An Update on Federal R&D in the FY 2007 Budget

Kei KoizumiDecember 8, 2006for the AAAS Board of Directors

AAAS R&D Budget and Policy Program

http://www.aaas.org/spp/rd

See the “What’s New” section for the latest updates; see the “Seminars and Presentations” section for copies of this presentation.

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FY 2007 BUDGET… STILL UNFINISHED

Only 2 of the 11 FY 2007 appropriations bills (for DOD and DHS) are enacted; other agencies are operating under a CR through midnight tonight.

Later today, the House and Senate vote on another CR through February 15.

Domestic, non-security discretionary spending would fall 1 percent in 2007 in the latest congressional budget plans.

So far, appropriators have agreed with Administration priorities for ACI, defense, and space, and have added money to other areas (environment, agriculture). But these gains are threatened as appropriations drag on.

Only a 2-year (retroactive) extension of the R&E tax credit may pass tonight.

AAAS R&D Budget and Policy Program

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FEDERAL R&D IN THE FY 2007 BUDGET

Innovation is a key theme, with proposed increases for three key physical sciences agencies (NSF, DOE Science, NIST labs), but those increases are endangered despite Administration, House, and Senate support.

Homeland security R&D falls for the first time.

Overall federal research spending will almost certainly decline even if ACI gains become final.

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-15% -10% -5% 0% 5% 10%

DHS * -22%

NOAA -18%

USDA

DOT

DOD "S&T" *

NIH

DOE defense

EPA

USGS

VA

DOD weapons *

NIST

NASA

DOE energy

NSF

DOE Science +15%

House

request

FY 2007 R&D Appropriations (House vs. Request)Percent Change from FY 2006 (as of June '06)

Source: AAAS estimates of R&D in FY 2007 House appropriations bills. DOD "S&T" = DOD R&D in "6.1" through "6.3" categories plus medical research.JULY '06 PRELIMINARY © 2006 AAAS

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0

10

20

30

40

50

60

19

76

19

78

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

NIH

NSF

DOD

DOE

NASA

USDA

All Other

Trends in Research by Agency, FY 1976-2007* in billions of constant FY 2006 dollars

Source: AAAS analyses of R&D in annual AAAS R&D reports. * FY 2007 figures are latest AAAS estimates of FY 2007 House appropriations. Research includes basic research and applied research. 1976-1994 figures are NSF data on obligations in the Federal Funds survey.OCTOBER '06 © 2006 AAAS

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CONGRESS: WHAT’S NEXT

-The 109th Congress will leave Washington shortly, forcing the 110th Congress to complete 2007 appropriations.

-Appropriators are $5-$8 billion short in just keeping 2007 funding at 2006 levels for domestic programs.

- Until appropriations are finalized, programs are operating at the lower of FY 2007 House or FY 2006 levels, which means steep cuts for some programs (NOAA).

- Scenario 1 – In February or March, the new Congress will pass an omnibus bill, without extra money. ACI and other R&D gains would be seriously threatened.

- Scenario 2 – An omnibus bill with extra billions would risk a presidential veto. Better scenario for R&D funding.

- Scenario 3 – A year-long CR would lock in declining or flat funding for all programs except for a few exceptions.

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NEXT YEAR

-The 110th Congress will have a lot to do in its first few weeks:

1/ Finish FY 2007 appropriations.

2/ Begin consideration of the President’s FY 2008 budget, due in early February.

3/ Consider a $130-$160 billion war supplemental request in February.

- It’s unclear how ACI will fare in the FY 2008 budget, but all indications are that the Bush Administration will continue its policy of reducing domestic discretionary spending.

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MEANWHILE, IN OTHER NATIONS…

Japan has begun its 3rd S&T Basic Plan 2006-2010, including increases for R&D spending, especially fundamental research in priority areas.

China’s total R&D grew 25 percent in 2005, including a 17 percent increase in national government R&D.

South Korea’s 2007 proposed budget calls for a 10.8 percent increase in government R&D. South Korea recently surpassed the U.S. in its R&D / GDP ratio.

European Union finalized its 7th Framework program this week, with large increases for EU-wide science funding 2007-2013.

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TO LEARN MORE…

The AAAS R&D web site is

www.aaas.org/spp/rd

AAAS R&D Budget and Policy Program