Part 2: The President's FY2003 Budget for Research and Development - an analysis by the House Science Committee Minority Staff

Part: [1] [2] [3]


National Aeronautics and Space Administration

The FY03 budget request for NASA is $15.0 billion (0.66 percent) increase over the FY02 appropriation. The Administration's five-year budget projects the NASA budget growing to $16.79 billion in FY07. While the budget essentially is flat-funded in FY03 relative to FY02, it is difficult to make specific comparisons to FY02, since the OMB still hasn't approved NASA's proposed FY02 Operating Plan for submission to Congress.

At the same time, the budget materials released by the Administration contain enough detail to allow one to conclude that the FY03 NASA request is not so much a "status-quo" budget as a "devil-is-in-the-details" budget. That is, the budget request contains assumptions and implicit (and explicit) policy directions that are only partially explained in the budget documents. Thus, the total implications of the budget request and associated policy initiatives are not likely to become clear for some time.

For example, in the Human Space Flight account, the budget projections assume that $560 million in savings will be realized in the Space Station program in order to achieve the 3-person "Core Complete" station mandated by OMB, which raises the issue of what the impact on the program will be if those assumed savings do not materialize. In addition, the Space Shuttle account suffered a $65 million cut in FY03, even though a roughly $1 billion funding shortfall over the next five years was identified by the Shuttle program last year. The Shuttle flight rate will be cut back from 6-7 flights per year to 4-5 flights as part of the OMB's plan for dealing with the funding shortfall. In addition, the Shuttle's safety and supportability upgrades program has been cut by about $500 million over the next five years. As an example of what some would call "robbing Peter to pay Paul," some $300 million of those deleted Shuttle upgrades funds have been redirected to pay for upgrading/maintaining Shuttle infrastructure and facilities.

Although the budget request highlights a 12 percent increase in funding for Aerospace Technology, essentially all of that increase is for a single project: the 2nd Generation Reusable Launch Vehicle (RLV) project. The other activities in Aerospace Technology are either flat-funded or cut. In particular, according to NASA's accounting, the budget for "Revolutionizing Aviation" is cut by almost 10 percent in the FY03 request relative to the FY02 appropriation.

The Earth Science budget is essentially stagnant or declining in real terms over the next several years. Even the parity between the FY02 and FY03 budgets is somewhat artificial given the fact that about $60 million of the FY03 funding is for support of ground network operations - funding that was previously provided in the Human Space Flight account and does not represent additional funds available for Earth Science initiatives. In addition, the budget request states that no new follow-on missions of the Earth Observing System will be initiated until a review of the U.S. Global Change Research Program has been completed - with no timetable being set for the completion of that review.

The Biological and Physical Research (BPR) Enterprise is funded at $842.3 million (2.3 percent) increase over FY02. The five-year budget for BPR reflects the elimination of $1 billion from the Space Station research program that resulted from OMB's restructuring of the program.

The Space Science account is funded at $3.414 billion (19 percent) an increase over the FY02 appropriation. About $191 million of the increase is artificial, reflecting the transfer of the Deep Space Network operations from the Human Space Flight account, where it had been previously funded. Funding was added in FY03 for an initiative to develop space-based nuclear power and nuclear propulsion systems for solar system exploration. Such an initiative could generate some public controversy. In addition, OMB addressed the competition between the Pluto-Kuiper Express mission to Pluto (added by Congress to the FY02 NASA appropriation) and the Europa Orbiter mission (a mission to send a probe to one of Jupiter's moons that is believed to have a water ocean) by canceling both of them. In their place, NASA has announced its intention to initiate a "New Frontiers" program (at a level of $15 million in FY03) to develop cost-capped, competitively procured deep space missions.

Finally, the Academic Programs account was cut from the FY02 appropriation of $227.3 million to a level of $143.7 million in FY03 with flat funding projected through FY07. Presumably, NASA would propose to absorb the cut by eliminating Congressionally sponsored projects funded in the FY02 appropriation.

As was previously indicated, some of the most significant policy shifts being contemplated by the Administration are not discussed in any depth in the budget request. The Administration's intentions in these areas are still to be clarified. These include: implementation of the results of NASA's Strategic Resources Review that purportedly is addressing Center roles and missions, infrastructure consolidation/elimination, and so forth; the Shuttle privatization initiative mentioned but not explained in the budget request; NASA's proposed commercial policy; NASA's potential workforce flexibility initiative; the proposed Space Station Non-Governmental Organization (NGO), and the plans for resolving the agency's infrastructure revitalization backlog. Taken as a whole, these initiatives are likely to have more of an impact, for better or worse, on the long-term health of NASA than the specific funding levels outlined in the FY03 budget request.

National Science Foundation

Using the National Science Foundation's definitions of research as opposed to those used by OMB, the President's FY03 budget proposal for NSF is $5.029 billion, which is $233 million (4.9%) above the appropriations level of $4.796 billion in FY02. Of the increase, 32% ($76 million) comes from the transfer of existing programs to NSF from other agencies. Therefore, the actual NSF budget increase for new activities is 3.3%.

Research and Related Activities (R&RA). The FY03 funding level for R&RA is $3.783 billion, which is $185 million (5.1%) above the FY02 appropriations level. The 6 research directorates and the Office of Polar Programs received 2.5% to 3.5% increases, except for Geosciences (+13.4%) and Social Sciences (+15.9%). All but 1% of the increase for Geosciences results from transfer of 3 existing programs from other agencies: Environmental Education from EPA ($9 million), National Sea Grant program from NOAA ($57 million), and Hydrology of Toxic Substances from USGS ($10 million). The increase for the Social Sciences includes seed funding for a new priority area that explores the interactions among society, its institutions and technology. Other initiative areas that receive increases or are level funded include Biocomplexity in the Environment ($79 million; 36%), Nanoscale Science and Engineering ($221 million; 11%), Mathematical Sciences ($212 million; 40%), and Information Technology Research ($678 million; 0%).

Education and Human Resources (EHR). The FY03 funding level for the base EHR programs is $908 million, which is $33 million (3.8%) above the FY02 appropriations level. The H-1B program receipts for FY03 (designated for undergraduate scholarships and K-12 science education programs) are expected to be $92.5 million, which is $2.5 million (3%) above FY02. The total for EHR is then $1.001 billion (3.7%) above current levels. The request allocates $200 million (25%) for the second year of the Math and Science Partnerships between institutions of higher education and K-12 school systems and increases support for graduate programs by $23 million (22%) to increase student stipends. These increases total $30 million above the amount of new funding, which translates into cuts for undergraduate programs (-4.8%), programs to increase participation by underrepresented groups (-7.4%), and EPSCoR (-17.6%).

Major Research Equipment &Facilities Construction (MREFC). The FY03 funding level for MREFC is $126.3 million, which is $12.5 million (-9%) below the FY02 appropriations level. The request provides $35 million to start construction of EarthScope, an earthquake detection and research network, and $12 million to establish two prototype sites of the National Ecological Observatory Network (NEON). The fourth increment ($13.6 million) is provided for construction of the Network for Earthquake Engineering Simulation (NEES), the second increment for ALMA ($30 million), the final increment for the LHC ($9.7 million), the final increment of the second terascale computing system ($20 million), and a supplemental allotment ($6 million) for the new South Pole Station. No follow-on funding is requested for the environmental research airplane, HIAPER ($35 million appropriated for FY02) nor for the neutrino detector at South Pole, Ice Cube ($15 million appropriated for FY02), both projects being characterized as having lower priority than EarthScope, NEON and ALMA.

Department of Energy

The Department of Energy's R&D programs appear to be moving toward consolidation in several areas: smaller and reduced coal R&D, an oil and natural gas technologies; more focused and increased nuclear reactor programs with reductions in optimization of existing nuclear plants, spent fuel reprocessing and transmutation, and advanced nuclear medicine; and, increased emphasis on the development of advanced vehicles based on hydrogen technologies.

Science. The request provides for $3.279 billion for FY03, an increase of approximately $5 million over the comparable FY02 appropriation; essentially no change. All programs except Program Direction (-9%) and biological and environmental research (-12%) are increased from 1 to 15 percent. The Department notes that emphasis has been given to infrastructure improvements at laboratory facilities (15%), not only because of the need for increased security but also because many of the facilities are aging and in poor condition. Other increases are provided to allow for additional operating hours at fusion and nuclear physics facilities.

The Biological and Environmental Research program FY02 funding of $570 million contains $69.8 million of what DOE describes as earmarked programs which are eliminated in the FY03 request for $504 million. The Genomes to Life program is increased by $15.2 million while the Human Genome Project and Climate Change Research programs are increased only slightly.

Nuclear Energy, Science and Technology. The request is for $250 million, a decrease of $43 million (-15%) from the comparable FY02 appropriation. Nuclear Energy Technologies is increased from $12.0 to $46.5 million (+288%), while the Nuclear Energy Plant Optimization ($6.5 million in FY02) and Advanced Nuclear medicine Initiative ($2.5 million in FY02) are not funded.

Within the Nuclear Energy Technologies program the Nuclear Power 2010 request increases from $8.0 million (FY02) to $38.5 million (FY03). This comes at the expense of the Spent Fuel Pyroprocessing and Transmutation program, which is decreased by 76% (to $18.2 million) from the FY02 comparable appropriation of $77.2 million.

Fossil Energy Research and Development. The request is $494 million, a decrease of $93.0 million (-16%) from the comparable FY02 level of $587 million. The coal research program (which includes the President's Clean Coal Technology program) request is $325.6 million, a $12.8 million (-3.8%) decrease from the 2002 comparable appropriation of $338.4 million. Major decreases are requested in the oil and natural gas technologies programs. For example, Natural Gas Technologies programs are decreased from the FY02 comparable appropriation of $45.2 million to $22.6 million (-50%). Oil Technologies are cut from $56.0 million to $35.4 million (37%), and Cooperative R&D is cut 27% to $6.0 million.

Energy Conservation. The FY03 request is for $904 million, a decrease of $9 million (-1%) from FY02. Weatherization grants are increased to a level of $277.1 million (+20%), while the other programs are reduced an average of ten percent.

Renewable Energy Resources. The request is for $407.72 million, an increase of 5% over the current appropriation of $386.406 million. Among the R&D programs, the Hydrogen program is increased to $7.5 million (up 50%), Hydropower programs are increased to $7.5 million (up 50%), and Wind energy systems are increased to $44.0 million (+14%). The Hydrogen program increases reflect the Administration's National Energy Policy emphasis on hydrogen research, including the Hydrogen Energy Development Initiative, and development of storage technologies. Renewable support and implementation programs are up by more than $10 million (+74%) with the greatest increases in the International Renewable Energy Program (+129%) and Renewable Indian Energy Resources (+193%).

Department of Commerce

Technology Administration (TA). The request for $8.1 million is consistent with budget requests from past years. There are no new initiatives slated within TA and the request maintains existing activities. However, TA served as the secretariat for the Partnership for a New Generation of Vehicles, the duties of which have been moved to DOE under the new FREEDOM car initiative. Considering that TA will no longer play a role in this program, the budget request will result in an increase to staff the secretariat.

National Institute of Standards and Technology (NIST). The NIST funding is increased by $59 million (18%) to a level of $385 million. However, this increase is misleading. A portion of this funding arises from an accounting shift of approximately $15 million of laboratory funding previously accounted for in the Advanced Technology Program (ATP) budget. The FY03 budget request simply shifts the ATP funding to the lab request. This ATP funding shift will be used to fund new initiatives in nanotechnology and healthcare. A significant portion of the increase ($35 million) is a one-time cost for purchasing new equipment for the Advanced Metrology Lab in Gaithersburg. Take away these accounting shifts and one-time costs, and NIST's budget increase in FY03 is $9 million (2.8%).

The FY03 request of $146 million for ATP is a 21% decrease from last year's appropriation of $185 million. Like last year's request, the FY03 request is not realistic but relies upon a number of improbable assumptions. The FY03 request is based on the assumption that only half of the FY02 funds available for new awards will be used and that approximately $30 million will be available for carry-over in FY03. If ATP makes the anticipated $60.7 million in new awards this year, the FY03 request will have a shortfall of approximately $50 million.

The Administration proposes to eliminate federal funding for the Manufacturing Extension Program. Congress has strongly supported this program in the past and it is unlikely the program will be eliminated. This seems to be similar to the budget savings the Administration sought last year when it recommended eliminating the ATP. The Administration seems to implicitly be counting on Congress to maintain the MEP, as $12.9 million of the request in NIST is required for MEP activities in the program office in Gaithersburg. The MEP is a federal/state/private partnership. By law, the federal contribution is limited to 1/3 with the other 2/3 funding made up from state contributions and fee-for-service work. Without federal funding it's difficult to justify the need for federal programmatic coordination. The Administration's proposal could cause states to eliminate their funding as well. If both state and federal contributions are eliminated there will be no MEP. This request sends the wrong signal to both state governments and small business.

The FY02 NIST construction appropriation included $41.5 million in earmarks leaving only $20.9 million for non-directed construction and maintenance activities. The FY03 request maintains level funding for maintenance activities, but also includes $15 million for the completion of the Advanced Metrology Lab in Gaithersburg and $17.3 million for phase I of the central utility plant in Boulder.

National Oceanic and Atmospheric Administration

The overall budget request for NOAA is $3.2 billion, a decrease of $48 million (-1%). The Oceans and Atmospheric Research (OAR) account is funded at $301 million (-21%) and the National Ocean Service is funded at $404 million (-20%). The National Weather Service budget increases by $30 million (4%) over last year's level to $801 million.

Most of the decrease in funding for OAR is due to moving the Sea Grant College Program to the National Science Foundation budget. Interestingly, $5 million is retained to pay for staff who, presumably, will no longer be working on Sea Grant solicitations. After accounting for the Sea Grant transfer, the Ocean, Coastal, and Great Lakes research program is cut by $21 million (-28%) to a level of $54.2 million. The entire $21 million cut comes from the Other Partnership Programs which is funded at $5 million.

The NESDIS budget increases $57 million (9%) to a level of $758 million.

Environmental Protection Agency

The Administration request for Science and Technology programs at EPA is $685 million (-17%) below the current estimate for FY 2002 and $24 million below the FY2000 actual amount. Even if the supplemental appropriation EPA received in Public Law 107-38 is excluded from the estimated 2002 level of funding, the FY2003 represents a 4% cut in funding for S&T programs at the Agency.

Although the Administration's request indicates an intention to allocate $75 million to continue a research program on technologies and procedures to cope with biological and chemical contamination resulting from terrorist activities, no additional resources have been added to EPA's budget to fund this new program.

Department of Transportation

The President's FY03 budget request for the FAA RE&D activity is $127 million, which is $118 million (-48%) below the FY02 appropriations level. The decrease primarily reflects the transfer of aircraft safety R&D activities to the Transportation Safety Administration (activities funded at $94.5 million in the RE&D account for FY02). The change is not expected to impact the Science Committee's jurisdiction over safety R&D at TSA. The remaining programs within RE&D are funded at levels close to FY02, except for noise research (which drops from $16 million to $1.2 million), information system security (drops from $2.6 million to zero), and support for the Hughes Tech Center (drops from $12.2 million to $6.4 million). It appears that some of the funding for these activities has been transferred to the Facilities and Equipment account, continuing a trend of siphoning funds from RE&D.

Federal Emergency Management Agency

The President's FY03 budget request for the U.S. Fire Administration (USFA) is $40.6 million, which is $9.7 million (-19.3%) below the FY02 appropriations level. This reduction reflects the end of a one-time fire safety initiative ($5 million) to increase awareness of fire hazards by high-risk populations, and the transfer of the anti-terrorism grant program ($5 million) to the new National Preparedness for First Responder program. Consequently, funding for the remaining USFA programs is frozen. The request is $9.4 million below the current authorization level, which includes $8 million for the anti-terrorism grant program.

Also, the budget request proposes to transfer the Fire Grants Program ($150 million FY02 appropriation, plus $210 million from the FY02 emergency supplemental appropriation), which was administered for its first two years by USFA, to the new National Preparedness for First Responder program.


Department of Defense

The tragic events of September 11 necessitate an increased focus on the military and homeland security. The President's request reflects this increased emphasis by increasing federal spending on research and development at DoD by $5.373 billion to a total of $54.5 billion (11%). This accounts for 63% of the increase in federal R&D. All but $3 million of this increase is for /tea"VLdevelopment activities at DoD meaning research (basic and applied) are flat funded. The development of a Joint Strike Fighter accounts for nearly $2.0 billion of this increase.

In aggregate terms, the Administration is requesting a total of approximately $58 billion (8% increase) for defense-related R&D, $54.5 billion in the Department of Defense and approximately $3.5 billion to support the defense research activities within the Department of Energy.

Health and Human Services

The budget request for R&D at the Department of HHS is up $3.745 billion (13%), to $27.683 billion. NIH is increased by $3.902 billion, meaning the rest of HHS received a nominal cut of $157 million. Of special note is the $176 million cut to the Center for Disease Control (CDC), which lowers the request to $3.9 billion. The request assumes $57 million less spending on chronic disease prevention and health promotion, $29 million less for occupational safety and health, and $31 million less for public health improvement.

Department of the Interior

Total budget authority requested for the Department of Interior, including trust funds, is $10.3 billion - a mere $12 million below the current level. Funding for the U.S. Geological Survey is $867.3 million, a decrease of $33 million (4%) when the assumed transfer of the $13.9 million Substances Hydrology Program to NSF is included.

Department of Agriculture

Due to the Administration's announced effort to end all Congressional earmarks, the USDA R&D budget request was cut by $233 million (10%) to $2.1 billion.

Global Change

The FY03 research budget for the U.S. Global Change Research Program is $1.714 billion, an increase of $44 million (3%). This account includes climate R&D funding from nine Federal agencies. In addition, the President is funding two initiatives at $40 million each, the National Climate Change Technology Initiative at DoE and the Climate Change Research Initiative at five agencies. It is unclear whether these new initiatives, which build on the President's announcement in June of 2001, are new programs or continuations of prior programs.

Networking and Information Technology R&D

The Networking and Information Technology R&D initiative of seven different agencies is funded at $1.890 billion, an increase of $46 million (2%).

The National Earthquake Hazards Reduction Program (NEHRP)

NEHRP is a multi-agency program funded by FEMA, NSF, USGS, and NIST. FEMA is the lead agency charged with coordinating the program.

The President's FY03 budget request for NEHRP is $117.9 million, which is $10.6 million below (-8.2%) the FY02 appropriations level. The main reason for this decrease is the $10.8 million drop in the next to last funding increment for construction by NSF of the George E. Brown, Jr. Network for Earthquake Engineering Simulation. The agency components of NEHRP are otherwise flat funded: FEMA, $17 million; USGS, $51.1 million; NSF, $47.4 million; and NIST, $2.5 million.

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