Observations on the President's FY 2003 Federal Science and Technology Budget

INTRODUCTION

In 1995, the National Research Council, in Allocating Federal Funds for Science and Technology, recommended that the Executive Office of the President and Congressional appropriators carefully examine the annual proposed federal investment across agencies in programs that create new knowledge or enabling technologies to ensure that, collectively, these investments address national goals and sustain the overall science and engineering enterprise. To facilitate this review and analysis, the NRC recommended the annual preparation of the Federal Science and Technology (FS&T) Budget. This report, fifth in a series, provides observations on national goals for science and technology and on the President 's proposed fiscal year (FY) 2003 FS&T budget in relation to those goals.

The first section of the report outlines the development during the 1990s of national goals for science and technology and of a means for tabulating the FS&T budget. The second section summarizes the President's FS&T budget proposal for FY 2003. It also provides a review of an NRC report on science and technology for countering terrorism, published since the President's budget release, that offers important recommendations for long-term funding of S&T programs as they relate to counterterrorism activities. The third section of the report provides observations on the President's budget, which proposes a very large increase for biomedical research and, in the aggregate, only a very small increase for the rest of the FS&T programs. If Congress were to enact the President's budget request, the increase of $3.4 billion in constant FY 2002 dollars for the National Institutes of Health (NIH) would account for 94 percent of the overall increase in FS&T funding.1 This section also outlines a process for considering funding for both priority-driven research and discovery-oriented research that will sustain S&T across all fields for the long term. The fourth section provides recommendations for ensuring that federally funded S&T programs provide high-quality research outcomes that are relevant to agency missions and provide the U.S. with global leadership in science and engineering.

1  

Deflators used to convert current dollar amounts to constant FY 2002 dollars are derived from the GDP (chained) price index listed in Table 10.1, Gross Domestic Product and Deflators Used in the Historical Tables, 1940–2007, in U.S. Office of Management and Budget, Budget of the United States Government, Fiscal Year 2003: Historical Tables, Washington, D.C.: U.S. Government Printing Office, 2002.



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OBSERVATIONS ON THE PRESIDENT'S FISCAL YEAR 2003: FEDERAL SCIENCE AND TECHNOLOGY BUDGET Observations on the President's FY 2003 Federal Science and Technology Budget INTRODUCTION In 1995, the National Research Council, in Allocating Federal Funds for Science and Technology, recommended that the Executive Office of the President and Congressional appropriators carefully examine the annual proposed federal investment across agencies in programs that create new knowledge or enabling technologies to ensure that, collectively, these investments address national goals and sustain the overall science and engineering enterprise. To facilitate this review and analysis, the NRC recommended the annual preparation of the Federal Science and Technology (FS&T) Budget. This report, fifth in a series, provides observations on national goals for science and technology and on the President 's proposed fiscal year (FY) 2003 FS&T budget in relation to those goals. The first section of the report outlines the development during the 1990s of national goals for science and technology and of a means for tabulating the FS&T budget. The second section summarizes the President's FS&T budget proposal for FY 2003. It also provides a review of an NRC report on science and technology for countering terrorism, published since the President's budget release, that offers important recommendations for long-term funding of S&T programs as they relate to counterterrorism activities. The third section of the report provides observations on the President's budget, which proposes a very large increase for biomedical research and, in the aggregate, only a very small increase for the rest of the FS&T programs. If Congress were to enact the President's budget request, the increase of $3.4 billion in constant FY 2002 dollars for the National Institutes of Health (NIH) would account for 94 percent of the overall increase in FS&T funding.1 This section also outlines a process for considering funding for both priority-driven research and discovery-oriented research that will sustain S&T across all fields for the long term. The fourth section provides recommendations for ensuring that federally funded S&T programs provide high-quality research outcomes that are relevant to agency missions and provide the U.S. with global leadership in science and engineering. 1   Deflators used to convert current dollar amounts to constant FY 2002 dollars are derived from the GDP (chained) price index listed in Table 10.1, Gross Domestic Product and Deflators Used in the Historical Tables, 1940–2007, in U.S. Office of Management and Budget, Budget of the United States Government, Fiscal Year 2003: Historical Tables, Washington, D.C.: U.S. Government Printing Office, 2002.

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OBSERVATIONS ON THE PRESIDENT'S FISCAL YEAR 2003: FEDERAL SCIENCE AND TECHNOLOGY BUDGET NATIONAL GOALS FOR SCIENCE AND TECHNOLOGY The nation has benefited significantly from an enduring federal system for funding and sustaining world-class science and engineering. This tremendously productive system has contributed importantly over the last half-century to economic growth, innovation, and advancing national goals in space exploration, defense, energy security, health, and the environment. In the 1990s, this system faced important challenges. Changes brought about by economic globalization, the end of the Cold War, the rapid growth of information technology, and emerging changes in the way scientists and engineers carry out their work suggested new priorities for federal funding in science and technology. Policy makers began to discuss how best to allocate funding across science and technology programs in light of these shifting priorities, particularly because short-term pressure for reining in government spending meant that trade-offs between programs would be necessary as funding was reallocated. The large federal budget deficits of the early 1990s led to very tight limits on FS&T increases across agencies, including NIH. In the mid-1990s, the National Academies addressed the need for establishing explicit national goals for science and technology in this new era and the means for allocating resources to meet those goals through two reports, Science, Technology, and the Federal Government: National Goals for a New Era (1993) and Allocating Federal Funds for Science and Technology (1995). These reports and their recommendations are described below. Leadership in Science and Technology In Science, Technology, and the Federal Government: National Goals for a New Era, published in 1993, the Academies' Committee on Science, Engineering, and Public Policy (COSEPUP) recommended two national goals for science that could guide future federal investment in science and technology: First, the United States should be among the world leaders in all major areas of science. Achieving this goal would allow this nation quickly to apply and extend advances in science wherever they occur. Second, the United States should maintain clear leadership in some areas of science. The decision to select a field for leadership would be based on national objectives and other criteria external to the field of research.2 The National Science Board, in a recent review of the process for allocating resources for federally funded research entitled Federal Research Resources: A Process for Setting Priorities, echoed these goals by recommending that this process “place a priority on investments in areas that advance important national goals, identify areas ready to benefit from greater investment, address long-term needs and opportunities for federal missions and responsibilities, and ensure world-class fundamental science and engineering capabilities across the frontiers of knowledge.”3 Both National Goals and Federal Research Resources recommended assessing the performance of U.S. research in a major field compared with research undertaken by scientists in other countries, a task known as international benchmarking. Such assessments would provide the information needed to determine whether the U.S. investment in a field is adequate for ensuring that the United States is at least world-class in that field. Societal concerns and needs, as determined through priorities established by the political process, would determine whether U.S. investment should be increased above this world-class level to attain clear leadership in a field. Allocating Federal Funds for Science and Technology The National Goals report concluded also that the implementation of its goals for science required a more coherent federal budgetary process. In 1994, the U.S. Senate Committee on Appropriations asked the National Academies to issue a report that outlined what this new process might look like. Specifically, the Committee asked 2   National Academy of Sciences, National Academy of Engineering, Institute of Medicine, Science, Technology, and the Federal Government: National Goals for a New Era, Washington, D.C.: National Academy Press, 1993. 3   National Science Board, Federal Research Resources: A Process for Setting Priorities (NSB 01-156), Arlington, VA: National Science Foundation, 2001, p. 4.

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OBSERVATIONS ON THE PRESIDENT'S FISCAL YEAR 2003: FEDERAL SCIENCE AND TECHNOLOGY BUDGET the Academies to address “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 for assuring continued objectivity in the allocation process.”4 In Allocating Federal Funds for Science and Technology, a report issued in 1995, the National Research Council responded to the Congressional charge by outlining a process for proposing and enacting federal investments. First, and foremost, it urged that this process focus on federal investments in programs that create new knowledge and enabling technologies—what the report called the federal science and technology (FS&T) budget. Second, the report advised the Executive Office of the President to annually present a comprehensive FS&T budget proposal that addresses both current national priorities and the investments necessary to sustain a world-class science and technology enterprise. This FS&T budget should be the result of a process by which the U.S. Office of Management and Budget (OMB) would establish cross-cutting national priorities for science and technology, provide agencies with clear guidance on these priorities, and review agency budget proposals to ensure that they support the priorities.5 OMB has accepted the FS&T budget concept and refined it over the last five budget cycles. OMB's first approach to tabulating FS&T was presented in the President's FY 1999 budget cycle as the “Research Fund for America,” which focused on civilian research priorities. OMB evolved and refined this tabulation over the next two cycles as the “Twenty-First Century Research Fund,” which also included basic and applied defense research. OMB then carried this approach forward with the FY 2002 budget proposal, making further refinements and renaming it the “Federal Science and Technology Budget” to bring it explicitly in line with the Academies' FS&T concept. 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 Academies endorse the approach to tabulating FS&T that OMB has developed for the following reasons: OMB's FS&T budget tabulation 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 research and development (R& D) but are critical investments in science and technology. Unlike the R&D budget, it is comprised of identifiable line items in the budget, permitting easy tracking through the Congressional Appropriations process. The list of programs in OMB's tabulation of the FS&T budget can be found in Tables 1 and 2.6 THE PRESIDENT'S FY 2003 FEDERAL SCIENCE AND TECHNOLOGY BUDGET The Administration based its overall budget proposal for FY 2003 on four overarching programmatic, fiscal, and managerial priorities: funding the war against terrorism at home and overseas; stimulating the economy to foster job creation; providing increases for high-priority initiatives while moderating growth in the rest of government; and reforming the budget to focus on results instead of dollars spent. The Administration has proposed a FY 2003 FS&T budget that purports to be in line with these overarching guidelines. It would: provide incremental funding for research at the NIH that focuses on countering bioterrorism. increase the R&D budget by 6.7 percent, from $103 billion to $110 billion, in constant FY 2002 dollars, and the FS&T budget by 7.0 percent, from $52 billion to $56 billion, in constant FY 2002 dollars. fund substantial increases for its high-priority initiatives, such as doubling the NIH budget, while “moderating growth” for the rest of the FS&T budget. The FS&T budget, with funding for NIH excluded, would grow less than 1 percent from FY 2002 to FY 2003. 4   National Research Council, Allocating Federal Funds for Science and Technology, Washington, D.C.: National Academy Press, 1995, p. v. 5   Ibid. 6   About 80 percent 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. It also includes non-R&D programs such as science and engineering education programs at NSF.

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OBSERVATIONS ON THE PRESIDENT'S FISCAL YEAR 2003: FEDERAL SCIENCE AND TECHNOLOGY BUDGET implement “R&D Investment Criteria” developed by OMB to examine R&D programs and expenditures through the lens of performance.7 There are several concerns with the Administration's budget proposal that merit further consideration. First, as shown below, the Administration proposes very little new funding for research carried out by agencies other than NIH, such as the Department of Defense, that would also contribute to countering terrorism. Second, it would reduce FS&T funding in constant dollars for most departments and agencies, such as the Departments of Energy and Defense, that support physical science and engineering research and contribute to important agency missions and national goals. Third, mechanisms for reviewing FS&T programs and expenditures should examine not just short-term program performance but also whether federal spending leads to long-term global leadership in science. The President's S&T Priorities The Administration has identified biomedical research as its top S&T research priority and proposes a substantial increase in this area in absolute and percentage terms. It has proposed substantial percentage increases in funding for other areas as well, although in absolute terms the increases are small, especially relative to the proposed increase for NIH. The President's budget proposes increases in FS&T for the following programs and initiatives—analysis is in constant dollars as shown in Table 2 (for current dollar amounts and calculations, see Table 1): Biomedical research: The Administration's proposed budget for FY 2003 would increase the budget of NIH by $3.4 billion, or 14.6 percent, to $26.8 billion in FY 2002 constant dollars. About $1.7 billion, 40 percent, of the proposed NIH increase, would be targeted to activities, mainly in the National Institute of Allergy and Infectious Diseases (NIAID), related to countering bioterrorism. Another 20 percent of the increase would be made available to the National Cancer Institute to increase cancer research, seen by the Administration as a primary vehicle for supporting “research on diseases affecting the lives of all Americans.” The remaining 23 institutes at NIH would share the rest of the proposed increase for the agency. The Administration also proposes an increase of $29 million, or 7.7 percent, in FS&T for clinical, epidemiological, and behavioral research in the Department of Veterans Affairs. Space Science: Space science at the National Aeronautics and Space Administration would receive an increase of $333 million, or 11 percent, in constant dollars under the President's budget proposal. The space science budget would fund a revamped New Frontiers program “of competitively selected planetary missions focused on understanding the origins and existence of life beyond earth.” The President's budget proposal also targets an increase of $250 million, or 9.8 percent, for NASA's aerospace technology program. Nanotechnology: The Administration supports the potential for scientific advancement through nanoscale research by recommending an increase of $88 million, or 15.2 percent, in constant dollars for the National Nanotechnology Initiative. This program, led by the National Science Foundation (NSF), focuses on the manipulation of matter at the atomic and molecular levels that could lead to new breakthroughs in materials, electronics, information technology, and biotechnology. Nine agencies participate in this initiative, with most of the funding shared by NSF and the Departments of Defense and Energy. Climate Change Research: The Administration's budget proposes an increase of $53 million, or 3.2 percent, in constant dollars in combined funding for the U.S. Global Change Research Program and a new Climate Change Research Initiative (CCRI). The total FY 2003 budget for these programs, which would 7   Details of the Administration's Federal Science and Technology Budget proposal can be found in Chapter 8, “Research and Development,” in U.S. Office of Management and Budget, Budget of the United States Government, Fiscal Year 2003: Analytical Perspectives, Washington, D.C.: U.S. Government Printing Office, 2002. For a comprehensive analysis of the Administration's proposed R&D spending see also Intersociety Working Group, AAAS Report XXVII: Research & Development 2003, Washington, D.C.: American Association for the Advancement of Science, 2002.

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OBSERVATIONS ON THE PRESIDENT'S FISCAL YEAR 2003: FEDERAL SCIENCE AND TECHNOLOGY BUDGET be $1,723 million in constant FY 2002 dollars, would still be below the FY 2000 level for these programs. NASA, responsible for the satellites that are key to research in this area, would receive almost two-thirds of the funding for climate change research. The $40 million proposed for the new CCRI, led by the National Oceanic and Atmospheric Administration (NOAA) and NSF, would be targeted to addressing key gaps in knowledge identified in the National Academies report, Climate Change Science: An Analysis of Some Key Questions.8 Environmental Protection: The President's budget also proposes an additional $33 million, or 4.4 percent, in constant dollars for the Environmental Protection Agency (EPA). EPA's priority FS&T programs for FY 2003 will examine issues related to assessing the cumulative risks of complex pollutant mixtures and will provide scientific support to its highest-priority pending regulatory issues. Education Research and Innovation: Under the President's proposal, FS&T in the Department of Education would increase by $46 million, or 12.3 percent, in constant dollars from FY 2002 to FY 2003. This increase would be targeted entirely at programs in the Office of Educational Research and Improvement (OERI) that would increase research on effective preschool curricula and on how children learn to read. It would also focus on identifying strategies to enhance the use of research findings by teachers, school administrators, and policy makers. This effort could be productive, particularly if the Department of Education collaborated closely with the Math and Science Partnership Program, another Presidential priority, administered by NSF. Implementing new knowledge about how people learn in the classroom is critical for reading, science, and mathematics, and programs run by the Department of Education and NSF should both benefit from this work. These areas, and perhaps others, hold significant promise for addressing short-term policy issues or long-term research objectives. The National Research Council has described research needs in several of these areas, for example, nanotechnology and climate change, both of which are identified and funded as cross-cutting priorities by the Administration, and astronomical research, a field funded in part by the NASA Space Science program.9 Still, the Administration has assigned biomedical research its highest priority among all of these areas as measured by proposed increases in absolute dollars. Although large percentage increases are slated for each of these areas, the absolute increase of $3.4 billion for NIH dwarfs the dollar increases of all other areas combined that are slated for growth.10 The President's Proposal for FS&T in Other Agencies Although the Administration proposes substantial increases for its high-priority initiatives, it would moderate growth or cut budgets in other areas of science and technology. This can be seen both in the budget proposals for individual agencies and in the aggregate by contrasting the proposed increase for NIH with the proposed increase in total FS&T for other agencies. NSF, the one federal agency charged with funding research across the science and engineering enterprise, would receive only a very modest increase in funding under the President's proposal. The NSF budget would increase by $152 million, or 3.2 percent, in constant dollars, to almost $5 billion under the proposal, with the proposed budget for NSF's Research and Related Activities (R&RA) Account increasing at about the same rate. 8   National Research Council, Climate Change Science: An Analysis of Some Key Questions, Washington, D.C.: National Academy Press, 2001. 9   National Research Council, Small Wonders, Endless Frontiers: Review of the National Nanotechnology Initiative, Washington, D.C.: National Academy Press, 2002. National Research Council, Climate Change Science: An Analysis of Some Key Questions, Washington, D.C.: National Academy Press, 2001. National Research Council, Federal Funding of Astronomical Research, Washington, D.C.: National Academy Press, 2000. 10   The Administration's out-year projections would provide NIH with smaller increases that may result in critical grant management issues for the agency. However, NIH would still receive the largest increase in R&D spending from FY 2002 to FY 2007 under the Administration's proposal. Intersociety Working Group, AAAS Report XXVII: Research & Development FY 2003, Washington, D.C.: AAAS, 2002, pp. 25-26 and 31-33 and Table I-11.

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OBSERVATIONS ON THE PRESIDENT'S FISCAL YEAR 2003: FEDERAL SCIENCE AND TECHNOLOGY BUDGET FIGURE 1 Proposed Change in FS&T Spending, by Department or Agency, FY 2002–FY 2003 (millions of constant FY 2002 dollars). Source: Budget of the United States Government, Fiscal Year 2003. However, the proposed NSF increase includes funding for three programs currently at other agencies that the Administration proposes to transfer to NSF. The funding for these programs inflates the NSF increase relative to the FY 2002 budget, which did not include these programs. If the total funding of $75 million (in constant FY 2002 dollars) for these programs—NOAA's National Sea Grant Program, the U.S. Geological Survey (USGS) Hydrology of Toxic Substances program, and EPA's Environmental Education program—were subtracted from the proposed NSF budget, the agency's increase would be just $77 million, or 1.6 percent, in constant dollars. Funding for Networking and Information Technology R&D, a cross-cutting initiative carried out by seven federal agencies, would be relatively flat, increasing by $13 million, or 0.7 percent, in constant FY 2002 dollars, to $1.86 billion. The Administration designated this R&D initiative a priority area for FY 2003, and, as with nanotechnology and climate change research, the National Academies has described the need for expanding research in information technology to meet societal goals, including research funded by the federal government.11 However, the Administration has proposed only a very small increase in funding in real terms. The Administration's proposal would reduce the budgets of the remaining S&T agencies in constant dollars. The FS&T budget for the Department of Agriculture would be relatively flat, declining 0.6 percent in constant dollars. The FS&T budgets for the Departments of Defense, Energy, and Transportation would decrease by 1.9, 3.2, and 17.3 percent, respectively. The Defense basic research budget would be flat, increasing by 0.4 percent in constant dollars, whereas Defense applied research would decrease by 2.8 percent. DOE's Science Program would decrease by 0.4 percent in constant dollars. The budget for the USGS would decrease by 6.5 percent, and 11   National Research Council, Making IT Better: Expanding Information Technology Research to Meet Society's Needs, Washington, D.C.: National Academy Press, 2000.

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OBSERVATIONS ON THE PRESIDENT'S FISCAL YEAR 2003: FEDERAL SCIENCE AND TECHNOLOGY BUDGET FIGURE 2 Federal Funding for FS&T at NIH and at All Other Agencies Combined, FY 2000–FY 2003 (millions of constant FY 2002 dollars). Source: Budget of the United States Government, Fiscal Year 2003. those for the National Institute of Standards and Technology (NIST) and NOAA in the Department of Commerce would decrease by 5.5 and 19.4 percent, respectively. In sum, the President's priorities for science and technology in FY 2003 focus primarily on biomedical research as the Administration seeks to fulfill its campaign promise to complete the doubling of the budget for the National Institutes of Health (NIH). Whereas the Administration proposes a 14.6 percent increase for NIH, the rest of FS&T budget excluding NIH would be relatively flat, increasing less than 1 percent in constant dollars. In constant dollars, as seen in Figure 1, the NIH budget would increase by $3.4 billion, while all of the rest of the FS&T budget would increase by just $221 million, taking both proposed increases and decreases into account. As a result, the increase in the NIH budget represents 94 percent of the proposed increase in FS&T. The NIH budget now dominates F&ST spending. As shown in Figure 2, were the Administration's proposals enacted, the NIH budget as a percentage of the FS&T budget would increase to 48 percent, or almost half, up from about 40 percent in FY 2000. In 2001, NIH provided 60 percent of federal funding for university-based research. This percentage is likely to increase given the disparate trends in funding across fields. 12 Science and Technology for Countering Terrorism Since the tragic events of September 11, 2001, the science and engineering community has sought to contribute its technological expertise to near- and long-term solutions to problems associated with countering terrorism and 12   National Science Foundation/Division of Science Resources Studies, Federal Funds for Research and Development: Fiscal Years 1999, 2000, 2001, Volume 49 (NSF 01-328), Arlington, Va.: National Science Foundation, 2001, Tables C-29 and C-40.

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OBSERVATIONS ON THE PRESIDENT'S FISCAL YEAR 2003: FEDERAL SCIENCE AND TECHNOLOGY BUDGET terrorist events, clearly a high national priority. The Administration recently observed that the immediate problem of homeland security is not one of fundamental science, but rather the implementation of currently available technology.13 In the very near term, this is very certainly true. The Administration has, however, rightly proposed a substantial increase in funding for basic research at NIH related to combating bioterrorism. Indeed, the Administration's budget proposal targets 40 percent of the NIH increase and almost all of the new antiterrorism S&T funding to programs related to combating bio-terrorism. The NIAID has a well-defined bioterrorism program that should produce important research for the nation. The increased funding in this area would be welcome as an important start in funding one piece of the science and technology research that contributes to countering terrorist threats. Soon after the events of last September, the National Academies convened a committee cochaired by Lewis Branscomb and Richard Klausner to study the potential for science and technology to contribute to countering terrorism over the long run. This committee's final report, entitled Making the Nation Safer: The Role of Science and Technology in Countering Terrorism, was released in June 2002 and so was not available to the Administration when it formulated its budget proposal for FY 2003. We strongly recommend that Congress and the Administration consider the findings and recommendations of this report as they finalize appropriations for FY 2003 and formulate budget proposals for FY 2004 and beyond. In brief, this report makes a strong case for a long-term S&T agenda that includes investments and research across all fields of science and engineering.14 While it is true that immediate technological response to the reduction of homeland vulnerabilities requires the use or adaptation of technology that is “on the shelf,” presently available technologies and present-day knowledge are far short of the potential contribution of science and technology to homeland security. Although it is also true that a substantial national investment in funding for research on issues related to bioterrorism is likely to produce substantial returns, research in a range of fields across both the biological and physical sciences can contribute to the national effort to counter terrorism in important ways. Research on sensors and sensor-nets, for example, is still at an early stage. It is possible to imagine a network of biosensors in a subway system or in a metropolitan area that could give warning of a bioterrorist event. There has been much discussion of this capability, but bringing such systems about will require fundamental work in chemistry and biology, the development of sensors, perfection of technology that allows wireless communication of sensors with receiving stations that, in turn, have links to supercomputers with appropriate software for analysis and visualization, and links to local, state, and federal authorities. Making this kind of system effective requires substantial work that can only be categorized as FS&T. Accordingly, Making the Nation Safer outlines the potential impact of science and technology research in seven cross-cutting areas—systems analysis and modeling, integrated data management, sensors and sensor networks, robotic technologies, SCADA systems, biometrics, and human factors—on counterterrorism efforts. Importantly, the report goes on to argue “the realization of this potential will depend on a program of directed basic and applied research and will require an expansion and coordination of existing S&T programs and funding if the government's work is to produce effective tools for countering terrorism and ensuring homeland security.” (emphasis added)15 Further, the report notes that, in addition to the current level of effort being “too small,” a “balance of investments is critical, across different time horizons as well as across numerous disciplines. The government 's underinvestment in the physical sciences and engineering has been documented in a variety of reports…”16 13   See John Marburger, “Science and Technology in a Vulnerable World: Rethinking our Roles, ” Keynote Address to the 27th Annual AAAS Colloquium on Science and Technology Policy, April 11, 2002. Full text of speech can be found on-line at http://www.ostp.gov/html/02_4_15.html. 14   National Research Council, Making the Nation Safer: The Role of Science and Technology in Countering Terrorism, Washington, D.C.: National Academy Press, 2002. 15   Ibid., pp. 332-334 16   Ibid.

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OBSERVATIONS ON THE PRESIDENT'S FISCAL YEAR 2003: FEDERAL SCIENCE AND TECHNOLOGY BUDGET Again, Congress and the Administration should consider the findings and recommendations of Making the Nation Safer as they finalize appropriations for FY 2003 and formulate budget proposals for FY 2004 and beyond. In light of these recommendations, Congress and the Administration should pay particularly close attention to appropriations for basic and applied research carried out by NSF, DOE, DOD, and NIST as they relate to advancing technology for countering terrorism. Congress may also wish to consider the role and funding of social and behavioral research in understanding both the causes of terrorism and the behavior of terrorists and terrorist groups as steps toward preventing or discouraging terrorism. While research on countering bioterrorism conducted by NIH will be productive, research carried out by these other agencies and across a range of disciplines can also contribute substantially to efforts to counter terrorist threats against the United States. In this vein, Congress should also give careful consideration to the role and funding of science and technology in the proposed Department of Homeland Security. OBSERVATIONS ON THE PRESIDENT'S FS&T BUDGET PROPOSAL The nation should continue to invest in science and technology at a level and in a pattern that would allow science and engineering to contribute to agency missions, address important national goals across agencies, and sustain our global competitiveness and leadership in science now and in the future. Because resources are limited, the nation should identify national goals and agency missions and set funding priorities in line with those goals and missions. 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.17 Priority-Driven Research Research priorities must be determined by national goals and agency missions. As the National Goals report made clear, the decision to select a field for clear global leadership should be based on national objectives and other criteria external to the field of research. Clearly, prior Administrations have set a variety of priorities over the last 50 years—space exploration, nuclear weapon development and control, energy security, biomedical research—that have affected the ebb and flow of funding to specific science and engineering fields. Many of these priorities resulted in significant, though sometimes temporary, funding increases for fields in the physical sciences and engineering that have experienced reduced funding as priorities have changed in the last decade. The rise of and subsequent end to the Apollo program provides a case in point. Other policy priorities, such as improving the nation' s health, led to significant and sustained long-term growth in biomedical research funding. (From FY 1976 to FY 2002, the R&D budget for NIH increased 275 percent, an annualized rate of growth of 5.2 percent, in constant dollars, while the rest of nondefense R&D [that is, excluding NIH] grew 15 percent, an annualized rate of growth of just 0.5 percent, in constant dollars.)18 Many of these strategic research efforts, in such diverse fields as aeronautical engineering, AIDS research, and agriculture, have been highly successful. The current Administration has likewise identified areas where policy-driven research must be undertaken to meet current national needs. Increases in federal funding are warranted to meet real national objectives in cancer 17   National Academy of Sciences, National Academy of Engineering, Institute of Medicine, Science, Technology, and the Federal Government: National Goals for a New Era, Washington, D.C.: National Academy Press, 1993. 18   Calculations are based on data in Historical Table 2, Total R&D by Agency, FY 1976-2002 (budget authority in millions of constant FY 2001 dollars), in supplemental material to Intersociety Working Group, Congressional Action on Research and Development in the FY 2002 Budget , (Washington, D.C.: AAAS, 2002), http://www.aaas.org/spp/rd/hist02c2.pdf. (Historical trends for FS&T budgets do not exist for years prior to FY 2000, so non-defense R&D has been used as a proxy for it in this illustration. NIH R&D accounts for approximately 96 percent of the NIH FS&T budget, which is the same as total NIH budget.) David Korn, et al, “The NIH Budget in the ‘Postdoubling' Era,” Science, 296: 1401-1402 (2002), discusses historical trends in NIH funding and offers observations on future NIH funding scenarios. This article refers to a historical rate of increase for NIH of 9 percent from 1971 to 1998, unadjusted for inflation.

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OBSERVATIONS ON THE PRESIDENT'S FISCAL YEAR 2003: FEDERAL SCIENCE AND TECHNOLOGY BUDGET research, combating bioterrorism, assessing cumulative risks of pollutants, addressing gaps in our knowledge of climate change, and improving the education of preschoolers and early readers. They are also warranted for achieving such goals as reducing dependence on foreign oil through research in renewable or nuclear energy or combating terrorism through research sponsored by the Department of Defense and other agencies. Because resources are limited, care must also be taken to ensure that federally funded research focused on national needs and goals is the very best research. In the analytical chapter on research and development in its budget proposal this year, the Administration identifies funding for research projects undertaken at “congressional direction” (i.e., through congressional earmarks) and argues forcefully against it. The Administration observes that funding for earmarked projects increasingly results in the reduction of funding available for competitive, merit-reviewed research that could contribute to the achievement of national goals.19 Congress should take care to minimize earmarks in science and technology, particularly performer-specified earmarks. The responsibility for minimizing earmarks is also shared by universities and research faculty. In their own defense with regard to earmarking, members of Congress point out that the requests often originate on campuses.20 In a recent statement, the Association of American Universities (AAU) asserted its support for “the principle of merit review in the allocation of federal funds for scientific research.” The AAU statement continued, “We believe that panels of peer scientists are best qualified to judge the merit of proposals for federal funding. This competitive quality review system has a distinguished history that has kept America in the forefront of global scientific discovery. 21 University leaders and research faculty should adhere to these principles in the process of funding scientific research. Discovery-Oriented Research Although funding priorities must be driven by policy concerns, questions of adequacy must be addressed by a process that looks to a future that will surely see unforeseen discoveries, unknown goals, and uncertain risks. Here, questions of funding for research must be guided by a strategy that takes advantage of perceived opportunities for discovery and new knowledge but also recognizes that there is tremendous uncertainty about the source of future scientific breakthroughs.22 Long-term investments in science and technology should consider perceived opportunities for discovery and enhanced knowledge. Surely, there are important opportunities for advances in knowledge in biomedicine and biotechnology. There are also real opportunities for discoveries that could transform our lives stemming from scientific inquiry at the atomic and molecular level. Nanoscience has the potential for creating breakthroughs in materials, molecular electronics, information technology, and biotechnology, as well as the discovery of new forms and properties of matter. Research in cosmology and astrophysics likewise has the potential for revealing new aspects of the nature of matter that could revolutionize our thinking about a range of scientific fields. Enhancements in information technology through basic and applied research hold great promise for improving the efficiency of American industry. Funding designed to unlock opportunities for our nation in the long run should be cognizant of the new knowledge that could be produced across a range of fields such as these. Funding for science and technology is a long-term investment in the nation's future rather than simply a current budgetary expenditure. Vannevar Bush articulated this vision in his seminal report, Science—The Endless 19   U.S. Office of Management and Budget, Budget of the United States Government, Fiscal Year 2003: Analytical Perspectives, Washington, D.C.: U.S. Government Printing Office, 2002, p. 162. Although the Committee believes OMB is correct in this assertion, empirical research that substantiates this is warranted. 20   James D. Savage, Funding Science in America: Congress, the Universities, and the Politics of the Academic Pork Barrel, New York: Cambridge University Press, 1999, p. 19. 21   Association of American Universities, “AAU Research Policy Issues: Strengthening the University-Federal Government Research Partnership,” March 2002, http://www.aau.edu/sheets/RschPolicy.html 22   This view has been articulated by the life sciences community, which has reported “widespread agreement that the federal investment in science must fund research in a broad range of fields.” Federation of American Societies for Experimental Biology (FASEB), Federal Funding for Biomedical and Related Life Sciences Research, FY 2000, Bethesda, MD: FASEB, 1999, p. 16.

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OBSERVATIONS ON THE PRESIDENT'S FISCAL YEAR 2003: FEDERAL SCIENCE AND TECHNOLOGY BUDGET Frontier.23 Basic research as an investment in the future was an important theme for the Carter Administration.24 Reports issued in the 1990s from Congress, professional associations, and industrial organizations reaffirmed the importance of investing in research for the long run.25 In a policy forum published in Science in 1996, Michael McGeary and Philip Smith outlined how S&T funding is analogous to financial investing: The success of any given research project is uncertain, no matter how carefully it is evaluated. Projects addressing fundamental questions are often the riskiest: success, in the form of useful but unforeseen applications, may not be realized until years later. History also shows that important advances in one field sometimes come from apparently unrelated work in another field. In this situation of unpredictability, diversification is important for maximizing results. If it is not known where the breakthroughs will be made or when advances will occur, then it is prudent to invest in a broad portfolio of activities. 26 Ralph Gomory made similar observations when he delivered the annual William D. Carey Lecture to the AAS Science and Technology Policy Colloquium in 1995. In his address, he observed that while we can predict that basic research in the aggregate will lead to practical outcomes, we cannot predict what those practical outcomes might be, when they might emerge, and from which fields they might emerge. “We can see when some area of science is useful, but we cannot see that some area of science won't be useful,” he noted. “This has to do with the unpredictability of useful results.”27 There are many excellent examples of the unpredictability of useful results. In his 1995 lecture, Gomory cited how esoteric research in the 1920s in quantum mechanics, which addressed the “baffling puzzle of electrons that behaved like waves one moment and particles the next,” influenced solid-state physics in the 1930s and led, after World War II, “to an improved understanding of the fundamentals of crystals and solids” that in turn led to “a better grasp of the role of trace impurities and their effect on the flow of electrons.” This led to the transistor and transistors then led to improved computers and electronics. Slightly more than 30 years separated the “emergence of an esoteric and apparently useless field of scientific study from its enormous everyday impact.”28 An oft-cited example of how research in the physical sciences led, over a winding and uncertain road, to an important medical breakthrough is the story of how equally esoteric research in quantum mechanics later led to magnetic resonance imaging (MRI). By the 1920s, physicists understood the basic structure and properties of the atom and its parts and they also understood that atomic particles, and sometimes nuclei themselves, spin on their axes, generating a magnetic field. Over the ensuing decades, physicists explored the magnetic properties of atoms and molecules to further understand how nuclei are affected by neighboring atoms and how atoms are bound together to form molecules. Otto Stern and Walther Gerlach found in 1921 that the application of a strong magnetic field to an atom would align its nucleus with or against the magnetic field. Isidor Isaac Rabi and his colleagues at Columbia, building on this knowledge, developed during the 1930s a technique called molecular beam magnetic resonance that allowed them to “see” the internal structure of molecules, work that led to the Nobel Prize for Rabi in 1944. In 1945, teams led by Felix Bloch and Edward Purcell, working independently of each 23   Vannevar Bush, Science—The Endless Frontier: A Report to the President, Washington, D.C.: U.S. Government Printing Office, 1945. 24   Frank Press, “Science and Technology in the White House, 1977 to 1980: Part 1,” Science 211: 139-145 (1981), and “Science and Technology in the White House, 1977 to 1980, Part 2,” Science 211: 249-256 (1981). President Carter argued that, after years of declining research support, his Administration provided an 11 percent real increase in funding for long-term research that would “harness the American genius for innovation to meet the economic, energy, health, and security challlenges that contront our nation.” James Earl Carter, State of the Union, 1981, http://odur.let.rug.nl/~usa/P/jc39/speeches/su81jec.htm. 25   U.S. House of Representatives, Committee on Science, Unlocking our Future: Toward a New National Science Policy, September 24, 1998. Committee for Economic Development, America's Basic Research: Prosperity through Discovery, New York: Committee for Economic Development, 1998. Council on Competitiveness, Going Global: The New Shape of American Innovation, Washington, D.C.: Council on Competitiveness, 1998. 26   Michael McGeary and Philip M. Smith, “The R&D Portfolio: A Concept for Allocating Science and Technology Funds, ” Science, 274: 1484–1485 (1996). 27   Ralph Gomory, “An Unpredictability Principle for Basic Research,” in AAAS, Science and Technology Yearbook, 1995, Washington, D.C.: AAAS, 1995, pp. 5–17. 28   Ibid., pp. 6–7.

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OBSERVATIONS ON THE PRESIDENT'S FISCAL YEAR 2003: FEDERAL SCIENCE AND TECHNOLOGY BUDGET As the Administration extends the application of applied R&D criteria throughout the government for use in the development of the FY 2004 budget, it should be mindful of the difference between a focus on “performance” and a focus on “leadership.” Performance measures that focus too heavily on near-term results may provide strong incentives to focus on conservative goals. Performance measures that focus on results without assessing whether a program has adequate funding may penalize a program by decreasing its funding, when, in fact, the program requires increased funding. A focus on leadership, in contrast, would examine the adequacy of funding, the ability to promote risky research on the frontiers of knowledge that may or may not produce anticipated results, whether the infrastructure of science is sufficient, and the development of science and engineering human resources for the future. The goal of federal funding for research is to maintain a science and engineering enterprise that is world-class across fields and preeminent in fields relevant to national priorities. The Administration should also be mindful of the alternatives for reviewing research programs. Collection of data from R&D managers about their programs is one vehicle for collecting information useful to a program review. However, external review of agency programs can serve as an additional, and potentially valuable, tool for ensuring that federal funds for research are being properly managed and directed toward important national goals and long-term needs and opportunities. External review can take many forms. For example, in 1959, the National Bureau of Standards (now NIST) requested the NRC establish a standing board to conduct periodic and continuing reviews of its laboratory programs. The most recent of these reviews examined NIST 's Measurement and Standards Laboratory in 2001.40 As another example, the National Science Foundation, under its GPRA plan, relies on its traditional external Committees of Visitors to review the integrity of its process and the quality of its results over a three-year period, examining one-third of its portfolio each year.41 In the long run, however, both the Administration and Congress should consider how to improve the process for drawing on expert advice for identifying the key areas of investment in science and engineering. The National Science Board, in Federal Research Resources: A Process for Setting Priorities, has outlined a framework that places a priority on investments that advance important national goals, are ready to benefit from greater investment, address long-term needs and opportunities for federal missions and responsibilities, and ensure world-class science and engineering across fields in the United States. This process would “incorporate input from federal departments and agencies, advisory mechanisms of the National Academies, scientific community organizations representing all sectors, and a global perspective on opportunities and needs for U.S. science and technology.” The recommendations from this NSB report are provided in Appendix B of this report.42 A key mechanism for obtaining input from the scientific community with regard to specific fields is the process of international benchmarking. As described above, benchmarking yields valuable insights for policy makers and is a type of review that can be undertaken in a cost-effective manner.43 The Administration should consider the range of options available to ensure that programs are evaluated properly and in a manner that creates incentives for world-class research. CONCLUSION The U.S. Office of Management and Budget has developed an effective approach for conceptualizing and tabulating federal investments in science and technology across the federal government—the Federal Science and Technology Budget—that is consistent with a process for managing and targeting federal funding for science andtechnology programs across federal agencies that the NRC outlined in Allocating Federal Funds for Science and Technology. This approach allows the Executive Office of the President to articulate a vision for science and 40   See for example, National Research Council, An Assessment of the National Institute of Standards and Technology Measurement and Standards Laboratory, Fiscal Year 2001, Washington, D.C.: National Academy Press, 2001. 41   National Academy of Sciences, National Academy of Engineering, Institute of Medicine, Implementing the Government Performance and Results Act for Research: A Status Report, Washington, D.C.: National Academy Press, 2001, p. 116. 42   National Science Board, Federal Research Priorities, p. 4. 43   National Academy of Sciences, National Academy of Engineering, Institute of Medicine, Experiments in International Benchmarking of U.S. Research Fields , Washington, D.C.: National Academy Press, 2000.

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OBSERVATIONS ON THE PRESIDENT'S FISCAL YEAR 2003: FEDERAL SCIENCE AND TECHNOLOGY BUDGET technology across the federal government by establishing short- and long-term priorities. This approach also allows the Administration to analyze funding for science and technology as a long-term portfolio of investments for the future. Although the Administration has established key FS&T priorities for FY 2003, it has not addressed the issue of adequacy of funding across the FS&T portfolio. It has identified areas where priority-driven research can contribute to the advancement of important national goals and agency missions. It has not, however, focused in this budget proposal on the potential of discovery-oriented research across science and engineering fields. Indeed, the downward trends in budgets for certain agencies have cut funding for specific fields, particularly in the physical sciences and engineering. Not only do these trends affect the amount of research that can be conducted in the short run, but they put at risk the capacity of the nation's colleges and universities to attract and educate students in key scientific sand engineering disciplines. Because FS&T investments and graduate education are closely linked, the reductions in research funding have led to a decreased enrollment of graduate students that poses serious concerns about the nation 's strength in science and technology. The Administration and Congress should revisit the FS&T budget proposals as well, in light of the recommendations of Making the Nation Safer. This report outlines the potential impact of science and technology research in seven cross-cutting areas and argues “the realization of this potential will depend on a program of directed basic and applied research and will require an expansion and coordination of existing S&T programs and funding if the government's work is to produce effective tools for countering terrorism and ensuring homeland security.” (emphasis added)44 Moreover, the report notes that in order to realize the potential a “balance of investments is critical, across different time horizons as well as across numerous disciplines.”45 Although research on countering bioterrorism conducted by NIH will be productive, research carried out by other agencies, such as NSF, DOE, DOD, and NIST, can also contribute substantially to efforts to counter terrorist threats against the United States. Congress should give careful consideration to the role and funding of science and technology in the proposed Department of Homeland Security. The Administration has correctly identified the unfortunate practice of earmarking funds for research at specific institutions as a practice that must be curtailed. All of the resources available for science and engineering research must be utilized in their most effective manner, given the important national goals we face. Reducing earmarks is also the responsibility of the research community and must be addressed by following guidelines such as those endorsed by the Association of American Universities. In addition to eliminating earmarking, other steps must be taken to ensure that federal resources for science and technology are being spent in a productive manner. In developing and implementing its Research and Development Criteria, the administration should seek to verify that the science and technology programs it funds are directly related to the advancement of important national goals, produce high-quality research, and keep our nation among the world leaders in research across fields. External reviews provide one means for examining the efforts of a specific program. International benchmarking provides an important method for analyzing the status of U.S. science in particular fields. The Administration should consider mechanisms such as these as it moves forward with analyses of the outcomes of federal science and technology programs. 44   Ibid., pp. 332-334 45   Ibid.

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OBSERVATIONS ON THE PRESIDENT'S FISCAL YEAR 2003: FEDERAL SCIENCE AND TECHNOLOGY BUDGET Tables

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OBSERVATIONS ON THE PRESIDENT'S FISCAL YEAR 2003: FEDERAL SCIENCE AND TECHNOLOGY BUDGET TABLE 1 Federal Science and Technology Budget, FY 2000–FY 2003 (millions of current dollars) AGENCIES 2000 Actual 2001 Actual 2002 Est. 2003 Proposed FY 2001– FY 2002 (Percent Change) FY 2002– FY 2003 (Percent Change) National Institutes of Health 17,827 20,438 23,433 27,335 14.7% 16.7% NASA 7,013 7,789 8,113 8,774 4.2% 8.1% Space Science 2,606 2,760 3,034 3,428 9.9% 13.0% Earth Science 1,734 1,825 1,695 1,639 –7.1% –3.3% Biological and Physical Research 839 944 828 851 –12.3% 2.8% Aero-space technology 1,834 2,260 2,556 2,856 13.1% 11.7% National Science Foundation 3,903 4,437 4,795 5,036 8.1% 5.0% Dept. of Energy 4,338 4,911 5,099 5,027 3.8% –1.4% Science Programs 2,820 3,218 3,240 3,285 0.7% 1.4% Renewable Energy 306 370 386 408 4.3% 5.7% Nuclear Energy 226 261 244 251 –6.5% 2.9% Energy Conservation 577 619 641 589 3.6% –8.1% Fossil Energy R&D 409 443 588 494 32.7% –16.0% Dept. of Defense 4,541 4,944 4,961 4,952 0.3% –0.2% Basic Research (6.1) 1,136 1,271 1,305 1,336 2.7% 2.4% Applied Research (6.2) 3,405 3,673 3,656 3,616 –0.5% –1.1% Dept. of Agriculture 1,759 1,885 1,890 1,913 0.3% 1.2% CSREES Research and Education 488 514 552 563 7.4% 2.0% Economic Research Service 67 69 70 82 1.4% 17.1% Mandatory Research Grants 120 120 0 0 –100.0% 0.0% Agricultural Research Service 866 936 1,017 1,014 8.7% –0.3% Forest Service 218 246 251 254 2.0% 1.2% Dept. of the Interior (USGS) 847 918 950 904 3.5% –4.8% Dept. of Commerce 826 828 948 861 14.5% –9.2% NOAA (Oceanic/Atmospheric Research) 285 325 362 297 11.4% –18.0% NIST 541 503 586 564 16.5% –3.8% Environmental Protection Agency 683 746 750 797 0.5% 6.3% Dept. of Transportation 593 521 651 548 25.0% –15.8% Highway Research 490 387 448 421 15.8% –6.0% Aviation Research 103 134 203 127 51.5% –37.4% Dept. of Education 317 363 377 431 3.9% 14.3% Special Educ. Research and Innovation 64 77 78 78 1.3% 0.0% NIDRR 86 100 110 110 10.0% 0.0% Res., Dev., and Dissemination 167 186 189 243 1.6% 28.6% Dept. of Veterans Affairs 321 363 373 409 2.8% 9.7% FS&T Total 42,968 48,143 52,340 56,987 8.7% 8.9% NIH 17,827 20,438 23,433 27,335 14.7% 16.7% FS&T Total minus NIH 25,141 27,705 28,907 29,652 4.3% 2.6% NIH as percentage of FS&T Total 41.5% 42.5% 44.8% 48.0% — — Source: Budget of the United States Government, Fiscal Year 2003

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OBSERVATIONS ON THE PRESIDENT'S FISCAL YEAR 2003: FEDERAL SCIENCE AND TECHNOLOGY BUDGET TABLE 2 Federal Science and Technology Budget, FY 2000–FY 2003 (millions of constant FY 2002 dollars) AGENCIES 2000 Actual 2001 Actual 2002 Est. 2003 Proposed FY 2001– FY 2002 (Percent Change) FY 2002– FY 2003 (Percent Change) National Institutes of Health 18,640 20,887 23,433 26,852 12.2% 14.6% NASA 7,333 7,960 8,113 8,619 1.9% 6.2% Space Science 2,725 2,821 3,034 3,367 7.6% 11.0% Earth Science 1,813 1,865 1,695 1,610 –9.1% –5.0% Biological and Physical Research 877 965 828 836 –14.2% 1.0% Aero-space technology 1,918 2,310 2,556 2,806 10.7% 9.8% National Science Foundation 4,081 4,534 4,795 4,947 5.7% 3.2% Dept. of Energy 4,536 5,019 5,099 4,938 1.6% –3.2% Science Programs 2,949 3,289 3,240 3,227 –1.5% –0.4% Renewable Energy 320 378 386 401 2.1% 3.8% Nuclear Energy 236 267 244 247 –8.5% 1.0% Energy Conservation 603 633 641 579 1.3% –9.7% Fossil Energy R&D 428 453 588 485 29.9% –17.5% Dept. of Defense 4,748 5,053 4,961 4,864 –1.8% –1.9% Basic Research (6.1) 1,188 1,299 1,305 1,312 0.5% 0.6% Applied Research (6.2) 3,560 3,754 3,656 3,552 –2.6% –2.8% Dept. of Agriculture 1,839 1,926 1,890 1,879 –1.9% –0.6% CSREES Research and Education 510 525 552 553 5.1% 0.2% Economic Research Service 70 71 70 81 –0.7% 15.1% Mandatory Research Grants 125 123 0 0 –100.0% 0.0% Agricultural Research Service 905 957 1,017 996 6.3% –2.1% Forest Service 228 251 251 250 –0.2% –0.6% Dept. of the Interior (USGS) 886 938 950 888 1.3% –6.5% Dept. of Commerce 864 846 948 846 12.0% –10.8% NOAA (Oceanic/Atmospheric Research) 298 332 362 292 9.0% –19.4% NIST 566 514 586 554 14.0% –5.5% Environmental Protection Agency 714 762 750 783 –1.6% 4.4% Dept. of Transportation 620 532 651 538 22.3% –17.3% Highway Research 512 396 448 414 13.3% –7.7% Aviation Research 108 137 203 125 48.2% –38.5% Dept. of Education 331 371 377 423 1.6% 12.3% Special Education Res. and Innovation 67 79 78 77 –0.9% –1.8% NIDRR 90 102 110 108 7.6% –1.8% Res., Dev., and Dissemination 175 190 189 239 –0.6% 26.3% Dept. of Veterans Affairs 336 371 373 402 0.5% 7.7% FS&T Total 44,927 49,201 52,340 55,979 6.4% 7.0% NIH 18,640 20,887 23,433 26,852 12.2% 14.6% FS&T Total minus NIH 26,287 28,314 28,907 29,128 2.1% 0.8% NIH as percentage of FS&T Total 41.5% 42.5% 44.8% 48.0% — — Source: Budget of the United States Government, Fiscal Year 2003 Note: Deflators used to convert current dollar to constant FY 2002 dollars are derived from the GDP (chained) price index in Table 10.1, in U.S. Office of Management and Budget, Budget of the United States Government, Fiscal Year 2003: Historical Tables, Washington, D.C.: U.S. GPO, 2002.

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OBSERVATIONS ON THE PRESIDENT'S FISCAL YEAR 2003: FEDERAL SCIENCE AND TECHNOLOGY BUDGET TABLE 3 Proposed Percent Change in Constant Dollars in FS&T Spending for Agencies and for Science Programs, FY 2002–FY 2003   Percent Change, FY 2002–FY 2003 AGENCIES   Dept. of Health & Human Services (NIH) 14.6% Dept. of Education 12.3% Dept. of Veterans Affairs 7.7% FS&T TOTAL 7.0% NASA 6.2% Environmental Protection Agency (EPA) 4.4% National Science Foundation (NSF) 3.2% FS&T minus NIH 0.8% Dept. of Agriculture –0.6% Dept. of Defense –1.9% Dept. of Energy –3.2% Dept. of the Interior (USGS) –6.5% Dept. of Commerce –10.8% Dept. of Transportation –17.3% PROGRAMS   USED Research, Development, and Dissemination 26.3% USDA Economic Research Service 15.1% NASA Space Science 11.0% NASA Aero-space technology 9.8% FS&T TOTAL 7.0% DOE Renewable Energy 3.8% DOE Nuclear Energy 1.0% NASA Biological and Physical Research 1.0% FS&T minus NIH 0.8% DOD Basic Research (6.1) 0.6% USDA CSREES Research and Education 0.2% USDA Mandatory Research Grants 0.0% DOE Science Programs –0.4% USDA Forest Service –0.6% USED Special Education Research and Innovation –1.8% USED NIDRR –1.8% USDA Agricultural Research Service –2.1% DOD Applied Research (6.2) –2.8% NASA Earth Science –5.0% NIST –5.5% DOI U.S. Geological Survey –6.5% DOT Highway Research –7.7% DOE Energy Conservation –9.7% DOE Fossil Energy R&D –17.5% NOAA (Oceanic and Atmospheric Research) –19.4% DOT Aviation Research –38.5% Source: Budget of the United States Government, Fiscal Year 2003 Note: Deflators used to convert current dollar to constant FY 2002 dollars are derived from the GDP (chained) price index in Table 10.1, in U.S. Office of Management and Budget, Budget of the United States Government, Fiscal Year 2003: Historical Tables, Washington, D.C.: U.S. GPO, 2002.

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OBSERVATIONS ON THE PRESIDENT'S FISCAL YEAR 2003: FEDERAL SCIENCE AND TECHNOLOGY BUDGET TABLE 4 Proposed Change in FS&T Spending by Department or Agency, FY 2002–FY 2003 (in millions of constant dollars) AGENCIES Change Dept. of Health and Human Services (NIH) 3,419 NASA 506 National Science Foundation 152 Dept. of Education 46 Environmental Protection Agency 33 Dept. of Veterans Affairs 29 Dept. of Agriculture –11 Dept. of the Interior (USGS) –62 Dept. of Defense –97 Dept. of Commerce –102 Dept. of Transportation –113 Dept. of Energy –161 FS&T Total 3,639 Source: Budget of the United States Government, Fiscal Year 2003 Note: Deflators used to convert current dollar to constant FY 2002 dollars are derived from the GDP (chained) price index in Table 10.1, in U.S. Office of Management and Budget, Budget of the United States Government, Fiscal Year 2003: Historical Tables, Washington, D.C.: U.S. GPO, 2002. TABLE 5 Multi-Agency R&D Initiatives, FY 2001–FY 2003 (millions of constant FY 2002 dollars) MULTI-AGENCY R&D INITIATIVES 2001 Actual 2002 Est. 2003 Proposed FY 2001– FY 2002 (Percent Change) FY 2002– FY 2003 (Percent Change) Networking and IT R&D 1,805 1,844 1,857 2.2% 0.7% National Nanotechnology Initiativea 474 579 667 22.1% 15.2% Climate Change Research 1,766 1,670 1,723 –5.4% 3.2% aClimate Change Research includes both the U.S. Global Change Research Program and the proposed Climate Change Research Initiative. Source: Budget of the United States Government, Fiscal Year 2003 Note: Deflators used to convert current dollar to constant FY 2002 dollars are derived from the GDP (chained) price index in Table 10.1, in U.S. Office of Management and Budget, Budget of the United States Government, Fiscal Year 2003: Historical Tables, Washington, D.C.: U.S. GPO, 2002.

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OBSERVATIONS ON THE PRESIDENT'S FISCAL YEAR 2003: FEDERAL SCIENCE AND TECHNOLOGY BUDGET TABLE 6 Federal Science and Technology Budget, FY 2001 Actual, FY 2002 Administration Proposal, and FY 2002 Congressional Appropriation (constant FY 2002 dollars) AGENCIES 2001 Actual 2002 Proposed Proposed Increase 2002 Est. Actual Increase National Institutes of Health 20,438 23,112 13.1% 23,433 14.7% NASA 7,789 7,038 –9.6% 8,113 4.2% National Science Foundation 4,437 4,472 0.8% 4,795 8.1% Dept. of Energy 4,911 4,682 –4.7% 5,099 3.8% Dept. of Defense 4,944 4,963 0.4% 4,961 0.3% Dept. of Agriculture 1,885 1,759 –6.7% 1,890 0.3% Dept. of the Interior (USGS) 918 813 –11.4% 950 3.5% Dept. of Commerce 828 711 –14.1% 948 14.5% Environmental Protection Agency 746 679 –9.0% 750 0.5% Dept. of Transportation 521 631 21.1% 651 25.0% Dept. of Education 363 368 1.4% 377 3.9% Dept. of Veterans Affairs 363 360 –0.8% 373 2.8% FS&T Total 48,143 49,588 3.0% 52,340 8.7% NIH 20,438 23,112 13.1% 23,433 14.7% FS&T Total minus NIH 27,705 26,476 –4.4% 28,907 4.3% Source: Budget of the United States Government, Fiscal Year 2003 Note: Deflators used to convert current dollar to constant FY 2002 dollars are derived from the GDP (chained) price index in Table 10.1, in U.S. Office of Management and Budget, Budget of the United States Government, Fiscal Year 2003: Historical Tables, Washington, D.C.: U.S. GPO, 2002.

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