Transcript Introduction to the Federal Budget Process Matt Hourihan April 13, 2015 for the Catalyzing Advocacy in Science and Engineering Workshop AAAS R&D Budget and Policy Program http://www.aaas.org/program/rd-budget-and-policy-program.

Introduction to the
Federal Budget Process
Matt Hourihan
April 13, 2015
for the Catalyzing Advocacy in Science and
Engineering Workshop
AAAS R&D Budget and Policy Program
http://www.aaas.org/program/rd-budget-and-policy-program
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
Composition of the Proposed FY 2016 Budget
Total Outlays = $4.0 trillion
outlays in billions of dollars
Net Interest
$283
Defense
Discretionary
$528
[Defense R&D]
$77
Other Mandatory
$670
Nondefense
Discretionary
$495
Medicaid
$351
[Nondefense R&D]
$69
Medicare
$583
Social Security
$938
Source: Budget of the United States Government FY 2016. Projected deficit is $474 billion. © 2015 AAAS
Phase 1: Planning within Agency w/ OMB and
OSTP oversight
Phase 2: OMB
Review
Budget
Release
A Typical Federal Budget Process:
Three Years, Four Phases
Phase 3: Congressional
budget and appropriations
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Phase 4: Execute the fiscal year’s
budget (not shown)
Arranged by fiscal year (October to September)
Phase 1: Planning within Agency w/ OMB and
OSTP oversight
Phase 2: OMB
Review
Budget
Release
The Federal Budget Cycle
Phase 3: Congressional
budget and appropriations
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
 Phase 1: Internal agency discussions, planning, and review
 OMB is present throughout
 Early spring: guidance memo
 Science & Tech: Joint guidance memo from OMB / OSTP (midsummer)
 Agencies deliver budget justifications to OMB (early fall)
Phase 1: Planning within Agency w/ OMB and
OSTP oversight
Phase 2: OMB
Review
Budget
Release
The Federal Budget Cycle
Phase 3: Congressional
budget and appropriations
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
 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
Total R&D by Agency, FY 2016
budget authority in billions of dollars
Commerce, $2.1
All Other, $6.2
USDA, $2.9
Total R&D =
$145.3 billion
NSF, $6.3
NASA, $12.2
DOE, $12.5
DOD, $71.9
HHS (NIH), $31.0
Source: OMB R&D data, agency budget justifications, and other agency documents and data. R&D includes conduct of R&D and
R&D facilities. © 2015 AAAS
Phase 1: Planning within Agency w/ OMB and
OSTP oversight
Phase 2: OMB
Review
Budget
Release
The Federal Budget Cycle
Phase 3: Congressional
budget and appropriations
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
 Phase 3: Congress receives and reacts to President’s budget,
holds hearings
 IN THEORY: Approves budget resolution (simple majority)
 Approps committees write/approve 12 appropriations bills
 “President proposes, Congress disposes”
The Budget Resolution
 Overall spending framework
 Discretionary spending
figure is divvied up by
appropriations committees
 Budget resolution is a
political document
 (which is why they can’t
seem to pass one?)
 Reconciliation instructions?
 302(b) allocations
The Federal Budget Cycle
Phase 4: Spend the Fiscal Year Budget
Phase 2: OMB
Review
FY 2017
Phase 1: Planning within Agency w/ OMB and
OSTP oversight
Budget
Release
FY 2016
Phase 3: Congressional
budget and appropriations
Phase 4: Spend the Fiscal Year Budget
Phase 2: OMB
Review
Budget
Release
FY 2015
Phase 3: Congressional
budget and appropriations
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
 Gov’t is working on 3 budgets at any given time. Right now:
 FY15 in progress
 FY16: Budget resolutions; approps to follow
 FY17: Agencies ramping up
Broad Qualities of the System
 Decentralization
 “Embeddedness”
 Incrementalism
Limits on Discretionary Spending Since FY 2010
billions of constant 2015 dollars
$1,200
$1,150
$1,100
$1,050
$1,000
$950
$900
Actual Base Budget Authority
Based on past budget resolutions, the Budget Control Act, and subsequent legislation. Adjusted for inflation using deflators from the FY16
budget request. © AAAS 2015
Limits on Discretionary Spending Since FY 2010
billions of constant 2015 dollars
$1,200
$1,150
$1,100
$1,050
$1,000
$950
$900
Actual Base Budget Authority
BCA: Original Baseline
BCA: Sequester Baseline
Based on past budget resolutions, the Budget Control Act, and subsequent legislation. Adjusted for inflation using deflators from the FY16
budget request. © AAAS 2015
Limits on Discretionary Spending Since FY 2010
billions of constant 2015 dollars
$1,200
$1,150
$1,100
$1,050
$1,000
$950
$900
Actual Base Budget Authority
BCA: Original Baseline
BCA: Sequester Baseline
Current Law
Based on past budget resolutions, the Budget Control Act, and subsequent legislation. Adjusted for inflation using deflators from the FY16
budget request. © AAAS 2015
Limits on Discretionary Spending Since FY 2010
billions of constant 2015 dollars
$1,200
$1,150
$1,100
$1,050
$1,000
$950
$900
Actual Base Budget Authority
BCA: Original Baseline
BCA: Sequester Baseline
Current Law
President's FY 2016 Budget
Based on past budget resolutions, the Budget Control Act, and subsequent legislation. Adjusted for inflation using deflators from the FY16
budget request. © AAAS 2015
FY16 R&D in the Base Budget by Function
percent change from FY 2015, nominal dollars
Commerce (includes NIST)
44.8%
Applied Energy Programs
23.3%
Agriculture
20.5%
Transportation
17.8%
Environment Agencies
12.6%
Defense Activities
8.1%
General Science (NSF, DOE SC)
5.0%
Health (includes NIH)
2.2%
Space
0.9%
-35.5%
Justice (DHS)
TOTAL
-40%
6.4%
-20%
0%
20%
Source: OMB R&D data, agency budget justifications, and agency budget documents. © 2015 AAAS
40%
60%
 3. agency notes
 R&D
 STEM
Trends in Federal R&D, FY 1977-2016
in billions of constant FY 2015 dollars
$200
$180
$160
Total R&D
$140
Defense
$120
$100
$80
Nondefense
ARRA Total
$60
ARRA Defense
$40
$20
ARRA Nondefense
$0
Source: AAAS analyses of historical budget and appropriations data. Pre-1994 figures are NSF obligations data from the Federal Funds survey. FY
2016 is the President's request. R&D includes conduct and facilities. © 2015 AAAS
Federal R&D in the Budget and the Economy
Outlays as share of total, 1962 - 2016
14.0%
2.5%
12.0%
2.0%
10.0%
1.5%
8.0%
6.0%
1.0%
4.0%
0.5%
2.0%
0.0%
0.0%
R&D as a Share of the Federal Budget (Left Scale)
R&D as a Share of GDP (Right Scale)
Source: Budget of the United States Government, FY 2016. FY 2016 is the President's request. © 2015 AAAS
Composition of the Federal Budget
Outlays as share of total budget, 1962 - 2016
80%
70%
60%
Payments to
Individuals
50%
All Other
40%
30%
Defense (non-R&D)
20%
10%
0%
Investments
(research, edu,
infrastructure)
Source: Budget of the United States Government, FY 2016. "Investments" include outlays for R&D, education and training, direct nondefense
infrastructure, and other grants, primarily for transportation. "Payments to Individuals" are primarily entitlement programs like Medicare,
Medicaid, and Social Security, but also include many other public assistance programs. © 2015 AAAS
R&D as a Share of GDP by Funder
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
Total
Federal
Industry
Source: National Science Foundation, National Patterns of R&D Resources series. © 2015 AAAS
Other
Research as a Share of GDP by Funder
1.2%
1.0%
0.8%
0.6%
0.4%
0.2%
0.0%
Total Research
Federal Research
Industry Research
Source: National Science Foundation, National Patterns of R&D Resources series. © 2015 AAAS
Other
Limits on Discretionary Spending Since FY 2010
billions of constant 2015 dollars
$1,200
$1,150
$1,100
$1,050
$1,000
$950
BCA: Original Baseline
Actual Base Budget Authority
President's FY 2016 Budget
Senate Budget
BCA: Sequester Baseline
Current Law (Sequester Levels)
House Budget
Based on past budget resolutions, the Budget Control Act, and subsequent legislation. Adjusted for inflation using deflators from the FY16
budget request. Excludes war funding proposals.© AAAS 2015
Limits on Defense Spending Base
billions of constant 2015 dollars
$610
$590
$570
$550
$530
$510
$490
$470
BCA: Original Baseline
Actual Base Budget Authority
President's FY 2016 Budget
Senate Budget
BCA: Sequester Baseline
Current Law (Sequester Levels)
House Budget
Based on past budget resolutions, the Budget Control Act, and subsequent legislation. Adjusted for inflation using deflators from FY16 request.
Does not include war funding. © AAAS 2015
Limits on Nondefense Spending Base
billions of constant 2015 dollars
$600
$580
$560
$540
$520
$500
$480
$460
$440
$420
$400
BCA: Original Baseline
Actual Base Budget Authority
President's FY 2016 Budget
Senate Budget
BCA: Sequester Baseline
Current Law (Sequester Levels)
House Budget
Based on past budget resolutions, the Budget Control Act, and subsequent legislation. Adjusted for inflation using deflators from the FY16
budget request. © AAAS 2015
For more info…
[email protected]
202-326-6607
http://www.aaas.org/program/rd
-budget-and-policy-program