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The Federal R&D Budget: Process and Perspectives

Gain insights into the complex and evolving federal R&D budget process, its historical trends, driving factors, agency negotiations, and congressional decisions. Learn about discretionary vs. mandatory spending, recent budget history, and key players influencing budget formulation.

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The Federal R&D Budget: Process and Perspectives

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  1. The Federal R&D Budget: Process and Perspectives Matt Hourihan April 11, 2013 for IAFF 2190W, Science, Technology, & Policy George Washington University AAAS R&D Budget and Policy Programhttp://www.aaas.org/spp/rd

  2. Two Spending Categories: Discretionary vs. Mandatory • Mandatory Spending (aka Direct Spending) • Mostly entitlements • Potential for high political sensitivity = “third rail” • Changed only by act of Congress: essentially “on autopilot” • Discretionary Spending: • Adjusted annually • Easy targets? • i.e. Sequestration • Vast majority of federal R&D is discretionary

  3. The Federal R&D Budget: The Basics • About $130 billion in FY 2013 • Down ~17% since 2010 • About half = DOD • Basic + applied research = nearly half • Fragmented • More than two dozen departments and agencies • But “top heavy” (DOD and NIH) • Funds ~60% of university R&D • Declining share of economy • Declining share of national R&D investment (vs. industry)

  4. Recent R&D Budget History • Historically large cuts this year • Recent gains: • Energy • General Science • Manufacturing • Recent stagnation / declines • Health • Agriculture • Environment • Space

  5. Q: How Did We Get Here?A: A convoluted, complicated, old and evolving process…

  6. The Federal Budget Cycle • Internal agency discussions • Joint guidance memorandum from OMB / OSTP • Defines focus areas, methods, strategy for boosts or cuts • Agencies deliver budget justifications to OMB

  7. What Drives Presidential R&D Budget Formulation? Incrementalism Administration priorities Program priorities & politics Expert and community input OMB oversight, OSTP input Also big (fiscal) picture

  8. The Federal Budget Cycle • Agencies negotiate with OMB (“passbacks”) • Budget proposals are finalized in January • President presents the proposed budget to Congress early February

  9. The Federal Budget Cycle • Congress holds budget hearings… • IN THEORY - Approves budget resolution (simple majority) • 302(b) allocations to the 12 appropriations subcommittees

  10. The Federal Budget Cycle • Approps committees write/approve 12 appropriations bills • Bills have to pass both chambers (can be filibustered); Differences are conferenced • Continuing resolutions? Omnibus? Reconciliation? Supplemental appropriations?

  11. Authorizations vs. Appropriations • Authorization • Creates and modifies programs. • Includes funding ceilings BUT NOT actual funding. • Under the jurisdiction of the topical legislative committees. • i.e. America COMPETES and ARPA-E • Appropriations • Permits funding (specifically, incur obligations) • Under the jurisdiction of the Appropriations Committees (each with 12 subcommittees – one for each spending bill) • Defense, Energy + Water, Interior, Labor/HHS/Eduction, Agriculture, etc…

  12. What Drives Congressional Budget Decisions? • Incrementalism • Local politics • Effectiveness, balance, duplication • Role of government • Workforce • Topical vs. substantial • The Big Fiscal Context • “Annual Miracle”

  13. The Federal Budget Cycle • Agencies are working on 3 budgets at any given time. Right now: • Spending FY 13 • Congress dealing with FY14 • Agencies starting to kick off planning for FY15

  14. The Budget Control Act / Sequestration • Established Discretionary Spending Caps • Established automatic budget enforcement procedures (sequestration) • $1.2 trillion cuts through 2021 • ~8% cuts to R&D over the next five years

  15. Current State of Play • President’s FY14 budget now out • The BIG issues remain: deficits, taxes v. spending, growth in entitlements, tax burden • Sequestration remains in place for now…. • Research community reeling • …also debt ceiling

  16. For more info… mhouriha@aaas.org 202-326-6607 www.aaas.org/spp/rd/

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