The Federal R&D Budget: Process and Perspectives Matt Hourihan November 14, 2016 For the AAAS S&T Policy Leadership Seminar AAAS R&D Budget and Policy Program http://www.aaas.org/program/rd-budget-and-policy-program

The Federal Budget is Kind Of a Big Deal “Politics is who gets what, when, and how.” - Harold Lasswell “Budgeting is about values, and it’s about choices.” – Rep. Rosa DeLauro Every dollar in the budget has its claimants! Negotiation between competing interests (and their proxies) in a decentralized system Major impact for R&D and innovation: most basic research, and most university research, is federally funded

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

Budget Process in Regular Order: Three Years, Four Phases Phase 4: Execute the fiscal year’s budget (not shown) Note: different timing in transition year! Arranged by fiscal year (October to September)

The Federal Budget Cycle Phase 1: Internal agency discussions and planning Strategic plans, staff retreats, program assessments OMB is present throughout Agencies deliver budget justifications to OMB (early fall)

One Agency’s R&D Budget Agency Budgeting Coordination and Top-Down Guidance One Agency’s R&D Budget Decentralized planning and scientific input

The Federal Budget Cycle Phase 2: OMB performs multi-stage review, responds to agencies (“passbacks”) Agencies and agency heads can and do negotiate Budget proposals are finalized in January President presents the proposed budget to Congress early February

The Federal Budget Cycle Phase 3: Congress gets involved Receives and reacts to President’s budget, holds hearings Approves budget resolution (simple majority) Writes and passes appropriations

Natural Resources Cmte House Budget Cmte Natural Resources Cmte Approps Cmte Subc on Interior + Env Subc on Energy + Water Energy + Commerce Cmte Senate Energy and Nat Res Cmte Env and Pub Works Cmte And many others… Also revenue (tax) committees (House Ways and Means, Senate Finance)

Natural Resources Cmte House Budget Cmte Natural Resources Cmte Approps Cmte Subc on Interior + Env Subc on Energy + Water Energy + Commerce Cmte Senate Energy and Nat Res Cmte Env and Pub Works Cmte Budget Committees

The Budget Resolution Established by 1974 Congressional Budget Act Overall framework Discretionary spending Also revenue, deficit, and total spending targets Also non-binding recommendations from majority Isn’t law and can’t change law, but can set up reconciliation instructions The budget resolution is a political document (and therefore, often not passed!)

Natural Resources Cmte House Budget Cmte Natural Resources Cmte Approps Cmte Subc on Interior + Env Subc on Energy + Water Energy + Commerce Cmte Senate Energy and Nat Res Cmte Env and Pub Works Cmte Appropriations Committees

From Budget to Appropriations Committees Budget Resolution limits  Approps Committees  Subcommittees [302(b) allocations] These caps remain in place all the way to floor, but can be revised as needed Twelve Appropriations Subcommittees Eight subcommittees responsible for at least $1 billion of R&D Approps led by “Cardinals” Committee Chairs: Rep. Hal Rogers (KY), Sen. Thad Cochran (MS) Ranking Members: Rep. Nita Lowey (NY), Sen. Barbara Mikulski (MD) Appropriators will often have their own priorities “There are three parties: Democrats, Republicans, and appropriators” “President proposes, Congress disposes”

Defense House Senate Chair Rodney Frelinghuysen (NJ) Thad Cochran (MS) Ranking Member Pete Visclosky (IN) Dick Durbin (IL) Over $500 billion Tradeoffs: balancing force modernization, readiness, personnel costs, RDT&E (and medical research) Offset Strategy War funding

Energy & Water ~$40 billion House Senate Chair Mike Simpson (ID) Lamar Alexander (TN) Ranking Member Marcy Kaptur (OH) Dianne Feinstein (CA) ~$40 billion Tradeoffs: Balancing basic research and facilities, DOE technology portfolio, NNSA; also Army Corps, Bureau of Reclamation Highly partisan debates over energy technologies (renewables vs. nuclear vs. fossil) Have mostly embraced new research and innovation models at DOE

Labor, HHS, Education >$150 billion House Senate Chair Tom Cole (OK) Roy Blount (MO) Ranking Member Rosa DeLauro (CT) Patty Murray (WA) >$150 billion Deep divisions – especially Obamacare 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? Success rates?

Commerce, Justice, Science House Senate Chair John Culberson (TX) Richard Shelby (AL) Ranking Member Mike Honda (CA) Barbara Mikulski (MD) ~$55 billion Tradeoffs: Balancing Depts. of Justice and Commerce, NASA, NSF NSF: social and geo science funding? Facilities? NASA: planetary exploration, climate research, human spaceflight (and where do we fly to?) Commerce: NOAA climate research and NIST industrial technology programs can be controversial

Agriculture ~$20 billion House Senate Chair Robert Aderholt (AL) Jerry Moran (KS) Ranking Member Sam Farr (CA) Jeff Merkley (OR) ~$20 billion Funds most USDA (but not Forest Service); also FDA Balancing between conservation, public assistance, food safety Research activities often take secondary prominence Fragmented? Formula funds or competitive grants? Once a big source of pork via earmarks

Interior & Environment House Senate Chair Ken Calvert (CA) Lisa Murkowski (AK) Ranking Member Betty McCollum (MN) Tom Udall (NM) ~$30 billion Includes: Dept. of the Interior, EPA; also Forest Service; small bit goes to NIH Another divisive bill: environmental protection, land use, emissions regulation, wildfire management and response Again, science funding tends to take secondary prominence (U.S. Geological Survey, EPA S&T)

The Federal Budget Cycle 302(b) allocations to the 12 appropriations subcommittees Approps committees write/approve 12 appropriations bills Bills have to pass both chambers Can be amended (subject to caps) Differences are resolved in conference committee Can be filibustered “President proposes, Congress disposes”

Other Legislative Appropriations Tools Continuing Resolutions …with depressing regularity Uncertainty? New starts? Omnibus Or minibus, or megabus, or cromnibus, or… Supplementals i.e. Zika, Ebola, Hurricane Sandy Also war funding Not subject to spending caps

The Federal Budget Cycle Gov’t is usually working on 3 budgets at any given time However, presidential transitions complicates things…

Looking Ahead Good approps progress but regular order broke down, because of course it did CR through Dec. 9 Included Zika funding And full-year MilCon Next: Pass now or punt until spring? March: Debt ceiling. Ugh. President Trump’s first budget: research? Infrastructure? Where does discretionary spending end up in FY 2018?

For more info… mhouriha@aaas.org 202-326-6607 http://www.aaas.org/program/rd-budget-and-policy-program