technology across the federal government. The institutionalization of the FS&T budget as a concept and a process is critically important to the analysis of short- and long-term investments in science and technology and, as discussed in our report on the President's FY 2002 FS&T proposal, the National Research Council endorses the approach to tabulating FS&T that OMB has developed. The list of programs in OMB's tabulation of the FS&T budget can be found in Table 1.3

THE PRESIDENT'S FY 2003 FEDERAL SCIENCE AND TECHNOLOGY BUDGET

For fiscal year (FY) 2003, the Administration's budget proposal would increase the FS&T spending by 7.0 percent, from $52.3 billion to $56.0 billion, in constant FY 2002 dollars. The Administration would fund substantial increases for its high-priority initiatives, such as completing the doubling the budget of the National Institutes of Health (NIH). Under the Administration's proposal, 94 percent of the increase in FS&T spending, or $3.4 billion in constant FY 2002 dollars, would go to NIH. The administration would also focus a large part of its proposed increase on research that would help counter terrorist threats. Under its proposal, the Administration targets about $1.7 billion, or about 40 percent of the proposed NIH increase, to research at the NIH focusing on countering bioterrorism.

Despite the large overall increase proposed for FS&T, there are two important concerns with the Administration's budget proposal that merit further consideration.

First, the nation should identify national goals and agency missions and set funding priorities in line with those goals and missions, and the Administration has done so. However, the nation should also ensure the adequacy of funding across the science and engineering enterprise—as recommended by the Academies in Science, Technology, and the Federal Government: National Goals for a New Era—to facilitate world-class science and engineering across fields and to ensure preeminence in key disciplines. It is critically important to sustain world-class science and technology across fields so that we can generate and benefit from advances wherever they come from and meet challenges whenever they rise. Although we know that breakthroughs will occur as a result of our investment in research generally, we do not know which specific fields they will emerge from. For example, the results of research in quantum physics in the first half of the twentieth century later led to such diverse developments as transistors, with an array of electronic applications, and magnetic resonance imaging, with important medical applications, in the second half of the century.

Although the Administration has established FS&T priorities for FY 2003, it has not addressed the issue of adequacy of funding across the FS&T portfolio. In constant dollars, the NIH budget would increase by 14.6 percent, or $3.4 billion, while all of the rest of the FS&T budget would increase by 0.8 percent, or just $221 million. Indeed, FS&T funding for most departments and agencies would decrease in constant dollars under the President' s budget proposal.

Reductions in funding for certain agencies, such as the Departments of Energy and Defense, would negatively impact specific fields in the physical sciences and engineering that were already cut substantially in the 1990s. These trends affect the amount of research that can be conducted in the short run because of the reduced funding available. They therefore affect our ability to generate and capitalize on breakthroughs that might come from such fields. They also affect our nation's ability to maintain world-class scientific research across fields in the long run, because research and graduate education are closely linked and reductions in research funding have led to decreased enrollment of graduate students. FS&T investments sustain key university programs that not only contribute to the nation's research capability but also produce the scientists and engineers necessary to maintain the nation's scientific and technological strength, so key to economic competitiveness and national security.

In addition to establishing current funding priorities, Congress and the President should consider the health of science and engineering across fields in its budget allocations. Funding for science and technology is an invest-

3  

Much of FS&T, which totaled $52.3 billion in FY 2002, is counted in the R&D budget, which totaled $103.2 billion in FY 2002. Unlike the R&D budget, FS&T is comprised of identifiable line items in the budget and includes all costs, including staff salaries, associated with those programs. FS&T focuses more narrowly on research and also includes key science and engineering education programs at the National Science Foundation.



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