Numbers Crunch: AAAS Calculations Project Cuts in R&D Spending

An analysis by the American Association for the Advancement of Science finds that the Clinton Administration’s plan to balance the federal budget by 2002 entails significant reductions in future federal R&D spending. Following a requested increase in FY 1997 R&D spending, funding would decline in the following three years.

Making projections a year ahead is uncertain; making them through the year 2002 is even more difficult. Yet, with Congress and the Administration responding to the public’s clamor for a reduction in the federal deficit and a balanced budget, the numbers given in this year’s budget submission about future spending patterns cannot be ignored.

Much of this discussion revolves around what Washington calls “outyears,” and what everyone else would more simply call the future. A 1974 law requires the president and Congress to prepare projections of future, or outyear, spending.

Balancing the budget by the year 2002 requires projections about federal spending, taxation and the assumptions about the nation’s economy. If the nation’s economy is strong, tax revenue will increase, and government spending on unemployment benefits and other programs will decline. Add to this estimates about inflation. It all becomes very tricky.

AAAS looked at the administration’s figures in the budget submission to Congress, and then adjusted them for expected inflation. AAAS calculates that total nondefense R&D expenditures would change as follows:

FY 1996 to FY 1997: Up 3.3% after inflation
FY 1997 to FY 1998: Down 5.2% after inflation
FY 1998 to FY 1999: Down 5.7% after inflation
FY 1999 to FY 2000: Down 4.9% after inflation

AAAS found that “In FY 2000, total nondefense R&D would be 17.9% below the original FY 1995 level after inflation.”

Administration estimates about subsequent R&D spending are less clear. If everything goes as hoped, spending could increase in FY 2001 and FY 2002. The projected cumulative reduction over 7 years in nondefense R&D funding under this scenario would be 11.7%. If conditions are not favorable, additional cuts would have to be made to achieve a balanced budget by FY 2002.

Projected R&D reductions are not uniform. AAAS calculates total Department of Energy nondefense R&D would decline 18.3% between FY 1995 and 2002 (all figures in constant dollars.) DOE’s “General Science (Physics)” would decline 13.8%, from $974 million in FY 1995 to $751 million in FY 2000. General Science spending would then increase to $977 million in FY 2002 “if the economy performs according to OMB projections.”

Total NASA R&D spending would decline 16.9% between FY 1995 and FY 2002. Science, Aeronautics and Technology R&D (Space) would decline 12.5% in the same period, dropping from $5,072 million in FY 1995 to $4,394 million in FY 2000, before rebounding to $5,163 million in FY 2002 if the economy behaves.

The National Science Foundation projections are a mixed bag. Total NSF R&D would decline by 10.8% between FY 1995 and FY 2002. The projection for Research and Related Activities spending is more positive, increasing by 1.7% in the same period (with no year-to-year declines.) “R&D in Education and Human Resources” would decline 19.4% between FY 1995 and 2002.

NIST Scientific and Technical Research Service spending would decline a projected 7.5% during the FY 1995 - 2002 period. The Advanced Technology Program budget would decline 23.2%.

This is not favorable news, and the Clinton Administration urges that the science community not get too excited about these projections. OSTP Director John Gibbons addressed an AAAS R&D colloquium the day this analysis was released, and he spent quite a few minutes discussing these calculations. Among his remarks: “What I’m wary of in this forum today, though, is the temptation to be drawn into discussion of theoretical events in a distant future -- and anyone who’s ever worked on the Federal budget-setting exercise knows that the year 2002 might as well be a century away for all our ability to accurately predict the details of federal spending that far out.... Friends, I’m honestly much more worried about what we’ll be able to do in FY 97 than I am about FY 2002.... I don’t know what 2002 will bring -- neither does the Congress, neither does AAAS. I’ll be happy to have the debate over the out years when we know more about them.”

Last year, AAAS used the same methodology to project a much-discussed 33% cut in federal nondefense R&D contained in the Congressional Budget Resolution. AAAS states that the two studies are “not directly comparable.” Inflation estimates have become more favorable since then, the AAAS stating, “If the congressional analysis were to be recalculated using this year’s deflators, the outlook for nondefense R&D would be more favorable than reported last July.” In addition, the actual outcome of FY 1996 R&D appropriations was different from that first suggested by the budget resolution.

AAAS readily acknowledges that outyear projections “have always been unreliable.” Nevertheless, a senior OSTP official wondered aloud at a recent PCAST meeting about new starts of large, expensive facilities when the future seems uncertain. Top administration R&D officials indicated at this meeting that they are readying themselves for “substantial reductions” between now and FY 2000.

The AAAS analysis is available on the AAS R&D Budget and Policy Project World Wide Web page at http://www.aaas.org/spp/dspp/rd/rdwwwpg.htm