Research and Development in the 1999 Budget:
This report presents information on Federal proposed fiscal year (FY) 1999 budget authority for the research and development (R&D) components of agency programs. The data were submitted by Federal agencies to the Office of Management and Budget in early 1998. This report documents historical data not affected by current legislation and therefore can be used for tracking funding trends. The report also provides detailed data on Federal R&D authorizations not readily available from other sources.
In the first half of 1998, the administration proposed total budget authority of $75 billion for FY 1999 for all Federal R&D programs, an increase of 2 percent from the estimated 1998 R&D total of $74 billion (table 1). After adjusting for expected inflation, proposed R&D budget authority will stay the same as the FY 1998 level. Budget authority for R&D grew 3 percent between FY 1997 and FY 1998 (an increase of 1 percent in constant dollars).
The largest 1999 R&D increase ($1 billion) is slated for health (budget function code 550), which mostly includes health programs of the National Institutes of Health (NIH).
Among individual functions, the largest FY 1999 R&D decrease ($0.2 billion) is slated for space research and technology (budget function code 252), which includes space programs of the National Aeronautics and Space Administration (NASA).
The administration proposed more than half (53 percent) of its FY 1999 R&D budget authority for defense (budget function code 050), which includes military programs of the Department of Defense (DoD) and the atomic energy defense activities of the Department of Energy (DOE). Proposed defense-related R&D funding is $39.7 billion in FY 1999, a slight decrease from the preliminary 1998 level of $39.9 billion. This proposed decrease reverses the rise of nearly 1 percent in budget authority for defense-related R&D between FYs 1997-98. However, R&D funding within the national defense function has continued to decrease in real terms since 1993 (with the exception of a 2.5-percent increase between FYs 1996-97). The proportion of R&D funds proposed for defense-related activities has declined from 59 percent in FY 1993 to 53 percent in FY 1999.
The proposed real decrease in defense-related R&D budget authority is offset by an increase in proposed funding of civilian R&D in FY 1999. Nondefense R&D funding is anticipated to grow by about 5 percent to $35.5 billion in FY 1999 (3 percent in constant dollars). Civilian-related activities represent 47 percent of Federal funding for the conduct of R&D.
The five largest budget functions with respect to R&D expendituresnational defense, health, space research and technology, general science, and natural resources and environmenttogether account for 92 percent of all proposed Federal R&D funding. The health and general science functions are expected to receive increased funding for R&D in FY 1999. Highlights of proposed R&D funding by function in the FY 1999 budget follow.
- National defense R&D funding (function 050) is expected to drop by $0.2 billion (down 0.4 percent) below the FY 1998 level. Army would experience a decrease in funding, losing 5 percent (a drop of $0.2 billion) of its research, development, test, and evaluation (RDT&E) funds. Air Force RDT&E would decline 3 percent, from $14 billion in FY 1998 to $13.6 billion in FY 1999. Among the defense agencies, the Ballistic Missile Defense Organization (BMDO) funding is expected to decline 3 percent between FYs 1998-99. However, the Defense Advanced Research Projects Agency (DARPA) expects to stay at its FY 1998 level. Only one of DOE's defense-related R&D programs will gain funding over its FY 1998 level-weapons activities, up 19.5 percent. Weapons activities includes funding from the stockpile stewardship and stockpile management accounts. DOE plans to decrease funding for naval reactors development by 1 percent, to $0.6 billion. Its environmental restoration and waste management programs are to decrease by 37 percent, to $0.1 billion in FY 1999. DOE's other defense-related R&D programs are expected to get nearly the same funding as in FY 1998.
- The administration proposes an 8-percent increase ($1 billion) in health-related R&D (function 550) to $15 billion in FY 1999. Most of this proposed growth is for the basic and applied biomedical and behavioral research programs of NIH, which will account for 95 percent of all Federal health R&D. R&D programs for all except one component of NIH will receive greater support in FY 1999 than in FY 1998.
Funding for NIH's Office of the Director is expected to fall 17 percent. The Office of the Director provides support to the Women's Health Initiative and other research activities. More than $2 billion is proposed for R&D projects at the National Cancer Institute. Also, $1.7 billion is proposed for R&D on AIDS/HIV within the Office of AIDS Research, and $1.6 billion is slated for R&D programs at the National Heart, Lung, and Blood Institute. The National Institute of Diabetes and Digestive and Kidney Diseases expects to receive a 7-percent increase (up $62 million) over FY 1998. The National Institute of Neurological Disorders and Stroke expects an 8-percent increase (up $58 million) over FY 1998.
- R&D budget authority for space research and technology activities (subfunction 252) of NASA is expected to decrease nearly 3 percent below the FY 1998 funding level. It will decrease by $0.2 billion, to $8 billion. NASA expects to fund its largest program, space station research, at 2 percent below the FY 1998 level. NASA also plans to decrease R&D funding for its space transportation technology program (down 4 percent) and for its mission communication services (down 6.5 percent to $0.4 billion). The space science program, NASA's second largest R&D account, is expected to receive $2.3 billion, up 1 percent from FY l998. Decreases are scheduled for R&D activities for earth science (formerly the Mission to Planet Earth program) which will receive a decrease of $41 million (down 3 percent), to $1.5 billion in FY 1999. The administration also proposes that NASA receive increases for life and microgravity sciences, increasing $23 million from the FY 1998 level.
- Research funding for general science (subfunction 251) in FY 1998 is 43 percent above (an increase of more than $1 billion) the FY 1997 level because a number of DOE programs were reclassified from energy R&D (function 270) to general science R&D. However, research funding for general science is expected to increase by 10 percent, or $0.4 billion in FY 1999, to nearly $5 billion. It would account for 6 percent of the total Federal R&D budget authority. Had DOE not changed its appropriation account structure, general science research funding would have increased by $380 million in FY 1999, up 12 percent from a smaller FY 1998 base. Almost 60 percent of the general science dollars are slated for the National Science Foundation (NSF); the remaining funds are for DOE general science programs. All NSF programs are expected to gain funding, ranging from 6-20 percent over their FY 1998 levels. NSF expects to increase research funding for mathematical and physical sciences (NSF's largest research program) by $76 million or 11 percent above the FY 1998 level. Also, NSF proposes to direct $50 million more toward geosciences research (NSF's second largest research program), up 12 percent.
DOE's research budget is expected to grow 8 percent with increases in nuclear physics (up $51 million or 22 percent above the FY 1998 level), basic energy sciences (up $45 million or 7 percent), high energy physics programs (up $31 million or 6 percent), and computational and technology research (up $11 million or 8 percent).
- Natural resources and the environment R&D funding (function 300) is expected to stay at the FY 1998 level of $2 billion in FY 1999. It will comprise nearly 3 percent of the total Federal R&D budget authority. Within this functional category, the largest share ($0.6 billion, comprising 32 percent of the R&D funding for natural resources and the environment) is proposed for the Environmental Protection Agency's (EPA's) pollution control and abatement efforts. Nearly all of EPA's R&D funding for pollution control and abatement is for EPA's science and technology activities, which include budget authority for R&D transferred from EPA's Superfund account.
The National Oceanic and Atmospheric Administration (NOAA) plans to decrease its natural resources initiatives by 5 percent from $543 million in FY 1998 to $518 million in FY 1999. NOAA's natural resources initiatives include NOAA's oceanic and atmospheric research programs and initiatives.
- Transportation R&D funding (function 400) is expected to decrease by 1 percent to $1.9 billion in FY 1999. Transportation R&D will comprise 2.5 percent of total Federal R&D budget authority. Three-fourths of the transportation R&D funding is slated for air transportation research mostly by NASA for aeronautical research and technology. Funding for ground transportation (supported entirely by the Department of Transportation) will account for 21 percent of the total transportation R&D.
- A 29-percent increase (up $0.3 billion) is proposed for energy R&D (function 270) to $1.5 billion in FY 1999, even with several programs in energy supply being reclassified in FY 1998 to the general science function. Energy R&D will comprise 2 percent of total Federal R&D budget authority. The increase in energy funding is due largely to more support for the fossil energy programs (specifically for the petroleum, coal, and gas program) and for the energy supply activities. DOE expects to cancel $40 million in unspent, previously appropriated funds for its clean coal technology program under the fossil energy account in FY 1999. However, the increase in funding for DOE's energy supply programs is attributable to greater support for the solar and renewable energy account, an increase of $88 million, and nuclear energy programs, an increase of $69 million. The Tennessee Valley Authority is expected to get $2 million less than its FY 1998 funding level, an 8-percent decrease. The Nuclear Regulatory Commission expects to receive $8 million less than it did in FY 1998, down 13 percent.
- Funding for agricultural R&D (function 350) is expected to increase in FY 1999 by 2 percent to $1.3 billion, and would account for under 2 percent of the total Federal R&D budget authority. Nearly 60 percent of the Department of Agriculture's (USDA's) R&D funding is for the Agricultural Research Service (ARS), an intramural research agency with primary responsibility for providing initiative and leadership in agricultural research. Several initiatives, including the research on plant sciences, commodity conversion and delivery, and animal sciences, are funded by ARS. The ARS has 101 research locations throughout the United States and abroad. Another USDA program, the National Research Initiative (NRI), is expected to increase 34 percent to $130 million in FY 1999. NRI programs support research on integrated pest management, biological control of pests and diseases, human nutrition, plant genome, water quality, food safety, sustainable agriculture, and agricultural systems.
- The remaining eight functions each have less than $0.5 billion in proposed FY 1999 R&D budget authority. However, overall R&D for these functions is expected to increase by more than 10 percent ($148 million) to $1.6 billion. The main areas of this growth are in commerce and housing credit (up $80 million); veterans benefits and services (up $28 million); and education, training, employment, and social services (up $17 million).
- R&D funding for commerce and housing credit (function 370) is expected to increase by 21 percent ($80 million) to nearly $0.5 billion. This total reflects increased support for the Advanced Technology Program (ATP) funded at the National Institute of Standards and Technology (NIST). NIST expects to increase ATP funding by 40 percent, $68 million above the FY 1998 level. ATP funds precompetitive R&D on commercial technologies on a cost-shared basis through a competitive process. Funding for research and general education programs (subfunctions 501-3) of the Department of Education and Smithsonian Institution is expected to increase by 23 percent ($58 million) to $312 million.
- The administration proposes to increase funds for international affairs (function 150) by 2 percent, to $175 million in FY 1999. This increase is due mainly to additional funding of the global programs in the Agency for International Development (AID). AID supports programs in four areas: population and health, broad-based economic growth, environment, and democracy.
- Funding for administration of justice (function 750) of the Departments of Justice and Treasury is expected to decrease by 7 percent to $71 million in FY 1999. This decrease is due mainly to an 8- percent drop in R&D funding at the Office of Justice Programs (OJP) in the Department of Justice. OJP provides Federal leadership, coordination, and assistance needed to make the Nation's justice system more efficient and effective in preventing and controlling crime.
- A 10-percent increase (to $300 million) is slated for veterans benefits and services (function 700), due to increased funding of the medical and prosthetic research programs in the Department of Veterans Affairs. R&D funding is also expected to increase 26.5 percent (to $62 million) in community and regional development (function 450) because of the Department of Housing and Urban Development's increased R&D funding. Funding for income security (function 600) is expected to increase 60 percent to $30 million in FY 1999. R&D funding is expected to stay at the FY 1998 level for general government (800), which includes $2 million for engraving and printing activities supported by the Department of Treasury.
Distribution of Total R&D Budget Authority Among Functions
The five largest R&D functions in FY 1999-defense, health, space research and technology, general science, and natural resources and the environment-account for 92 percent of all proposed Federal R&D budget authority. Transportation, energy, and agriculture each account for between 1 and 3 percent of Federal funding of R&D. The remaining eight functions each account for less than 1 percent of the total 1999 proposed R&D budget authority (table 2).
During the early and mid-1980s, practically all growth in Federal R&D support was defense-related (figure 1). Since FY 1986, however, defense R&D has dropped significantly from its peak 69-percent share of the Federal total to the proposed 53-percent share for 1999 (table 3). Despite this decline, defense is expected to receive more than two and one half times the budget authority for R&D than the next largest function, health.
Proportions of only four functions of the total R&D budget authority are expected to be notably larger in 1999 than in 1998health (18.4 percent of the total R&D budget authority in FY 1998 and 19.4 percent of the total R&D budget authority in FY 1999); general science (5.7 percent in FY 1998 and 6.2 percent in FY 1999); energy (1.6 percent in FY 1998 and 2.0 percent in FY 1999); and commerce and housing credit (0.5 percent in FY 1998 and 0.6 percent in FY 1999). Proportions for natural resources and the environment; agriculture; education, training, employment, and social services; international affairs; veterans benefits and services; community and regional development; administration of justice; income security; and general government are expected to stay approximately the same as in 1998. Based on the administration's budget proposal, proportions of three functions would drop notably in FY 1999defense (54.1 percent of the total budget authority in FY 1998 and 52.8 percent of total budget authority in FY 1999), space research and technology (11.2 percent in FY 1998 and 10.7 percent in FY 1999), and transportation (2.6 percent in FY 1998 and 2.5 percent in FY 1999).
The administration proposes to increase budget authority for basic research by 7.7 percent in FY 1999 to $17 billion (table 4). When adjusted for expected inflation, this would be about a 6-percent increase from the estimated FY 1998 level. The basic research share of total R&D budget authority has slowly increased from 15 percent in FY 1986 to the proposed 22 percent in FY 1999 (figure 2).
Four of the five largest R&D functionsdefense, health, space research and technology, and general scienceare also the largest basic research functions; they account for 90 percent of the basic research total (figure 3). Health ($8 billion) accounts for the largest share (47 percent) of the requested FY 1999 basic research total, followed by general science ($4 billion) and space research and technology ($1.7 billion). Defense accounts for $1.2 billionor nearly 7 percentof the proposed basic research total, but only 3 percent of the defense R&D total is basic research. (The basic research portion of the defense R&D total has remained at about 3 percent for the last eight years.) Of the nondefense R&D total, 44 percent is basic research.
R&D's Share of Total Budget Authority
R&D funding as a percentage of the total funding for functions in which R&D is conducted remains at about 8 percent (table 5). Since FY 1990, the percentage has fluctuated narrowly from a low of 7.6 percent in FY 1991 to a high of 8.2 percent in FY 1996. For functions that include R&D activities, only three (energy, general science, and space research and technology) are expected to be more than 60 percent of each function's total budget authority. (Energy R&D is greater than total energy budget authority because gross budget authority (spending) has been reduced by offsetting receipts, resulting in total net budget authority (spending minus receipts) that is less than R&D budget authority.) The R&D shares in the other functions range from a high of 15 percent for national defense to less than 0.1 percent for income security and general government. Only five functions (health, energy, natural resources and environment, veterans benefits and services, and commerce and housing credit) will show an increased share of their budget authority directed toward R&D in FY 1999. The R&D shares of four functions (defense, space research and technology, transportation, and agriculture) are expected to drop; the remaining functions' R&D shares will each stay at the FY 1998 levels.