U.S. Federal Budget for Research & Development Josh Shiode @joshshiode February 18, 2017 For the AAAS Annual Meeting (#AAASmtg) AAAS Office of Government Relations https://www.aaas.org/program/govrelations

Industry funds about 2/3 of total U. S Industry funds about 2/3 of total U.S. R&D today, but much more D than R Source: NSF National Patterns of R&D Resources series © 2015 AAAS as percent of GDP R&D funding Total Federal Industry Other

Other nations are increasingly prioritizing R&D as percent of GDP, especially to the east S. Korea Finland Japan Taiwan Germany U.S. France EU-28 China UK S. Korea Japan as percent of GDP Total R&D U.S. EU-28 China Source: OECD, Main Science and Technology Indicators, Feb. 2017. © 2017 AAAS

The federal government funds the majority of research in the U.S. Source: NSF National Patterns of R&D Resources series © 2015 AAAS Research funding as percent of GDP Total Federal Industry Other

A look at the Past eight years Science & technology budgets under President Obama A look at the Past eight years

(corrected for inflation) Nondefense science agency budgets saw mixed results in the Obama era thanks to larger budget trends DOE Science DOE Technology Programs NSF NASA NIH USDA R&D Percent change from FY 2008 (corrected for inflation) *Includes nuclear, fossil, efficiency and renewables, grid research, and ARPA-E. FY 2009 includes Recovery Act funding. Based on AAAS analyses of historical agency data. © 2017 AAAS

Percent change from prior year The President mostly requested large increases for R&D, but Congress holds power of the purse President’s Request Percent change from prior year Actual Change Average Nondefense R&D Request Based on historical OMB budget authority tables. Average nondefense R&D request © 2017 AAAS

Percent change from prior year Example: The ups and downs of the National Institutes of Health budget (NIH) NIH Request Percent change from prior year Actual Change *Flat funding requested in FY 2013. **Base budget only. Based on historical agency budget data. © 2017 AAAS

The federal government is “an insurance company with an army” costing ～$4T in FY 2017 *Approximately $4 billion for R&D is classified as mandatory spending. Figures are estimates. Source: Budget of the United States Government FY 2017. Projected deficit is $503 billion. © 2016 AAAS

Two kinds of spending “Mandatory” Essentially on autopilot (“formula- funded”) “Mandatory” Requires act of Congress to change Political “third” rail Mostly entitlements

The overwhelming trend in the federal budget is growing mandatory spending Net Interest Mandatory Nondefense Discretionary Defense Spending as percent of GDP Source: Budget of the U.S. Government FY 2017. © 2016 AAAS

Two kinds of spending “Discretionary” Requires Congress to pass bills to fund at all Can make this easy target for cuts Most federal R&D funding lives here

Recent cuts to discretionary spending began in FY 2010 Actual base budget authority Billions of constant 2016 dollars Based on past budget resolutions, the Budget Control Act, and subsequent legislation. Adjusted for inflation using deflators from the FY17 budget request. Excludes war funding proposals. © 2016 AAAS

The Budget Control Act capped discretionary spending for 10 years, with “sequester” for further cut Actual base budget authority BCA: initial pre-sequestration baseline Billions of constant 2016 dollars BCA: sequestration baseline Based on past budget resolutions, the Budget Control Act, and subsequent legislation. Adjusted for inflation using deflators from the FY17 budget request. Excludes war funding proposals. © 2016 AAAS

Bipartisan budget deals in 2013 and 2015 allowed partial relief from the sequestration baseline caps BCA: initial pre-sequestration baseline Billions of constant 2016 dollars Actual base budget authority BCA: sequestration baseline Based on past budget resolutions, the Budget Control Act, and subsequent legislation. Adjusted for inflation using deflators from the FY17 budget request. Excludes war funding proposals. © 2016 AAAS

Absent another deal, set to return to the sequestration caps for FY 2018 and beyond Actual base budget authority BCA: initial pre-sequestration baseline Billions of constant 2016 dollars Current law after FY17 BCA: sequestration baseline Based on past budget resolutions, the Budget Control Act, and subsequent legislation. Adjusted for inflation using deflators from the FY17 budget request. Excludes war funding proposals. © 2016 AAAS

Federal R&D budgets follow the discretionary budget overall Base discretionary caps DOE Applied Programs NSF DOE Science NIH NASA USDA R&D DOD S&T Percent change from FY 2010 (corrected for inflation) *Includes EERE, OE, Fossil, Nuclear; excludes ARPA-E (regular appropriations began in FY 2011). Based on AAAS analyses of historical OMB, agency, and appropriations data and the President’s FY 2017 request. © 2016 AAAS

Nondefense discretionary spending ultimately a lower priority for all in Obama years and thus R&D gains largely unrealized While the President’s requests were regularly unfulfilled, appropriators often funded research…when there was fiscal room “All politics is local” Competitiveness, health, energy independence, national security However, still disagreement, i.e.: Climate science Social science Applied tech: energy, manufacturing Duplication, role of government, waste, accountability, transparency

What do we know, and when will we know it? What lies ahead?

The federal budget process is complex, overlapping, but follows a process… Budget and Appropriations Process in House and Senate Formulate and Introduce President’s Budget Request Agency Planning Negotiate and finalize budget proposal w/OMB via passbacks Budget Release Write, pass, and conference twelve appropriations bills Execute Fiscal Year Budget Budget Resolution 302(a) & (b) alloc. Hearings CR Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep FY 2017 FY 2018 FY 2019 CR? Omnibus? Basically a push pull process between White House, agencies, Congress with stakeholder input at all levels/stages Start of Calendar Year 2017 We are here. Start of Calendar Year 2018

White House Department of Defense NSF (1/2 scale) NASA OMB OSTP White House NSF Department of Defense (1/2 scale) NASA Depts/agencies fight for their things; OMB watches over big picture issues, Pres priorities Department of Energy

Back and forth results in a President’s Budget Request in Feb (Apr/May in transition years) covering all spending *Approximately $4 billion for R&D is classified as mandatory spending. Figures are estimates. Source: Budget of the United States Government FY 2017. Projected deficit is $503 billion. © 2016 AAAS

So what about the FY 2018 budget So what about the FY 2018 budget? Largely unanswered questions at this point. Defense/Nondefense mix? “Penny Plan” Based on prior proposals, possible (but not certain) targets might include: Climate science (NASA, DOE, elsewhere?) Energy science and technology Advanced Manufacturing EPA Other applied research? Discovery science relatively safe? Rhetoric vs. reality? If the Administration seeks to blow a hole in the nondefense discretionary budget – how does Congress react?

Severely austere budgets have been reported as potential influences on Trump White House Past years Current caps beyond FY 2017 BCA: sequestration baseline Billions of constant 2016 dollars for Nondefense spending FY17 House Budget FY17 RSC Budget *Current caps extend to FY 2021. Spending level beyond that based on CBO projections. Based on past budget proposals, the Budget Control Act, and subsequent legislation. © 2016 AAAS

Note: these are potential influences not certainties Reported influences would cut largely applied research & development in energy, climate, environment Note: these are potential influences not certainties Not mentioned at all: NIH, NASA, NSF, USDA research programs Targeted for cuts/elimination: DOE applied technology programs & climate/bio research DOD non-combat research Commerce technology development programs EPA research

Congress White House Transmit PBR to Congress Department of Defense OMB OSTP Senate House Congress White House Transmit PBR to Congress Department of Defense (1/2 scale) NSF Department of Defense (1/2 scale) NASA OMB gets proposals from each agency, pores over them for > month, passes back (note proportionality Department of Energy

The President proposes and Congress disposes.

Congress is organized into committees Senate House of Representatives Commerce, Science, & Transpo Cmte Science, Space, & Technology Cmte Budget Committee Budget Committee Add slide highlighting Approps Appropriations Committee Appropriations Committee + Many other committees + Many other committees

From Budget to Appropriations to 12 subcommittees Dept. of Education (Ed) Appropriations Committees Commerce, Justice, Science, and Related Agencies (CJS) Energy & Water Development, and Related Agencies (E&W) Labor, Health and Human Services, Education, and Related Agencies (Labor-H) Others… NASA NSF DOE Total Discretionary Allocation Budget Committees Subcommittee allocations DOJ Commerce Army Corps of Engineers NIH FDA Dept. of Labor Here’s how this is supposed to work Focus here on competition - add DOJ, Commerce, other competing interests

From Budget  Appropriations Congress has the power of the purse Twelve appropriations subcommittees in each chamber Decentralized: Eight subcommittees responsible for at least $1 billion of R&D Approps led by “Cardinals” Committee Chairs: Rep. Rodney Frelinghuysen (NJ), Sen. Thad Cochran (MS) Ranking Members: Rep. Nita Lowey (NY), Sen. Patrick Leahy (VT) Appropriators will often have their own priorities “President proposes, Congress disposes”

The Energy & Water Subcommittee faces major questions around R&D in their jurisdiction House Senate Chair Mike Simpson (ID) Lamar Alexander (TN) Ranking Member Marcy Kaptur (OH) Dianne Feinstein (CA) ~$40 billion Challenge: balancing basic research, DOE tech portfolio, NNSA; also Army Corps, Bureau of Reclamation Questions: What happens to applied tech? Does support for science programs (physics, bio, others) continue?

The Labor, HHS, Education Subcommittee is one of the most controversial, but NIH is very popular House Senate Chair Tom Cole (OK) Roy Blount (MO) Ranking Member Rosa DeLauro (CT) Patty Murray (WA) >$150 billion Deep divisions over public health programs, education, DOL Usually one of the hardest to pass, thus usually one of the last out of the gate Everybody likes NIH lately Especially Alzheimer’s research Cancer moonshot?

The Commerce, Justice, Science Subcommittee faces questions about future of NASA, Commerce technology programs House Senate Chair John Culberson (TX) Richard Shelby (AL) Ranking Member Jose Serrano (NY) Jeanne Shaheen (NH) ~$55 billion Challenge: balancing Depts. of Justice and Commerce, NASA, NSF Questions: NSF: social and geo science funding? Facilities? NASA: what happens to earth science? Human spaceflight? (and where do we go?) Commerce: What happens to NOAA climate research and NIST commercial technology programs?

The Agriculture Subcommittee has recently been growing its competitive research portfolio, will that continue? House Senate Chair Robert Aderholt (AL) John Hoeven (ND) Ranking Member Sanford Bishop (GA) Jeff Merkley (OR) ~$20 billion Funds most USDA (but not Forest Service); also FDA Balancing between conservation, public assistance, food safety Questions: Does growth for competitive grants continue? Do formula funds remain lower priority?

FY 2017 appropriations in holding pattern and FY 2018 very unclear Appropriations stuck since fall Trump Admin budget amendment coming in…March? SecDef: 30-day readiness review Will result in a tweak of the final Obama budget, with defense spending increase Current CR runs out April 28 FY 2018 February (?): budget outline Late April (?): full request Appropriations: typically late spring/summer, into fall…and beyond Also: debt ceiling deadline in March

Total discretionary spending is capped at least through FY 2021 Actual base budget authority BCA: initial pre-sequestration baseline Billions of constant 2016 dollars Current law after FY17 BCA: sequestration baseline Based on past budget resolutions, the Budget Control Act, and subsequent legislation. Adjusted for inflation using deflators from the FY17 budget request. Excludes war funding proposals. © 2016 AAAS

But remember, Congress “disposes” & has been able to craft bipartisan deals to provide relief Actual base budget authority BCA: initial pre-sequestration baseline Billions of constant 2016 dollars ?? Current law after FY17 BCA: sequestration baseline Based on past budget resolutions, the Budget Control Act, and subsequent legislation. Adjusted for inflation using deflators from the FY17 budget request. Excludes war funding proposals. © 2016 AAAS

The AAAS R&D Budget and Policy Program Our resources

We aim to provide timely, independent analyses of both federal and non-federal R&D budget information

Recently created interactive data dashboard empowers you to create and export your own charts and tables

And not only that, but… We have an email list for regular updates Deep historical data charts and tables Yearly comprehensive reports on the President’s budget requests and congressional appropriations Presentation slides for downloading and use (with attribution please!) And…

Experts you can contact! Matt Hourihan Director, R&D Budget and Policy Program mhouriha@aaas.org / @MattHourihan http://www.aaas.org/program/rd-budget-and-policy-program Josh Shiode Senior Government Relations Officer, AAAS jshiode@aaas.org / @JoshShiode Office of Government Relations http://www.aaas.org/program/govrelations @AAAS_GR

Extra Slides

But, Federal R&D funding at historically low levels as fraction of the size of our economy is Total Defense Nondefense R&D as percent of GDP Source: AAAS analyses of historical budget and agency data and the FY 2017 request. GDP figures from OMB. R&D includes conduct and facilities. © AAAS

Two Spending Categories: Discretionary vs. Mandatory Mandatory Spending (aka Direct Spending) Mostly entitlements, mostly on “autopilot” Potential for high political sensitivity = “third rail” New spending requires new legislation from the authorizing committees Discretionary Spending: Adjusted annually through appropriations bills via the appropriations committees Easy (nondefense) targets? i.e. Sequestration Vast majority of federal R&D is discretionary

Recent example: discussion of S&T impacts in budgets reportedly influencing Trump budget team

Celebrating silly, odd, or obscure-sounding federally funded research that has returned serious benefits to society.