1. U.S. Federal Budget for Research & Development
Josh Shiode @joshshiode
February 18, 2017
For the AAAS Annual Meeting (#AAASmtg)
AAAS Office of Government Relations

2. 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

3. 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 AAAS

4. 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

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

6. (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

7. 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

8. 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 **Base budget only. Based on historical agency budget data. © 2017 AAAS

9. 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 Projected deficit is $503 billion. © 2016 AAAS

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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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

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

20. 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

21. 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

22. 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 Projected deficit is $503 billion. © 2016 AAAS

23. 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?

24. 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 Spending level beyond that based on CBO projections.
Based on past budget proposals, the Budget Control Act, and subsequent legislation. © 2016 AAAS

25. 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

26. 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

27. The President proposes
and Congress disposes.

28. 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

29. 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

30. 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”

31. 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?

32. 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?

33. 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?

34. 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?

35. 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

36. 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

37. 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

38. The AAAS R&D Budget and Policy Program
Our resources

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

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

41. 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…

42. Experts you can contact!
Matt Hourihan Director, R&D Budget and Policy Program Josh Shiode Senior Government Relations Officer, AAAS Office of Government Relations

43. Extra Slides

44. 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

45. 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

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

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