Transcript Research and Development in the FY 2010 Federal Budget

The Federal R&D
Budget: Process and
Perspectives
Matt Hourihan
April 11, 2013
for IAFF 2190W, Science, Technology, & Policy
George Washington University
AAAS R&D Budget and Policy Program
http://www.aaas.org/spp/rd
U.S. R&D INVESTMENT
FY 2013 Budget
by Source of Funds
Total Outlays = $3.8 trillion
Total Receipts (without borrowing) = $2.9 trillion
Borrowing
$901
Income Taxes
$1,359
Other Taxes (excise,
gas, estate, etc.)
$236
Social Insurance and
Retirement (Payroll
Taxes)
$959
Source: Budget of the United States Government FY 2013.
© 2012 AAAS
Corporate Taxes
$348
Federal
U.S. R&D INVESTMENT
Budget Deficit (or Surplus)
in billions of constant FY 2012 dollars
400
200
0
-200
-400
-600
-800
-1000
-1200
-1400
-1600
-1800
Unified budget (including Social Security)
Source: Budget of the United States Government, FY 2013.
FY 2012 data are estimates. FY 2013-2017 data are budget projections.
© 2012 AAAS
2015
2010
2005
2000
1995
1990
1985
1980
1975
1970
1965
1960
-2000
U.S. R&D INVESTMENT
U.S. R&D INVESTMENT
Two Spending Categories: Discretionary
vs. Mandatory
 Mandatory Spending (aka Direct Spending)
 Mostly entitlements
 Potential for high political sensitivity = “third rail”
 Changed only by act of Congress: essentially “on autopilot”
 Discretionary Spending:
 Adjusted annually
 Easy targets?
 i.e. Sequestration
 Vast majority of federal R&D is discretionary
U.S. R&D INVESTMENT
The Federal R&D Budget: The Basics
 About $130 billion in FY 2013
 Down ~17% since 2010
 About half = DOD
 Basic + applied research = nearly half
 Fragmented
 More than two dozen departments and agencies
 But “top heavy” (DOD and NIH)
 Funds ~60% of university R&D
 Declining share of economy
 Declining share of national R&D investment (vs. industry)
Character
U.S. R&D INVESTMENT
of R&D By Funder, 2009
Expenditures in billions of dollars
$300
$250
Development
$200
Applied
Research
$150
Basic
Research
$100
$50
$0
Federal
Industry
Source: NSF, National Patterns of R&D Resources
Figures are preliminary.
© 2012 AAAS
Other
U.S. R&D INVESTMENT
Recent R&D Budget History
 Historically large cuts this year
 Recent gains:
 Energy
 General Science
 Manufacturing
 Recent stagnation / declines
 Health
 Agriculture
 Environment
 Space
U.S. R&D INVESTMENT
Q: How Did We Get Here?
A: A convoluted, complicated, old
and evolving process…
----- Spend Fiscal Year Budget -----
Negotiate and finalize
FY 2014 budget proposal with
OMB via passbacks
• Budget
Resolution
• 302(a) and (b)
• Hearings
Write, pass, and
conference twelve
appropriation bills
----- Spend Fiscal Year Budget -----
Agencies
Negotiate and
• Budget
Write, pass, and
Agencies receive strategic submit
finalize budget
Resolution
Planning within Agency
conference twelve
guidance from OMB
budget proposal with OMB
• 302(a) and (b)
appropriation bills
proposals
via passbacks
• Hearings
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Budget
Release
FY 2015
Budget
Release
FY 2013
U.S. R&D INVESTMENT
The Federal Budget Cycle
Budget
Release
Agencies
Negotiate and
• Budget
Write, pass, and
Agencies receive strategic submit
finalize budget
Resolution
Planning within Agency
conference twelve
guidance from OMB
budget proposal with OMB
• 302(a) and (b)
appropriation bills
proposals
via passbacks
• Hearings
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
 Internal agency discussions
 Joint guidance memorandum from OMB / OSTP
 Defines focus areas, methods, strategy for boosts or cuts
 Agencies deliver budget justifications to OMB
U.S. R&D INVESTMENT
What Drives Presidential R&D Budget
Formulation?
 Incrementalism
 Administration priorities
 Program priorities & politics
 Expert and community input
 OMB oversight, OSTP input
 Also big (fiscal) picture
U.S. R&D INVESTMENT
The Federal Budget Cycle
Budget
Release
Agencies
Negotiate and
• Budget
Write, pass, and
Agencies receive strategic submit
finalize budget
Resolution
Planning within Agency
conference twelve
guidance from OMB
budget proposal with OMB
• 302(a) and (b)
appropriation bills
proposals
via passbacks
• Hearings
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
 Agencies negotiate with OMB (“passbacks”)
 Budget proposals are finalized in January
 President presents the proposed budget to Congress early February
U.S. R&D INVESTMENT
Total R&D
by Agency, FY 2013
budget authority in billions of dollars
Commerce, $2.6
All Other, $6.0
USDA, $2.3
Total R&D =
$142.2 billion
NSF, $5.9
NASA, $9.6
DOE, $11.9
DOD, $72.6
HHS (NIH), $31.4
Source: OMB R&D data, agency budget justifications, and other agency documents.
R&D includes conduct of R&D and R&D facilities.
© 2012 AAAS
FYINVESTMENT
2013 R&D
U.S. R&D
Budget Request by Function
percent change from FY 2003, in constant FY 2012 dollars
Commerce
25.6%
Energy
56.3%
Environment
-11.7%
General Science
27.6%
Space*
-4.3%
Health
Agriculture
-8.0%
-22.2%
Defense
-40%
-2.7%
-20%
0%
20%
40%
Source: OMB R&D data, agency budget justifications, and agency budget documents.
Environment includes natural resources R&D. *Space includes total discretionary budget,
minus aeronautics, for comparability.
© 2012 AAAS
60%
80%
U.S. R&D INVESTMENT
The Federal Budget Cycle
Budget
Release
Agencies
Negotiate and
• Budget
Write, pass, and
Agencies receive strategic submit
finalize budget
Resolution
Planning within Agency
conference twelve
guidance from OMB
budget proposal with OMB
• 302(a) and (b)
appropriation bills
proposals
via passbacks
• Hearings
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
 Congress holds budget hearings…
 IN THEORY - Approves budget resolution (simple majority)
 302(b) allocations to the 12 appropriations subcommittees
U.S. R&D INVESTMENT
U.S. R&D INVESTMENT
The Federal Budget Cycle
Budget
Release
Agencies
Negotiate and
• Budget
Write, pass, and
Agencies receive strategic submit
finalize budget
Resolution
Planning within Agency
conference twelve
guidance from OMB
budget proposal with OMB
• 302(a) and (b)
appropriation bills
proposals
via passbacks
• Hearings
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
 Approps committees write/approve 12 appropriations bills
 Bills have to pass both chambers (can be filibustered);
Differences are conferenced
 Continuing resolutions? Omnibus? Reconciliation?
Supplemental appropriations?
U.S. R&D INVESTMENT
Congress
House
Budget
Cmte
Senate
Approps
Cmte
Budget
Cmte
Approps
Cmte
Energy +
Commerce
Cmte
Subc on
Energy +
Water
Env and
Pub Works
Cmte
Subc on
Energy +
Water
Natural
Resources
Cmte
Subc on
Interior +
Env
Energy and
Nat Res
Cmte
Subc on
Interior +
Env
U.S. R&D INVESTMENT
Authorizations vs. Appropriations
 Authorization
 Creates and modifies programs.
 Includes funding ceilings BUT NOT actual funding.
 Under the jurisdiction of the topical legislative committees.
 i.e. America COMPETES and ARPA-E
 Appropriations
 Permits funding (specifically, incur obligations)
 Under the jurisdiction of the Appropriations Committees (each
with 12 subcommittees – one for each spending bill)
 Defense, Energy + Water, Interior, Labor/HHS/Eduction,
Agriculture, etc…
U.S. R&D INVESTMENT
What Drives Congressional Budget
Decisions?
 Incrementalism
 Local politics
 Effectiveness, balance,
duplication
 Role of government
 Workforce
 Topical vs. substantial
 The Big Fiscal Context
 “Annual Miracle”
U.S. R&D INVESTMENT
The Federal Budget Cycle
Negotiate and finalize
FY 2014 budget proposal with
OMB via passbacks
• Budget
Resolution
• 302(a) and (b)
• Hearings
Write, pass, and
conference twelve
appropriation bills
----- Spend Fiscal Year Budget -----
Agencies
Negotiate and
• Budget
Write, pass, and
Agencies receive strategic submit
finalize budget
Resolution
Planning within Agency
conference twelve
guidance from OMB
budget proposal with OMB
• 302(a) and (b)
appropriation bills
proposals
via passbacks
• Hearings
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Budget
Release
FY 2015
Budget
Release
----- Spend Fiscal Year Budget -----
FY 2013

Agencies are working on 3 budgets at any given time. Right now:

Spending FY 13

Congress dealing with FY14

Agencies starting to kick off planning for FY15
U.S. R&D INVESTMENT
The Budget Control Act /
Sequestration
1. Established Discretionary
Spending Caps
2. Established automatic
budget enforcement
procedures (sequestration)
 $1.2 trillion cuts through
2021
 ~8% cuts to R&D over the
next five years
U.S. R&D INVESTMENT
U.S. R&D INVESTMENT
Current State of Play
 President’s FY14 budget now out
 The BIG issues remain: deficits, taxes v. spending, growth in
entitlements, tax burden
 Sequestration remains in place for now….
 Research community reeling
 …also debt ceiling
U.S. R&D INVESTMENT
For more info…
[email protected]
202-326-6607
www.aaas.org/spp/rd/