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NSF Congressional Highlight
The Balanced Budget Agreement of 1997 - What It Means for the National Science Foundation

May 21 1997

On May 20, 1997, the House passed a budget resolution reflecting the bipartisan reached by the Congressional leadership and the White House last week. The budget agreement would balance the federal budget by 2002, provide tax relief totaling $85 billion, restrain the growth in discretionary spending, and attempt to slow the growth in Medicare, Medicaid, and other entitlement programs.

The budget resolution provides overall numerical targets for federal spending and revenue over a five year period. Here are the totals and subtotals for overall federal discretionary spending from which funding for science -- among other programs --originates (in billions of dollars):

 

1998

1999

2000

2001

2002

Defense

BA

269

272

275

282

290

Outlays

267

267

269

271

272

Domestic

BA

258

261

262

260

261

Outlays

286

293

295

294

288

ASSUMPTIONS IN THE BALANCED BUDGET AGREEMENT

While the Budget Committees traditionally give general instructions for implementing the budget resolution the current balanced budget agreement is unusual because it contains an extraordinary number of highly specific policy and budgetary assumptions. For example, the budget agreement not only specifies the total level of tax relief, but includes a specific target of tax relief for education purposes. On the domestic side of the spending plan specifically protects certain key domestic programs that were listed as priorities of the administration. Equally important is the list of programs not protected in the agreement including Americorps, GOALS 2000, GLOBE and the ATP program. Missing from either of these lists are most science programs including the National Science Foundation, the National Institutes of Health, NASA and the space program.

FUNCTION 250 -- GENERAL SCIENCE, SPACE AND TECHNOLOGY

Spending on federal programs in the budget resolution is broken out by function. NSF funding is lumped together with spending for NASA and DoE Basic Sciences in Function 250 - General Science, Space and Technology. Little detail is usually provided by the Budget Committees on how this total spending should be allocated, that allocation is left to the appropriations committees.

This year's resolution calls for science, space, and technology spending levels of $16.2 billion in budget authority and $16.8 billion in outlays in fiscal year 1998. Compared to FY 1997, the resolution provides about $500 million less in budget authority, and about $100 million less in outlays. By FY 2002, the resolution calls for appropriations for science, space, and technology to drop to $15.6 billion, 6% less than the current appropriations level. The agreement is also below levels in the President's FY 98 budget request: for FY 02, budget authority for Function 250 would be $660 million or 4.25% less than the President's request. Over five years, total budget authority for Function 250 under the budget agreement would fall $1.95 billion or 2.4 % below the FY 98 request.

Function 250 - Budget Agreement FY 98
(in billions of dollars)

 

FY97

FY98

FY99

FY00

FY01
FY02

Total
FY98-02

BA

16.70

16.20

16.20

15.90

15.80 15.60

79.80

OL

17.00

16.90

16.50

16.00

15.90 15.70

81.00

Function 250 - Clinton Request FY 98
(in billions of dollars)

 

FY97

FY98

FY99

FY00

FY01
FY02

Total
FY98-02

BA

16.67

16.48

16.46

16.28

16.27 16.26

81.75

OL

16.55

16.49

16.42

16.19

16.08 16.10

81.28

An alternative budget resolution -- known as the "Investment Budget" -- was offered on the House floor by Rep. George Brown (D-CA). This proposal would have expanded the funding for Function 250 and other research accounts, along with increased spending on transportation and education. The Brown substitute called for total Function 250 spending of $96 billion between FY 1998 and FY 2002 or almost $16 billion more than the resolution. The Brown substitute which would have achieved balance by 2002, but would have reduced defense spending significantly more than the bipartisan budget agreement to pay for the additional research and education spending. As a result the Brown substitute failed to widespread support.

THE NEXT STEP

Now comes the serious heavy lifting as the various Congressional committees move to translate the savings called for in the budget agreement into actual program changes.

The Ways and Means and Finance committees will have to come up with changes in the tax code and in entitlement programs to achieve much of the budget savings assumed in the agreement while at the same time provide the tax relief called for by both the Congressional leadership and the White House.

The appropriations committees must live with very tight caps for discretionary spending. While these caps have not been announced for FY 1998, the House leadership estimates that total domestic discretionary spending will increase by only $5.5 billion or 2% over the FY 1997 levels -- a 1.1% decrease in inflation-adjusted non-defense discretionary spending.

For NSF, the budget agreement means uncertainty and opportunity. For example, NSF could benefit if the budget agreement provides sufficient relief for some of the Section 8 housing programs that lie within the VA/HUD appropriation. NSF could also benefit if changes in law enable the Veterans' Administration to retain for itself certain health fees instead of having those user fees transferred to the U.S. Treasury.

Other helpful actions include the recent passage of a generous FY 1998 NSF authorization bill last month by the House. And NSF could further benefit if a similar authorization bill in the Senate could move in the next few weeks.

On the other hand, appropriators will be under severe pressure from every interest group as the spending is not likely to grow appreciably in the near future. So the competition for available resources will only get more intense. Within the VA/HUD appropriation, advocates for environmental programs will be competing with advocates for the space station who in turn will be competing with those supporting the AmeriCorps program who in turn will be in competition with the academic research community. The budget agreement means that resources available to the appropriations subcommittees are -- and will remain -- extremely tight and this will only increase the pressure on federal programs and their constituencies to demonstrate how they contribute in meaningful ways to the health and well being of the Nation.

See also:

 

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