The Budget Blues -- Outlook on Future Civilian R&D Funding (I)

The outlook for federal civilian R&D spending between FY 1995 and FY 2002 is sobering. The American Association for the Advancement of Science calculates that under a contingent administration budget plan, nondefense R&D spending in FY 2002 (after allowing for inflation) could be 19.1% less than in FY 1995. Under a budget resolution approved by Congress in July, total nondefense R&D spending might decline even further, dropping 23.0%.

These and other projections were the subject of a hearing of the House Science Committee in late July. Testifying were Al Teich of AAAS, Congressional Budget Office Deputy Director James Blum, Senator Christopher Bond (R-MO), and the heads of NSF, NASA, and the DOE Office of Energy Research.

CBO’s Blum used exacting language in describing the outlook for R&D, saying only that TOTAL discretionary spending could, under various budget scenarios, decline between 7% and 18% from FY 1996 to FY 2002 (after allowing for inflation.) He concluded his written testimony with an important statement: “How the [above] reductions in real discretionary spending would be allocated to individual programs [such as R&D] cannot be known for 1998, let alone for 2001 and 2002. The spending levels for individual discretionary spending programs will be decided each year by the appropriation process, and the current relative spending priorities of both the President and the Congress for discretionary programs will not necessarily be tomorrow’s priorities.” In other words, while over-all funding will decline, it is not possible to predict specific R&D (or any other, for that matter) budgets.

The Office of Management and Budget, which prepared the Administration’s projections, declined to testify at this hearing. Both House Science Committee Chairman Bob Walker (R-PA) and Ranking Member George Brown (D-CA) were unhappy with OMB’s stance. Brown, displeased with both budget plans, suggested that consideration be given to issuing a subpoena to force OMB to testify.

AAAS’s Teich told the committee that “we can do that kind of guesswork that CBO cannot do,” testifying that, “In the absence of other information, AAAS extrapolated outyear [future] funding levels for R&D by calculating how much of each account in the current budget represents R&D and then applying that percentage to proposed funding levels for each account in future years.” These AAAS projections, cited above, entail estimates of future inflation and economic activity.

Teich concluded his written testimony saying: “The point is that, while I would not place bets on the precise numbers, if Congress and the President continue to pursue a balanced budget primarily through cuts in discretionary spending, especially nondefense discretionary, then further cuts to federal support of R&D are inevitable.” To which he added, “that growing pie is now shrinking.” FYI #131 will provide additional information on several R&D budget outlooks.