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The Federal R&D Budget: Process and Perspectives

The Federal R&D Budget: Process and Perspectives. Matt Hourihan June 5, 2014 For the Washington Internships for Students of Engineering Program AAAS R&D Budget and Policy Program http://www.aaas.org/spp/rd. The Federal Budget is Kind Of a Big Deal.

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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 June 5, 2014 For the Washington Internships for Students of Engineering Program AAAS R&D Budget and Policy Programhttp://www.aaas.org/spp/rd

  2. The Federal Budget is Kind Of a Big Deal • “Politics is who gets what, when, and how.” - Harold Lasswell • “Budgeting is about values, and it’s about choices.” – Rep. Rosa DeLauro • Put another way: budgeting is a manifestation of politics • The Budget is also a roadmap • Major impact for R&D and innovation: most basic research, and most university research, is federally funded

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

  4. A Typical Federal Budget Process:Three Years, Four Phases Phase 4: Execute the fiscal year’s budget (not shown) Arranged by fiscal year (October to September)

  5. The Federal Budget Cycle • Phase 1: Internal agency discussions and planning • Strategic plans, staff retreats, stakeholder meetings, program assessments • OMB is present throughout • Early spring: guidance memo • Science & Tech: Joint guidance memo from OMB / OSTP (midsummer) • Agencies deliver budget justifications to OMB (early fall)

  6. What Drives Presidential R&D Budget Formulation? Top-down and bottom-up priorities and politics OMB oversight and OSTP input Expert and community input Congressional legislation Big (fiscal) picture Incrementalism

  7. Science + Politics Mingle: One Example • Human Genome Project • Community takes first interest in mapping/sequencing • DOE labs take early gov’t interest and lead • Radiation and computing power • DOE labs officials convince dept. managers and advisory groups, OMB, Appropriators • NIH sets up its own program • Interagency rivalry evolves to collaboration • Congress eventually creates NHGRI

  8. The Federal Budget Cycle • Phase 2: OMB performs multi-stage review, responds to agencies (“passbacks”) • Agencies and agency heads can and do negotiate • Budget proposals are finalized in January • President presents the proposed budget to Congress early February

  9. Administration R&D Priorities • Department of Energy: NNSA, renewables and efficiency, ARPA-E • Neuroscience • NASA: industry partnerships • Transportation: highways and high-performance rail • Extramural ag research • Advanced Manufacturing • Environmental research? • COMPETES Agencies: $11 billion for R&D (+1% from FY14) • Treading water • Research budget hit? • (not really)

  10. The Federal Budget Cycle • Phase 3: Congress gets involved • Receives and reacts to President’s budget, holds hearings • IN THEORY: Approves budget resolution (simple majority) • 302(b) allocations to the 12 appropriations subcommittees

  11. The Budget Resolution Overall spending framework Discretionary spending figure is divvied up by appropriations committees Budget resolution is a politicaldocument (which is why they can’t seem to pass one?)

  12. The Federal Budget Cycle • Approps committees write/approve 12 appropriations bills • Bills have to pass both chambers • Differences are resolved in conference committee • Can be filibustered • “President proposes, Congress disposes”

  13. What Drives Congressional Budget Decisions? • “All politics is local” • Concerns over balance, duplication, competitiveness, role of government • Expert and community input • Incrementalism? • The Big Fiscal Context • “Annual Miracle”

  14. More examples… • Dept of Agriculture research grants • USDA research regular source for earmarks • Outside calls for increased competitive grants (versus formula funds) over 30+ years • Competitive programs phased in slowly • Health Research and Congress • DOD health program: breast cancer advocacy • NIH doubling was a Congress-led initiative

  15. Authorizations vs. Appropriations • Authorization • Creates and modifies programs • Sets funding ceilings • Under the jurisdiction of the topical legislative committees • Appropriations • Permits funding (power to incur obligations) • Under jurisdiction of Approps Committees • Can be multiyear or advance appropriations (i.e. Veterans) • >$250 million in unauthorized appropriations in 2012 (per CBO)

  16. The Federal Budget Cycle • Gov’t is working on 3 budgets at any given time. Right now: • Spending FY14 • FY15 released, Congress getting involved • Agencies / OMB already thinking about FY16

  17. Looking ahead… • Discretionary spending in FY 2015 has already been agreed • 25% of sequester reductions rolled back • Beyond FY 2015: back to sequester levels • Appropriations moving forward • Big-picture fiscal challenges remain largely unchanged • Can R&D stay ahead of the curve?

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

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