1. The Federal R&D Budget: Process and Perspectives
Matt Hourihan
September 5, 2017
For the Albert Einstein Distinguished Educator Fellowships
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

3. Broad Qualities of the System
Decentralization
Embeddedness
Incrementalism

5. 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

8. 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)

9. 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)

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

11. 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

14. 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

15. 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)

16. 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

17. 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!)

21. 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

22. 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 responsible for >$1 billion of R&D
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
All politics is local
“There are three parties: Democrats, Republicans, and appropriators”
“President proposes, Congress disposes”

23. 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, national labs, DOE technology portfolio, NNSA; also Army Corps, Bureau of Reclamation
Partisan debates over energy technologies (renewables vs. nuclear vs. fossil)
Basic vs. applied? Climate research?

24. Commerce, Justice, Science
House
Senate
Chair
John Culberson (TX)
Richard Shelby (AL)
Ranking Member
Jose Serrano (NY)
Jeanne Shaheen (NH)
~$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?)
Commerce: NOAA climate research and NIST industrial technology programs controversial

25. The Federal Budget Cycle
Approps committees write/approve 12 appropriations bills
Bills have to pass both chambers
Can be amended (always subject to caps)
Funding changes or policy riders
Differences are resolved in conference committee
Can be filibustered

26. 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

27. The Federal Budget Cycle
Gov’t is usually working on 3 budgets at any given time
(However, presidential transitions complicate things)

28. Looking Ahead FY18 spending caps: Where do we end up?
House to vote on budget resolution in September? But…
Will need to work with Democrats on any deal to change the caps
FY18 appropriations:
House to finish omnibus this week?
Senate a bit further behind
Very mixed year
CR likely
What does White House think?
Debt ceiling? Tax reform? Health reform?
FY19: Guidance memo issued

30. For more info…