FYI Number 25: March 6, 2001

The FY 2002 Bush Administration Budget Blueprint: In Context

The budget blueprint that President Bush released last week provides insight into the new Administration's approach to budgeting for a wide range of programs. The following selections present additional information of interest. A forthcoming FYI will contain reactions to the S&T budget request.

MODERATING GROWTH IN SPENDING:

"For the past three years...appropriated spending has grown by an average of six percent." "If growth continued at a six percent pace going forward, an additional $1.4 trillion of the surplus would be consumed over 10 years - approximately the amount of the President's tax cut." History has shown that - unlike tax cuts - spending increases, once made, are rarely reversed. This pattern cannot long continue without jeopardizing our Nation's long-term goals. Discretionary spending growth should be held to the inflation rate. This will mean redeploying resources away from programs that have achieved their goals or failed. It will also mean exercising restraint both in the Administration and in Congress."

EARMARKING:

"In addition to higher spending, budget surpluses have led to a dramatic increase in congressional earmarks. The result is that the Government is not only producing more spending, but more unjustified spending. During this past year, the explosion in spending was accompanied by an unprecedented 6,000 plus earmarks in appropriations bills."

R&E TAX CREDIT:

"The President's tax plan also supports a permanent extension of the Research and Experimentation (R&E) Credit. This credit supports the type of technological developments that have fueled the recent boom in productivity growth. By making the credit permanent, the President will give firms the incentive to undertake long-term research projects that could well provide the next round of technological breakthroughs for future generations."

NATIONAL INSTITUTES OF HEALTH:

"The President recognizes the importance of health care to America's families. The 2002 Budget includes targeted investments in key Presidential priority areas such as improving biomedical research...." "During the campaign, then-Governor Bush pledged to complete the effort to double NIH's budget in five years, a goal that is supported in Congress by a bipartisan coalition." "NIH is working to meet the management challenges that can arise when an agency receives a substantial infusion of resources over a short period of time. NIH is in the process of identifying strategies and policies that could be implemented in 2002 and 2003 and beyond to maximize budgetary and management flexibility in the future." "Once the doubling effort is complete, NIH will receive stable, moderate funding increases to continue to support investments in biomedical research that improves the health of all Americans."

DEPARTMENT OF DEFENSE:

"First, the President believes that the Nation's defense strategy should drive decisions on defense resources, not the other way around. For this reason, the Secretary of Defense will conduct a strategy review to create a vision for the role of the Nation's military in the 21st Century. This review will examine the appropriate national security strategy, force structure, and budget priorities. It will guide future decisions on military spending. To speculate now on the results of this strategy review could compromise the outcome. Consequently, the Administration will determine final 2002 and outyear funding levels only when the review is complete. Second, the President believes America must rethink the requirements of deterrence in our current security environment. The President proposes to maintain the lowest number of nuclear weapons consistent with our present and future national security needs. The review will also identify the Nation's missile defense needs."

NASA:

"Critical Capabilities: U.S. academia and industry provide a rich R&D resource that NASA can tap to strengthen its mission capabilities. NASA will develop an integrated, long-term agency plan that ensures a national capability to support NASA's mission by: identifying NASA's critical capabilities and, through the use of external reviews, determining which capabilities must be retained by NASA and which can be discontinued or led outside the agency; expanding collaboration with industry, universities, and other agencies, and outsourcing appropriate activities to fully leverage outside expertise; and pursuing civil service reforms for capabilities that NASA must retain, to ensure recruitment and retention of top science, engineering, and management talent at NASA."

K-12 MATH AND SCIENCE EDUCATION:

"Although U.S. fourth graders did relatively well in both math and science, by twelfth grade, the last year of mandatory schooling, U.S. students were among the very worst in the world, and in some areas, such as physics, were last. This evidence indicates that our schools are not preparing our students adequately for today's knowledge-based, technologically rich society or to become future scientists and engineers. Among the underlying causes for the poor performance of U.S. students in the areas of math and science, three problems must be addressed: too many teachers teaching these subjects for which they have not been trained; too few students taking advanced coursework; and too few schools offering challenging curriculum and textbooks."

FUTURE GROWTH IN FEDERAL SPENDING:

"To ensure that the Federal Government continues to pay down the debt, the President proposes limits that would allow discretionary spending to grow with inflation over the next five years."

GROWTH-ENHANCING POLICIES:

"The advances made over the last two decades provide a solid foundation for further growth going forward, assuming the Nation continues to pursue growth- enhancing policies."

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