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Budget Rethink

Financial woes raise questions about federal R&D funding

by Andrea Widener
May 14, 2012 | A version of this story appeared in Volume 90, Issue 20

President Obama’s proposed 2013 budget is good for R&D, but looming across-the-board mandated budget cuts, called sequestration, could be catastrophic. NOTE: Estimates based on Office of Management & Budget data, budget justifications, and the Budget Control Act. a Excludes NIH. b Only basic and applied research and advanced technology development (categories 6.1 to 6.3). SOURCE: AAAS
Bar graph shows across-the-board sequestration as a percent change between the proposed 2013 budget and the 2012 R&D budget.
President Obama’s proposed 2013 budget is good for R&D, but looming across-the-board mandated budget cuts, called sequestration, could be catastrophic. NOTE: Estimates based on Office of Management & Budget data, budget justifications, and the Budget Control Act. a Excludes NIH. b Only basic and applied research and advanced technology development (categories 6.1 to 6.3). SOURCE: AAAS

President Barack Obama’s proposed fiscal 2013 budget calls for small increases for science. That’s good news considering the tight fiscal constraints facing the U.S., but it won’t stop federal R&D funding as a percentage of the total federal budget from falling to its lowest level in 50 years.

The political gridlock and immense federal deficits that have plagued the budget process in recent years are only likely to make things worse, according to a sober series of talks at the American Association for the Advancement of Science (AAAS) annual Forum on Science & Technology Policy. The forum was held in Washington, D.C., on April 26–27.

“Perhaps it is a case of entitlements and other mandatory spending crowding out other investments. But either way it is a trend going in the wrong direction,” explained Matthew Hourihan, director of AAAS’s R&D Budget & Policy Program. Of the overall federal budget, nearly two-thirds funds mandatory programs, including Medicare, Medicaid, and Social Security. The remaining portion—called discretionary funding—supports nearly all federal R&D agencies and programs and gets squeezed when Congress makes cuts.

Hourihan and other speakers at the AAAS policy forum discussed many reasons for the decline in discretionary funding, from political posturing to a broken budget process to the worldwide financial crisis. Some also noted that federal agencies, universities, and individual investigators are, in their own ways, figuring out how to cope with tight budgets.

However, the budget situation is likely to deteriorate further. More than $1 trillion in mandatory budget cuts are scheduled to take effect in January 2013. The cuts, called sequestration, came out of the Budget Control Act of 2011, which mandated automatic budget reductions if a bipartisan congressional panel did not cut $1.2 trillion from the federal budget. The panel failed to do so last November, triggering the cuts (C&EN, Nov. 28, 2011, page 28).

The President and both houses of Congress have suggested they want to avoid sequestration through additional legislation, Hourihan said, “but as of right now [the cuts] are on the books and will go forward.”

“Many folks in the Administration and others have referred to these cuts as catastrophic, and I think that’s pretty fair,” Hourihan said. However, most agencies are not yet planning for this drastic downturn, hoping for a compromise after November’s presidential election, he explained.

Sequestration aside, the R&D budget is not where the Administration would like it to be, said John P. Holdren, director of the White House Office of Science & Technology Policy. “Although science and technology research and development have done better than one would expect in a time of such great overall constraint, they haven’t done nearly as well as we think they have needed to,” he explained. “So we have had to make some extremely difficult choices.”

Among those choices, the Administration has slowed planned growth of the National Science Foundation, the Department of Energy Office of Science, and the laboratories at National Institute of Standards & Technology. The three agencies were on a decade-long budget-doubling track that began in 2006. The Administration also opted to hold funding flat for the National Institutes of Health and ended a number of programs at the National Aeronautics & Space Administration. “The NASA budget has constantly been the challenge of trying to fit 20 lb of programs into a 10-lb budget,” Holdren said. “It has been that way for a long time.”

Those tough choices are likely to continue as Congress hashes through the 2013 budget. The House of Representatives has agreed to build a budget $19 billion smaller than that in the Senate. This difference means that finding compromises will be a difficult challenge for Congress.

Although the 2013 congressional appropriations process is in the early stages, science hasn’t fared badly in the bills that are currently working their way through Congress. For the most part, the appropriators are near the President’s R&D request. But because of the $19 billion mismatch between the House and the Senate, it is unlikely a full budget will be enacted by the start of fiscal 2013 on Oct. 1. Instead, the budget will probably be handled through a series of continuing resolutions—measures that keep the government running until a full budget is signed into law.

The constant budget uncertainty makes management of funding hard for science agencies, which award and manage long-term projects and multiyear grants. A lot of these ups and downs could be avoided if the U.S. changes what a panel of budget experts at the AAAS forum called a “broken budget and a broken budget process.”

Until then, federal agencies and research institutions are trying to figure out ways to deal with both tight budgets and constant uncertainty.

Sally J. Rockey, deputy director for extramural research at NIH, told forum attendees the agency is exploring ways to redistribute grant funding to raise the number of people who can get grants. The funding rate is currently one in seven, the lowest in NIH history.

Among strategies NIH is examining are restricting the size of grants, limiting the number or total amount any one investigator can get, and capping the salary of investigators. Although these approaches would generate some savings, none would generate enough to raise the funding rate significantly.

Rockey noted that NIH hasn’t started planning for the catastrophic cuts that would come with sequestration. “We all want to just close our ears,” she said.

The tight federal budgets are also impacting research universities. Kelvin K. Droegemeier, vice president for research at the University of Oklahoma, said that he is encouraging his faculty to look beyond their traditional federal funders for grants. The university is providing support to help faculty apply for grants from agencies they have not applied to before, specifically the Department of Defense and security and intelligence agencies.

The question for Droegemeier now is the following: “From an institutional perspective, how can we make our faculty more competitive?”

Overall, though, the problem might be that expectations are too high, according to David J. Rothkopf, chief executive officer and editor-at-large of Foreign Policy. The days when the U.S. and other developed countries can afford big science programs might be over, he said.

“We do not have the money,” Rothkopf said. “If you build things that save people money, they are going to do great ... that is where the action is going to be.”


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