Overlapping Federal Budgets Confuse the FY 2004 R&D Funding Picture

Office of Science and Technology Policy Director John Marburger stepped before a crowd of Washington insiders gathered for the early February unveiling of the administration’s fiscal year 2004 research and development budget proposal and noted, with a slight smile, that “some astute observers may have noticed that many of the 2003 appropriations bills have not passed in Congress.” Then came the understatement: “That makes it difficult to make comparisons [with the 2004 proposal].”

At the end of the hour-long briefing by Marburger and Office of Management and Budget Associate Director Marcus Peacock, another OMB analyst noted that the FY 2004 budget had “lapped” the FY 2003 budget. Peacock, who oversees many of the science and technology funding proposals for the administration, observed that four separate federal budgets were in play in Washington. The government was operating on congressional continuing resolutions that essentially have kept the FY 2002 budget in effect, even though FY 2002 ended last 1 October. The FY 2003 appropriations bills have been tied up in congressional wrangling. The administration released its FY 2004 proposal as required on 3 February, but because final FY 2003 numbers upon which the FY 2004 proposal is based hadn’t been determined, the new numbers didn’t mean much. “And next week, I go to a meeting to start on the FY 2005 budget,” Peacock said with a smile that matched Marburger’s.

Across Washington, officials at most federal agencies offered similar cautions as they released their parts of President Bush’s new budget proposal. The FY 2004 numbers are an indication of what the administration is thinking, but because there is no FY 2003 final budget baseline, finding fiscal reality in the FY 2004 budget is nearly impossible. Only the FY 2003 budgets for the Department of Defense (DOD) and for Military Construction have been enacted by Congress. All of the other budget comparisons are between what the administration proposed in FY 2003 and is proposing in FY 2004. In many agencies and programs, what the administration proposed will be substantially changed when and if Congress completes the FY 2003 budget.

Uncertainty comes not only from the overlapping budget numbers, but from: the fiscal squeeze caused by a near-record deficit of $307 billion projected for FY 2004; the estimated multibillion cost of a war on Iraq that isn’t factored into the budget proposal; and the anticipated reformulation of NASA’s budget in the wake of the space shuttle Columbia catastrophe. Indeed, NASA postponed its scheduled FY 2004 budget briefing on 3 February until the financial ramifications of Columbia’s loss can be determined.

All of these issues caused the R&D budget experts at the American Association for the Advancement of Science to note that this year their analysis of the federal R&D budget is “especially preliminary.” The AAAS budget overview says “the budget proposes overall increases for the federal investment in R&D, especially for the priorities of defense development and homeland security research, with a mixture of flat funding, cuts, and modest increases for other R&D programs.”

Budget priorities

OMB’s Peacock and other administration officials are defining the underlying budget priorities as “winning the war against terrorism and protecting the homeland, and strengthening our economy.” In the section on R&D funding in the thick FY 2004 budget book, the administration notes that “these priorities have affected the way R&D is being funded and directed, as well as the way the results of R&D are being used. Within the federal government’s research portfolio, agencies are directing many of their programs to assist in the defense effort.”

What that means, according to the AAAS analysis, is that while the request for total federal R&D spending is a record $122.7 billion for FY 2004 (a 6.7% increase over the FY 2003 request), most of the money would go to defense programs. Once DOD and Department of Homeland Security funds are subtracted, “the other R&D funding agencies would see their increases clustered around the 1.9% inflation rate, with increases for some programs matched by flat funding or cuts in others.”

Administration officials emphasized increases in “priority programs” in presenting the R&D budget, noting that, as Marburger put it in his briefing, the “important numbers” are for those programs. They include big weapons systems at the DOD. The missile defense program would jump 22%, to $8.3 billion in FY 2004, compared to FY 2003. The Joint Strike Fighter would get $4.4 billion in development money, up 28% from FY 2003. But both basic and applied research in defense would drop significantly, with basic falling 7.7% to $1.3 billion, and applied declining 14.4% to $3.7 billion.

Keeping the “especially preliminary” warning in mind, highlights from other science and technology agencies are:

• ▸ National Science Foundation. The NSF FY 2004 budget would total $5.5 billion, a respectable 8.6% increase, but significantly less than the $6.4 billion authorized in a bill signed by the president a few months ago. The FY 2004 budget focuses on the physical sciences and proposes a 12.7% increase to $1.1 billion. The Major Research Equipment and Facility Construction account would go from $126 million to $202 million, with much of that money aimed at the Atacama Large Millimeter Array, the IceCube Neutrino Observatory, and the Earth-Scope seismic program.

• ▸ National Aeronautics and Space Administration. While NASA’s budget is likely to be reallocated due to the Columbia disaster, space science R&D would receive a 17% increase to $4 billion under the initial FY 2004 proposal. Included in that is money for developing a nuclear propulsion system, and missions to Pluto and the Kuiper Belt, Mercury, the asteroids, and a comet. There is also $59 million for the Laser Interferometer Space Antenna (LISA) and for CON-X, a next-generation telescope that could image emissions from black holes.

• ▸ Department of Energy. Research and development funding at DOE would increase 5.7% to $8.5 billion, but most of that would go to defense activities. Funding for the Office of Science would remain flat at $3.3 billion. There would be a significant boost in funding for nanoscience with the reallocation of money that has been going for construction of the nearly completed spallation neutron source.

• ▸ NIST and NOAA. The National Institute of Standards and Technology would see its R&D budget decline 11.8% to $411 million. NIST’s Advanced Technology Program would only receive enough money to close out contracts as the White House tries once again to kill the program. The National Oceanic and Atmospheric Administration’s R&D budget would fall by 6.4% to $764 million.

• ▸ Department of Homeland Security. This department, officially created in January, would become a significant funding agency with a proposed R&D budget of $1 billion. Most of that money would be in the Directorate of Science and Technology. The directorate would have $801 million, which would include the Homeland Security Advanced Research Projects Agency (HSARPA).

• ▸ National Institutes of Health. After five years of appropriations that nearly doubled the NIH budget, the agency would receive only a 2% increase in FY 2004. NIH’s National Institute of Allergy and Infectious Diseases, seen as important in the war on terrorism, would receive an 8.9% increase, but overall R&D would rise only 2% to $27 billion.

While the administration is promoting the substantial increases in its “priority programs,” House Science Committee Chairman Sherwood Boehlert (R-N.Y.) described the overall science and technology budget as “disappointing.” The administration “has acknowledged the importance of funding for basic research, particularly in the physical sciences,” he said. “On the other hand, many science programs do not even keep up with inflation. In many areas … there aren’t enough details yet to fully understand the proposals,” Boehlert concluded. “Perhaps the best that can be said is that this budget document may have to be rethought in any event once Congress finally provides domestic appropriations for fiscal 2003.”