In the interest of sound science policy and an efficient budget process, the science and engineering community and the Administration would be well served by adopting a single method for tracking the FS&T budget. This report endorses the Administration’s approach to examining the federal science and technology budget and accepts its definition of the FS&T budget as an appropriate baseline for further analysis and possible refinement. The Administration’s approach focuses on the largest S&T programs. It includes all costs associated with those programs, including staff salaries. It also includes key science and engineering education programs at the National Science Foundation that are not considered R&D but are critical investments in science and technology. It is comprised of identifiable line items in the budget, permitting easy tracking through the Congressional appropriations process. By contrast, neither R&D nor the Academies’ FS&T can be tracked in this manner, since they are based on agency estimates rather than on budget line items. 1   National Research Council, Allocating Federal Funds for Science and Technology (Washington, D.C.: National Academy Press, 1995), p. v.

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Observations on the President’s Fiscal Year 2002 Federal Science and Technology Budget Federal spending in three key program areas that are included in the National Academies’ tabulation of the FS&T budget—Advanced Technology (6.3)2 in the Department of Defense (DOD) ($4.1 billion), Atomic Weapons Defense Activities in the Department of Energy (DOE) ($2.9 billion), and Human Space Flight R&D at the National Aeronautics and Space Administration (NASA) ($2.8 billion)—account for almost all of the $10 billion difference between it and the way the Administration tracks FS&T. As the Administration’s tabulation has evolved, the U.S Office of Management and Budget (OMB) has made changes from year-to-year in what is included in the Administration’s tabulation. The Administration should continue to refine its tabulation, examining further, if it has not already done so, whether other federal programs might also be included, in whole or part, in its FS&T budget calculation. To make the FS&T budget category useful, though, it needs a stable, rational definition. OMB, in consultation with the White House Office of Science and Technology Policy, should prepare a document that provides such a definition and the rationale underlying it. THE PRESIDENT’S FY 2002 FS&T BUDGET The President’s FY 2002 budget proposal would increase FS&T spending in constant dollars by $950 million, or 1.7 percent, according to the Academies’ method for tabulating FS&T, and by $1.44 billion, or 3.0 percent, under the Administration’s method. Either way, however, the FS&T budget would decrease substantially from FY 2001 to FY 2002 when the budget for the National Institutes of Health (NIH) is excluded. Indeed, once FS&T at the NIH is excluded, FS&T under the President’s budget proposal would be reduced in constant dollars below its level in FY 1994.3 With the exception of FS&T at NIH and at the Department of Transportation, which is independently supported by the Federal Highway Trust Fund, FS&T spending would be flat or cut at all other major science and technology agencies. To cite one key example, the budget of the National Science Foundation (NSF), which increased 11.0 percent in constant dollars from FY 2000 to FY 2001, would decrease 0.8 percent from FY 2001 to FY 2002 under the President’s proposal. FS&T in NSF’s Research and Related Activities account would decrease even further, by 2.9 percent in constant dollars. The increase of 11.3 percent in the NIH budget contributes to the national goal of improving the health of the American people. It also contributes substantially toward advancing life sciences research in the United States, particularly biomedical research. The goal of improving the health of the American people would also be well served by federal investment in fundamental research areas outside the life sciences funded by other agencies.4 In the past, such investments in the physical sciences and engineering have led to breakthroughs in medical technology such as magnetic resonance imaging, positron emission tomography, and 2   The Department of Defense has classified activities in its Research, Development, Test, and Evaluation (RDT&E) program into seven categories: Basic Research (6.1), Applied Research (6.2), Advanced Technology (6.3), Demonstration and Validation (6.4), Engineering and Manufacturing Development (6.5), RDT&E Management Support (6.6), and Operational Systems Development (6.7). 3   Budget amounts for FY 2002 are proposed spending levels under the President’s budget request; figures for earlier years are actual or estimated Congressional appropriations. 4   U.S. House of Representatives, Committee on Science, Unlocking our Future: Toward a New National Science Policy, September 1998.

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Observations on the President’s Fiscal Year 2002 Federal Science and Technology Budget miniaturization in arthroscopic surgery. Similarly, funding for social science research has contributed to an understanding of how modifying individual behavior or social structures can impact both individual health and health care delivery. Under the President’s proposal, these investments would be reduced. As it deliberates the federal budget and agency appropriations, Congress should bear in mind other national priorities and the FS&T expenditures that may be necessary to support them. The Administration’s reviews of national goals and policies in national security, energy security, and the climate change carried out since the release of the President’s budget proposal, suggest that Congress should take a close look at FS&T funding at the Department of Defense, Department of Energy, and the Environmental Protection Agency, among other agencies, to ensure that our nation’s investments in science and technology are sufficient to provide the research necessary to meet our goals in these areas.5 Similarly, the national goal of a world-class science and technology enterprise, one that has provided the underpinning for recent, sustained economic growth, requires adequate FS&T spending across many fields of science and engineering, a goal that cannot be accomplished if FS&T spending is increased in only one or two agencies.6 At a minimum, Congress should consider carefully the current and future budgetary requirements for programs that support FS&T at the National Science Foundation, which is critical to providing funding for research across the science and engineering enterprise. Congress should also consider current and future science and technology funding through other federal agencies. These agencies are vital for achieving national goals in defense, energy security, and the environment in addition to fostering a world-class national science and technology enterprise. 5   The Administration’s budget proposal was released on April 9, 2001. U.S. Office of Management and Budget, Budget of the U.S. Government, FY 2002 (Washington, D.C.: U.S. Government Printing Office, 2001). The Administration’s review of U.S. military posture, which was begun prior to the release of the President’s budget proposal in April, was still underway when this report was submitted for external review in late June. This review, and its potential budget implications, are described in Executive Office of the President of the United States, A Blueprint for New Beginnings: A Responsible Budget for America’s Priorities, pp. 53–54, on the web at http://www.whitehouse.gov/news/usbudget/blueprint/budtoc.html. Similarly, the President organized, in late January, a cabinet-level task force, chaired by Vice President Richard Cheney, to develop a national energy policy. The final report of this task force was released after the Administration’s budget, on May 16, 2001. National Energy Policy Group, National Energy Policy: Report of the National Energy Policy Group, May 2001 (Washington, D.C.: U.S. Government Printing Office, 2001). Since the release of its budget proposal, the Administration has also begun a reassessment of its policies on global climate change. See Letter from the White House to Dr. Bruce Alberts, May 11, 2001, Appendix A, in National Research Council, Climate Change Science: An Analysis of Some Key Questions (Washington, D.C.: National Academy Press, 2001), p. 27. 6   F.M. Scherer, New Perspectives on Economic Growth and Technological Innovation (Washington, D.C.: Brookings, 1999). Eugene Wong, “An Economic Case for Basic Research,” Nature (1996) 381:187–188. National Research Council, Harnessing Science and Technology for America’s Economic Future (Washington, D.C.: National Academy Press, 1999).

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