1. The Federal R&D Budget Matt Hourihan September 6, 2016
For the AAAS S&T Policy 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

6. 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
Diffuse support = easy (nondefense) targets?
For example: Sequestration!
Vast majority of federal R&D is discretionary

9. Ongoing Politics: The “Pong” Model?
Protect social spending!
Reduce social spending!
The science and innovation budget

10. Congress in the Federal Budget Cycle
Congress has the Power of the Purse
U.S. Constitution, Article I, Section 9: “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.”

11. 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)

12. 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

13. The Budget Resolution Established by 1974 Congressional Budget Act
Overall framework
Discretionary spending
Also revenue, deficit, and total spending targets
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
Nine 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”
Tendency towards incrementalism

23. Congressional Budget Decisions…
“All politics is local”
Broader issues
Competitiveness, health, energy independence, national security, deficits, climate change politics
Concerns over balance, duplication, role of government, fiscal context, waste
Always tradeoffs…and always a need to get the bill passed
No concerted assessment of full R&D portfolio
Somewhat reactive by definition, given agency budgets come first

24. 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

25. 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

26. 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?

27. 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

28. 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

29. 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)

30. Appropriations Process
Budget Resolution Limits  Appropriations Committees  Subcommittees [302(b) allocations]
These caps are always in place throughout the process, but can be revised as needed
Information gathering:
Hearings with agency testimony
“Views and estimates” from other authorizing committees
Projections from CBO
Behind-the-scenes agency contact
Constituents, experts, lobbyists
Subcommittee  Committee  Floor
Can be amended throughout
Subject to 302(b) caps
Bills have to pass both chambers
Can be filibustered or vetoed
Differences are negotiated/resolved in conference committee

31. 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

32. 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
Authorizing Committees

33. Authorizations vs. Appropriations
Creates and modifies programs and policies
Sets funding ceilings
Can provide mandatory spending
Reconciliation bills
i.e. Bush-era tax cuts; certain fiscal elements of Obamacare
Appropriations
Provides funding to discretionary programs
Appropriating federal dollars is basically a two-step process
First authorization, then appropriation
However: unauthorized appropriations (and unfunded authorizations) are ever-present

34. Mandatory Spending: An Alternate Path for R&D?
Two current examples:
Diabetes Research (NIH)
Biomass R&D Program (USDA)
Proposals:
FY 2017 budget request
21st Century Cures
Potential challenges:
Shifting power away from appropriators
Can make it harder for Congress to intervene
PAYGO rules
Potential advantages:
Stability?

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

39. For more info…