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U.S. Federal Budget for Research & Development Josh Shiode @joshshiode February 18, 2017 For the AAAS Annual Meeting (#AAASmtg) AAAS Office of Government Relations https://www.aaas.org/program/govrelations Copyright © 2015 American Association for the Advancement of Science 2/18/2017 1 Industry funds about 2/3 of total U.S. R&D today, but much D than R by Funder R&Dmore as a Share of GDP 3.5% R&D funding as percent of GDP 3.0% Total 2.5% 2.0% Federal 1.5% Industry 1.0% 0.5% Other 0.0% Total Source:Federal NSF National Patterns Industry of R&D Resources seriesOther © 2015 AAAS Copyright © 2015 American Association for the Advancement of Science Source: National Science Foundation, National Patterns of R&D Resources series. © 2015 AAAS 2/18/2017 2 Other nations are increasingly prioritizing R&D as percent of GDP, especially to the east Total R&D as percent of GDP S. Korea Finland Japan Japan Taiwan U.S. EU-28 Germany U.S. France EU-28 China UK Source: OECD, Main Science and Technology Indicators, Feb. 2017. © 2017 AAAS Copyright © 2015 American Association for the Advancement of Science 2/18/2017 3 The federal government funds the majority of research in the U.S. Research as a Share of GDP by Funder 1.2% Research funding as percent of GDP 1.0% Total 0.8% 0.6% Federal 0.4% Industry 0.2% Other 0.0% Total Research Source: NSF National Patterns of R&D Resources series © 2015 AAAS Federal Research Industry Research Copyright © 2015 American Association for the Advancement of Science Other 2/18/2017 4 Science & technology budgets under President Obama A LOOK AT THE PAST EIGHT YEARS Copyright © 2015 American Association for the Advancement of Science 2/18/2017 5 Nondefense science agency budgets saw mixed results in the Obama eraS&T thanks to larger budget Agency Budgets in thetrends Obama Years Percent change from FY 2008 levels, constant dollars Percent change from FY 2008 (corrected for inflation) 60% DOE Science 50% DOE Technology Programs* 40% DOE Science 30% 20% DOE NSF Technology Programs 10% USDA R&D NSF 0% -10% -20% NASA NASA NIH NIH USDA R&D nuclear, fossil, efficiency and renewables, grid research, and ARPA-E. *Includes nuclear, fossil, efficiency and*Includes renewables, grid research, and ARPA-E. FYFY 2009 includes Recovery Act funding. Based on AAAS analyses of historical data. ©of 2017 AAAS 2009 includes Recovery Act funding. Based on AAASagency analyses historical agency data. © 2017 AAAS Copyright © 2015 American Association for the Advancement of Science 2/18/2017 6 The President mostly requested large increases for R&D, Base Discretionary but Congress holds power of Spending: the purse Request vs Actual percent change from prior year, nominal dollars Percent change from prior year 8% 6% 4% President’s Request 2% 0% -2% Actual Change -4% -6% -8% Average Average Nondefense Nondefense R&D Request R&D Presidential Requests (Est.) Actual Change Request Based on historical OMB budget authority tables. Average nondefense R&D request © 2017 AAAS 2010 2011 2012 2013 2014 2015 2016 Copyright © 2015 Association Advancement of Science Based on historical OMB budget authority tables. Average nondefense R&D request based onAmerican AAAS data.for©the2017 AAAS 2/18/2017 7 Example: The ups and downs of the National Institutes of Health budget (NIH) NIH Request vs. Appropriations percent change from prior year, nominal dollars Percent change from prior year 8% 6% NIH Request 4% 2% 0% Actual Change -2% -4% -6% -8% FY10 FY11 FY12 FY13* FY14 FY15** FY16 *Flat funding requested in FYNIH 2013. **Base budget only. BasedNIH on historical agency budget data. © 2017 AAAS Request Actual Change Copyright © 2015 American Association for the Advancement of Science *Flat funding requested in FY 2013. **Base budget only. Based on historical agency budget data. © 2017 AAAS 2/18/2017 8 The federal government is “an insurance company Composition of the Proposed FY 2017 Budget Outlays = $4.1 trillion with an army”Total costing ~$4T in FY 2017 outlays in billions of dollars Net Interest $303 Defense Discretionary* $529 [Defense R&D]* $79 Other Mandatory $656 Nondefense Discretionary* $557 Medicaid $386 [Nondefense R&D]* $68 Medicare $598 Social Security $967 *Approximately $4 billion for R&D is classified as mandatory spending. Figures are estimates. billiondeficit for isR&D classified mandatory Source: Budget of the United States*Approximately Government FY 2017 .$4 Projected $503 is billion. © AAAS |as Feb. 2016 spending. Figures are estimates. Source: Budget of the United States Government FY 2017. Projected deficit is $503 billion. © 2016 AAAS Copyright © 2015 American Association for the Advancement of Science 2/18/2017 9 Two kinds of spending Essentially on autopilot (“formulafunded”) Requires act of Congress to change Political “third” rail “Mandatory” Mostly entitlements Copyright © 2015 American Association for the Advancement of Science 2/18/2017 10 The overwhelming trend in the federal budget is growing mandatory spending Federal Spending as a Percent of GDP, 1962 - 2021 Spending as percent of GDP 30% 25% Net Interest Net Interest 20% Mandatory Mandatory 15% Nondefense Nondefense Discretionary Discretionary 10% Defense Defense Discretionary Discretionary 5% 0% Source: Budget of the U.S. Government FY 2017. © 2016 AAAS Source: Budget of the U.S. Government FY 2017. © 2016 AAAS Copyright © 2015 American Association for the Advancement of Science 2/18/2017 11 Two kinds of spending Requires Congress to pass bills to fund at all “Discretionary” Can make this easy target for cuts Most federal R&D funding lives here Copyright © 2015 American Association for the Advancement of Science 2/18/2017 12 Recent cuts to discretionary spending began in FY 2010 Limits on Discretionary Spending Since FY 2010 Billions of constant 2016 dollars billions of constant 2016 dollars $1,250 $1,200 Actual base budget authority $1,150 $1,100 $1,050 $1,000 $950 Based on past budget resolutions, the Budget Control Act, and subsequent legislation. Adjusted for inflation using deflators from the FY17Base budget request. Excludes war funding proposals. © 2016 AAAS Actual Budget Authority Copyright © 2015 American Association for the Advancement of Science 2/18/2017 13 The Budget Control Act capped discretionary spending for 10 years,Limits withon “sequester” for further cut Discretionary Spending Since FY 2010 Billions of constant 2016 dollars billions of constant 2016 dollars $1,250 $1,200 $1,150 $1,100 $1,050 $1,000 $950 Based on pastInitial budgetPre-Sequestration resolutions, the Budget Control Act, and subsequent legislation. Adjusted for inflation using BCA: Baseline BCA: Sequestration Baseline deflators from the FY17 budget request. Excludes war funding proposals. © 2016 AAAS Actual Base Budget Authority Copyright © 2015 American Association for the Advancement of Science 2/18/2017 14 Bipartisan budget deals in 2013 and 2015 allowed partial relief from the sequestration caps Limits on Discretionary Spendingbaseline Since FY 2010 Billions of constant 2016 dollars billions of constant 2016 dollars $1,250 $1,200 $1,150 $1,100 Actual base budget authority $1,050 $1,000 $950 Based onBCA: past Initial budgetPre-Sequestration resolutions, the Budget Control Act, and subsequent legislation. Adjusted for inflation using Baseline BCA: Sequestration Baseline deflators from the FY17 budget request. Excludes war funding proposals. © 2016 AAAS Actual Base Budget Authority Copyright © 2015 American Association for the Advancement of Science 2/18/2017 15 Absent another deal, set to return to the sequestration for FY 2018Spending and beyond Limitscaps on Discretionary Since FY 2010 Billions of constant 2016 dollars billions of constant 2016 dollars $1,250 $1,200 $1,150 $1,100 $1,050 $1,000 $950 Based on pastInitial budgetPre-Sequestration resolutions, the Budget Control Act, and subsequent legislation. Adjusted for inflation using BCA: Baseline BCA: Sequestration Baseline deflators from the FY17 budget request. Excludes war funding proposals. © 2016 AAAS Actual Base Budget Authority Copyright © 2015 American Association for the Advancement of Science Current Law Beyond FY17 2/18/2017 16 Federal R&D budgets follow the discretionary budget overall Federal Spending Since FY 2010 Percent change from FY10 levels, constant dollars, excluding new mandatory proposals in FY 2017 Base discretionary Base Discretionary capsCaps Percent change from FY 2010 (corrected for inflation) 5% 0% DOE Applied Programs* DOE Applied Programs NSF -5% -10% NSFDOE Science -15% DOENIH Science NIHNASA -20% NASA USDA R&D -25% USDA DODR&D S&T -30% 2010 2011 2012 2013 2014 2015 2016 DOD S&T 2017 Request *Includes EERE, OE, Fossil, Nuclear; excludes ARPA-E (regular appropriations began in FY 2011). Based on AAAS analyses of historical OMB , agency, and appropriations data and the President's FY 2017 request. © 2016 AAAS *Includes EERE, OE, Fossil, Nuclear; excludes ARPA-E (regular appropriations began in FY 2011). Based on AAAS analyses of historical OMB, agency, and appropriations data and the President’s FY 2017 request. © 2016 AAAS Copyright © 2015 American Association for the Advancement of Science 2/18/2017 17 Nondefense discretionary spending ultimately a lower priority for all in Obama years and thus R&D gains largely unrealized While the President’s requests were regularly unfulfilled, appropriators often funded research…when there was fiscal room “All politics is local” Competitiveness, health, energy independence, national security However, still disagreement, i.e.: Climate science Social science Applied tech: energy, manufacturing Duplication, role of government, waste, accountability, transparency Copyright © 2015 American Association for the Advancement of Science 2/18/2017 18 What do we know, and when will we know it? WHAT LIES AHEAD? Copyright © 2015 American Association for the Advancement of Science 2/18/2017 19 The federal budget process is complex, overlapping, but follows a process… FY 2017 CR FY 2019 Formulate and Introduce President’s Budget Request CR? Omnibus? Budget and Appropriations Process in House and Senate Execute Fiscal Year Budget Negotiate and • Budget Write, pass, and finalize Resolution conference twelve • 302(a) & budget proposal appropriations (b) alloc. w/OMB via bills • Hearings passbacks Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Agency Planning Start of Calendar Year 2017 We are here. Budget Release FY 2018 CR Start of Calendar Year 2018 Copyright © 2015 American Association for the Advancement of Science 2/18/2017 20 White House OSTP OMB NSF NASA Department of Defense (1/2 scale) Department of Energy Copyright © 2015 American Association for the Advancement of Science 2/18/2017 21 Back and forth results in aProposed President’s Request in Composition of the FYBudget 2017 Budget Feb (Apr/May in transition covering Total Outlaysyears) = $4.1 trillion all spending outlays in billions of dollars Net Interest $303 Defense Discretionary* $529 [Defense R&D]* $79 Other Mandatory $656 Nondefense Discretionary* $557 Medicaid $386 [Nondefense R&D]* $68 Medicare $598 Social Security $967 *Approximately $4 billion for R&D is classified as mandatory spending. Figures are estimates. billiondeficit for isR&D classified mandatory Source: Budget of the United States*Approximately Government FY 2017 .$4 Projected $503 is billion. © AAAS |as Feb. 2016 spending. Figures are estimates. Source: Budget of the United States Government FY 2017. Projected deficit is $503 billion. © 2016 AAAS Copyright © 2015 American Association for the Advancement of Science 2/18/2017 22 So what about the FY 2018 budget? Largely unanswered questions at this point. Defense/Nondefense mix? “Penny Plan” Based on prior proposals, possible (but not certain) targets might include: Climate science (NASA, DOE, elsewhere?) Energy science and technology Advanced Manufacturing EPA Other applied research? Discovery science relatively safe? Rhetoric vs. reality? If the Administration seeks to blow a hole in the nondefense discretionary budget – how does Congress react? Copyright © 2015 American Association for the Advancement of Science 2/18/2017 23 Severely austere budgets have been reported as potential influences on Trump White House Billions of constant 2016 dollars for Nondefense spending Nondefense Discretionary Spending Through FY26 billions of constant 2016 dollars $600 $550 $500 $450 $400 $350 $300 Actual Basecaps Budget Authority Sequester *Current extend to FY 2021. Spending BCA: level beyond thatBaseline based on CBO projections. Based onCaps past/budget proposals, Budget Control Act, andHouse subsequent Baseline Beyondthe FY17* FY17 Budgetlegislation. © 2016 AAAS FY17 RSC Budget Copyright © 2015 American Association for the Advancement of Science 2/18/2017 24 Reported influences would cut largely applied research & development in energy, climate, environment Note: these are potential influences not certainties Not mentioned at all: NIH, NASA, NSF, USDA research programs Targeted for cuts/elimination: DOE applied technology programs & climate/bio research DOD non-combat research Commerce technology development programs EPA research Copyright © 2015 American Association for the Advancement of Science 2/18/2017 25 White House Transmit PBR House OSTP to Congress OMB NSF NASA Senate DepartmentofofDefense Defense Department (1/2scale) scale) (1/2 Department of Energy Copyright © 2015 American Association for the Advancement of Science 2/18/2017 26 The President proposes and Congress disposes. Copyright © 2015 American Association for the Advancement of Science 2/18/2017 27 Congress is organized into committees Senate Commerce, Science, & Transpo Cmte Budget Committee House of Representatives Science, Space, & Technology Cmte Budget Committee Appropriations Committee Appropriations Committee + Many other committees + Many other committees Copyright © 2015 American Association for the Advancement of Science 2/18/2017 28 From Budget to Appropriations to 12 subcommittees Budget Committees Total Discretionary Allocation Appropriations Committees Subcommittee allocations Commerce, Justice, Science, and Related Agencies (CJS) NASA NSF Commerce DOJ Energy & Water Development, and Related Agencies (E&W) DOE Army Corps of Engineers Labor, Health and Human Services, Education, and Related Agencies (Labor-H) FDA NIH Others… Dept. of Education (Ed) Dept. of Labor Copyright © 2015 American Association for the Advancement of Science 2/18/2017 29 The Energy & Water Subcommittee faces major questions around R&D in their jurisdiction House Senate Chair Mike Simpson (ID) Lamar Alexander (TN) Ranking Member Marcy Kaptur (OH) Dianne Feinstein (CA) ~$40 billion Challenge: balancing basic research, DOE tech portfolio, NNSA; also Army Corps, Bureau of Reclamation Questions: What happens to applied tech? Does support for science programs (physics, bio, others) continue? R&D: Senate Energy & Water Subcommittee AAAS estimates in millions of dollars Bureau of Reclamatio n, $126.0 TVA, $17.0 NRC, $87.1 DOE Science, $5,352.1 Army Corps, $16.4 NNSA, $6,978.2 DOE Energy, $3,426.7 R&D includes conduct of R&D and R&D facilities. © 2016 AAAS Copyright © 2015 American Association for the Advancement of Science 2/18/2017 31 The Labor, HHS, Education Subcommittee is one of the most controversial, but NIH is very popular House Senate Chair Tom Cole (OK) Roy Blount (MO) Ranking Member Rosa DeLauro (CT) Patty Murray (WA) >$150 billion Deep divisions over public health programs, education, DOL 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? R&D: Senate Labor-H Subcommittee AAAS estimates in millions of dollars Education, $222.7 Social Security Admin, $58.0 HHS, $34,014.2 R&D includes conduct of R&D and R&D facilities. © 2016 AAAS Copyright © 2015 American Association for the Advancement of Science 2/18/2017 32 The Commerce, Justice, Science Subcommittee faces questions about future of NASA, Commerce technology programs House Senate Chair John Culberson (TX) Richard Shelby (AL) Ranking Member Jose Serrano (NY) Jeanne Shaheen (NH) ~$55 billion Challenge: balancing Depts. of Justice and Commerce, NASA, NSF Questions: NSF: social and geo science funding? Facilities? NASA: what happens to earth science? Human spaceflight? (and where do we go?) Commerce: What happens to NOAA climate research and NIST commercial technology programs? R&D: House CJS Subcommittee AAAS estimates in millions of dollars NSF, $5,929.0 Justice, $48.6 NASA, $13,368.1 DOC, $1,668.6 R&D includes conduct of R&D and R&D facilities. © 2016 AAAS Copyright © 2015 American Association for the Advancement of Science 2/18/2017 33 The Agriculture Subcommittee has recently been growing its competitive research portfolio, will that continue? House Senate Chair Robert Aderholt (AL) John Hoeven (ND) Ranking Member Sanford Bishop (GA) Jeff Merkley (OR) ~$20 billion Funds most USDA (but not Forest Service); also FDA Balancing between conservation, public assistance, food safety Questions: Does growth for competitive grants continue? Do formula funds remain lower priority? R&D: Senate Agriculture Subcommittee AAAS estimates in millions of dollars FDA, $412.6 USDA, $2,283.5 R&D includes conduct of R&D and R&D facilities. © 2016 AAAS Copyright © 2015 American Association for the Advancement of Science 2/18/2017 34 FY 2017 appropriations in holding pattern and FY 2018 very unclear FY 2017 Appropriations stuck since fall Trump Admin budget amendment coming in…March? SecDef: 30-day readiness review Will result in a tweak of the final Obama budget, with defense spending increase Current CR runs out April 28 FY 2017 R&D Appropriations by Character estimated percent change from FY 2016, nominal dollars 5% 4% 3% 2% 1% 0% FY 2018 February (?): budget outline Late April (?): full request Appropriations: typically late spring/summer, into fall…and beyond -1% -2% -3% Basic Research Request Applied Research House Development Senate President's request excludes manadatory proposals. Inflation is 1.8 percent. © 2016 Also: debt ceiling deadline in March Copyright © 2015 American Association for the Advancement of Science 2/18/2017 35 Total discretionary spending is capped at least through FYLimits 2021on Discretionary Spending Since FY 2010 Billions of constant 2016 dollars billions of constant 2016 dollars $1,250 $1,200 $1,150 $1,100 $1,050 $1,000 $950 Based on pastInitial budgetPre-Sequestration resolutions, the Budget Control Act, and subsequent legislation. Adjusted for inflation using BCA: Baseline BCA: Sequestration Baseline deflators from the FY17 budget request. Excludes war funding proposals. © 2016 AAAS Actual Base Budget Authority Copyright © 2015 American Association for the Advancement of Science Current Law Beyond FY17 2/18/2017 36 But remember, Congress “disposes” & has been able to craft bipartisan deals to provide relief Limits on Discretionary Spending Since FY 2010 Billions of constant 2016 dollars billions of constant 2016 dollars $1,250 $1,200 Bipartisan Deals $1,150 $1,100 ?? $1,050 $1,000 $950 Based on pastInitial budgetPre-Sequestration resolutions, the Budget Control Act, and subsequent legislation. Adjusted for inflation using BCA: Baseline BCA: Sequestration Baseline deflators from the FY17 budget request. Excludes war funding proposals. © 2016 AAAS Actual Base Budget Authority Copyright © 2015 American Association for the Advancement of Science Current Law Beyond FY17 2/18/2017 37 The AAAS R&D Budget and Policy Program OUR RESOURCES Copyright © 2015 American Association for the Advancement of Science 2/18/2017 38 We aim to provide timely, independent analyses of both federal and non-federal R&D budget information Copyright © 2015 American Association for the Advancement of Science 2/18/2017 39 Recently created interactive data dashboard empowers you to create and export your own charts and tables Copyright © 2015 American Association for the Advancement of Science 2/18/2017 40 And not only that, but… We have an email list for regular updates Deep historical data charts and tables Yearly comprehensive reports on the President’s budget requests and congressional appropriations Presentation slides for downloading and use (with attribution please!) And… Copyright © 2015 American Association for the Advancement of Science 2/18/2017 41 Experts you can contact! Matt Hourihan Director, R&D Budget and Policy Program [email protected] / @MattHourihan http://www.aaas.org/program/rd-budget-and-policyprogram Josh Shiode Senior Government Relations Officer, AAAS [email protected] / @JoshShiode Office of Government Relations http://www.aaas.org/program/govrelations @AAAS_GR Copyright © 2015 American Association for the Advancement of Science 2/18/2017 42 EXTRA SLIDES Copyright © 2015 American Association for the Advancement of Science 2/18/2017 43 But, Federal R&D funding at historically low levels as fraction of the sizeTrends of our is in economy Federal R&D As a percent of GDP R&D as percent of GDP 1.4% 1.2% 1.0% 0.8% Total Total Defense 0.6% Defense 0.4% Nondefense Nondefense 0.2% 0.0% Source: AAAS analyses of historical budget and agency data and the FY 2017 request. GDP figures from OMB. R&D includes conduct facilities. © AAAS Source: AAAS analyses of historical budget and agency data and the FY 2017 request. GDP figures from OMB. R&D includes conductand and facilities. © AAAS Copyright © 2015 American Association for the Advancement of Science 2/18/2017 44 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 Copyright © 2015 American Association for the Advancement of Science 2/18/2017 45 Federal Spending as a Percent of GDP, 1962 - 2021 30% 25% Net Interest 20% Mandatory 15% Nondefense Discretionary 10% Defense Discretionary 5% 0% Source: Budget of the U.S. Government FY 2017. © 2016 AAAS Copyright © 2015 American Association for the Advancement of Science 2/18/2017 46 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 Copyright © 2015 American Association for the Advancement of Science 2/18/2017 2016 is the President's request. R&D includes conduct and facilities. © 2015 AAAS 47 Recent example: discussion of S&T impacts in budgets reportedly influencing Trump budget team Copyright © 2015 American Association for the Advancement of Science 2/18/2017 48 Celebrating silly, odd, or obscure-sounding federally funded research that has returned serious benefits to society. Copyright © 2015 American Association for the Advancement of Science 2/18/2017 49