1. The Federal R&D Budget: Process and Perspectives
Matt Hourihan
September 2, 2016
For the Albert Einstein Distinguished Educator Fellows
AAAS R&D Budget and Policy Program

2. 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

5. Broad Qualities of the System
Decentralization
Embeddedness
Incrementalism

7. 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

11. A Typical Federal Budget Process: Three Years, Four Phases
Phase 4: Execute the fiscal year’s budget (not shown)
Arranged by fiscal year (October to September)

12. 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)

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

14. 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

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

19. 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 more…

20. Authorizations vs. Appropriations
Creates and modifies programs
Sets funding ceilings
Under the jurisdiction of the topical legislative committees
Mandatory spending
Appropriations
Permits funding (power to incur obligations)
Under jurisdiction of Approps Committees
Can be multiyear or advance appropriations (i.e. Veterans)
>$250 million in unauthorized appropriations in 2012 (per CBO)

21. The Budget Resolution Overall spending framework
Discretionary spending figure is divvied up by appropriations committees
Budget resolution is a political document
Reconciliation instructions?

29. 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
Differences are resolved in conference committee
Can be filibustered
“President proposes, Congress disposes”

30. Congressional Budget Decisions
“All politics is local”
Broader issues (competitiveness, health, energy independence, national security, deficits)
Concerns over balance, duplication, role of government, fiscal context
Distributed responsibility:
Nine subcommittees responsible for at least $1 billion of R&D
No concerted assessment of full R&D portfolio

31. The Federal Budget Cycle
Gov’t is usually working on 3 budgets at any given time

32. Looking Ahead
Good approps progress but regular order broken down
Likely CR – how long? Omnibus?
Zika?
March: Debt ceiling. Ugh.

34. For more info…