[Analytical Perspectives]
[Special Analyses and Presentations]
[7. Research and Development Expenditures]
[From the U.S. Government Publishing Office, www.gpo.gov]





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                   7. RESEARCH AND DEVELOPMENT FUNDING

  Investments in scientific discovery and technological development--
both public and private--have driven economic growth and improvements in 
the quality of life in America for long as our Nation has existed. In 
the last 50 years, developments in science and technology have generated 
at least half of the Nation's productivity growth, creating millions of 
high-skill, high-wage jobs and leading to advances in the economy, 
national security, the environment, transportation and medical care. 
Federal government support for science and technology has helped put 
Americans on the moon, boosted agricultural productivity, harnessed the 
atom, devised more effective treatments for cancers, tracked weather 
patterns and earthquake faults, and deciphered the chemistry of life.
  Because technological advances are key to progress and economic 
growth, in 1993 President Clinton took office committed to expanding 
Federal investment in civilian research and development. The President's 
economic strategy relied upon the critical element of investing in 
people and proposed targeted investments to help the Nation compete in 
the global economy and improve our quality of life.
  The Administration's support for R&D has been essential to the flow of 
innovative ideas, which have resulted in everything from the discovery 
of the first multi-planet system beyond our own to unraveling human, 
plant and microbial genomes, a critical step in understanding the 
function of genes, and, in turn, potentially treating and curing 
diseases that are now beyond the reach of medical science. Investments 
in science and technology can bring us breakthroughs in the areas of the 
environment, health, national security, and more, including, for 
example: fuel economies that are double those of today; a strong defense 
that continually hones its technological edge; and fundamental research 
that may be able to unlock the answers to some of the most basic 
questions: why cells age and die, how human beings learn and remember 
information, and whether there is life on other planets.
  Over the last several years, private industry has expanded its support 
for research and development, but most of these efforts focus on 
bringing new products to market rather than funding the basic research 
that can lead to break-through applications in a wide range of fields. 
By supporting fundamental research that can provide the foundation for 
tomorrow's technologies, the Federal Government can act as a catalyst 
for these breakthroughs. Federal investment in basic research increased 
by nearly 45 percent from 1993 to 2000, with emphasis on health 
research. The budget proposes $20.3 billion to advance a balanced 
portfolio in basic research, an increase of $1.3 billion, or 7 percent, 
over 2000.
  Basic university-based research plays a special role in the 
development of scientific advances. The competitive grants process upon 
which university research relies fosters innovation and expands 
scientific frontiers. At the same time, these research grants provide a 
training ground for the next generation of scientists and engineers. 
Funding support for universities has grown to roughly $17.8 billion, a 
53 percent increase, since 1993. Funding the academic researcher through 
a peer-reviewed, merit-based competitive process is the Federal 
government's strategy for pursuing the most promising long-term 
research. Researchers at national laboratories, in the private sector, 
and at non-profit companies may also be funded through such a 
competition. In 2001, $28.2 billion in research funds will be awarded 
through a peer-reviewed, merit-based competitive process.
  Other processes for allocating research dollars are appropriate in 
special cases. For example, agencies may decide that they wish to 
spearhead research in a particularly risky, but highly promising, field 
that can further the agency's mission. Agency program managers with in-
depth knowledge and expertise are likely to have the best judgement for 
making such decisions. One example of this approach is the National 
Science Foundation, where program managers may award up to 5 percent of 
their funds through ``Small Grants for Exploratory Research,'' which are 
made at the program manager's discretion, without peer review. In other 
agencies, there are well-known centers of excellence at the national 
laboratories, where there are unique capabilities. An agency may 
determine that maintaining and exploiting this excellence requires long-
term financial stability for expensive world-class machines that will 
ultimately benefit many researchers.
  In the appropriations process, Congress may require awards to be made 
to a single performer or collection of performers without competitive 
selection. This Congressional direction may be established in law, 
report language, or by other means. As a result of a recommendation in 
the National Science and Technology Council's report on the Government-
University Partnership, agencies have reported the amount of funding 
that was awarded through such Congressional direction. The 
Administration is in the process of developing consistent measures 
across Federal agencies for these latter two categories of research, in 
order to publish the data in the 2002 budget.

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  The tables below provide data on Federal spending for research and 
development. Table 7-1 shows agency-by-agency spending on basic and 
applied research, development, and equipment and facilities. Table 7-2 
shows agency-by-agency spending for two initiatives of the National 
Science and Technology Council, which are required by statute.

                                     

                                                  Table 7-1.  FEDERAL RESEARCH AND DEVELOPMENT SPENDING
                                                     (Budget authority, dollar amounts in millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                         Dollar  Percent
                                                                                                             1999     2000      2001    Change:  Change:
                                                                                                            Actual  Estimate  Proposed  2000 to  2000 to
                                                                                                                                          2001     2001
--------------------------------------------------------------------------------------------------------------------------------------------------------
By Agency
  Defense................................................................................................   38,850    38,719    38,640      -79       0%
  Health and Human Services..............................................................................   15,797    18,063    18,998      935       5%
  National Aeronautics and Space Administration..........................................................    9,715     9,753    10,035      282       3%
  Energy.................................................................................................    6,992     7,091     7,655      564       8%
  National Science Foundation............................................................................    2,702     2,903     3,464      561      19%
  Agriculture............................................................................................    1,645     1,773     1,828       55       3%
  Commerce...............................................................................................    1,084     1,073     1,152       79       7%
  Interior...............................................................................................      786       585       731      146      25%
  Transportation.........................................................................................      670       648       679       31       5%
  Veterans Affairs.......................................................................................      644       655       655        0       0%
  Environmental Protection Agency........................................................................      500       584       590        6       1%
  Education..............................................................................................      205       233       271       38      16%
  Other..................................................................................................      752       664       635      -26      -4%
                                                                                                          ----------------------------------------------
    TOTAL................................................................................................   80,342    82,744    85,333    2,589       3%

Basic Research
  Defense................................................................................................    1,082     1,175     1,230       55       5%
  Health and Human Services..............................................................................    8,642     9,857    10,422      565       6%
  National Aeronautics and Space Administration..........................................................    1,981     1,947     1,895      -52      -3%
  Energy.................................................................................................    2,228     2,242     2,379      137       6%
  National Science Foundation............................................................................    2,330     2,512     3,000      488      19%
  Agriculture............................................................................................      634       692       740       48       7%
  Commerce...............................................................................................       39        39        52       13      33%
  Transportation.........................................................................................       42        46        69       23      50%
  Environmental Protection Agency........................................................................       57        58        76       18      31%
  Veterans Affairs.......................................................................................      263       268       268        0       0%
  Interior...............................................................................................       50        61        63        2       3%
  Education..............................................................................................        2         2         2        0       0%
  Other..................................................................................................      118       128       132        4       3%
                                                                                                          ----------------------------------------------
    SUBTOTAL.............................................................................................   17,468    19,027    20,328    1,301       7%

Applied Research
  Defense................................................................................................    3,064     3,383     3,087     -296      -9%
  Health and Human Services..............................................................................    4,998     5,728     5,935      207       4%
  National Aeronautics and Space Administration..........................................................    2,306     2,365     2,817      452      19%
  Energy.................................................................................................    1,810     1,913     2,174      261      14%
  National Science Foundation............................................................................      147       164       193       29      18%
  Agriculture............................................................................................      743       807       821       14       2%
  Commerce...............................................................................................      799       770       834       64       8%
  Transportation.........................................................................................      368       384       477       93      24%
  Environmental Protection Agency........................................................................      401       387       377      -10      -3%
  Veterans Affairs.......................................................................................      365       370       370        0       0%
  Interior...............................................................................................      418       482       486        4       1%
  Education..............................................................................................      141       150       165       15      10%
  Other..................................................................................................      355       290       290        0       0%
                                                                                                          ----------------------------------------------
  SUBTOTAL...............................................................................................   15,915    17,193    18,026      833       5%

Development
  Defense................................................................................................   34,423    33,913    33,937       24       0%
  Health and Human Services..............................................................................    1,919     2,229     2,408      179       8%
  National Aeronautics and Space Administration..........................................................    5,092     5,093     4,920     -173      -3%
  Energy.................................................................................................    2,003     2,036     2,163      127       6%
  National Science Foundation............................................................................        0         0         0        0       NA
  Agriculture............................................................................................      109       109       118        9       8%
  Commerce...............................................................................................      137       106       176       70      66%
  Transportation.........................................................................................      161       145       171       26      18%
  Environmental Protection Agency........................................................................       96        93        84       -9     -10%

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  Veterans Affairs.......................................................................................       16        17        17        0       0%
  Interior...............................................................................................       25        24        34       10      42%
  Education..............................................................................................       62        81       104       23      28%
  Other..................................................................................................      259       225       189      -36     -16%
                                                                                                          ----------------------------------------------
    SUBTOTAL.............................................................................................   44,302    44,071    44,321      250       1%

Facilities and Equipment
  Defense................................................................................................      281       248       386      138      56%
  Health and Human Services..............................................................................      238       249       233      -16      -6%
  National Aeronautics and Space Administration..........................................................      336       348       403       55      16%
  Energy.................................................................................................      951       900       939       39       4%
  National Science Foundation............................................................................      225       227       271       44      19%
  Agriculture............................................................................................      159       165       149      -16     -10%
  Commerce...............................................................................................      109       158        90      -68     -43%
  Transportation.........................................................................................      215        10        14        4      40%
  Environmental Protection Agency........................................................................      116       110       142       32      29%
  Veterans Affairs.......................................................................................        0         0         0        0       NA
  Interior...............................................................................................        7        17         7      -10     -59%
  Education..............................................................................................        0         0         0        0       NA
  Other..................................................................................................       20        21        24        3      14%
                                                                                                          ----------------------------------------------
    SUBTOTAL.............................................................................................    2,657     2,453     2,658      205       8%
--------------------------------------------------------------------------------------------------------------------------------------------------------
NA = Not applicable.

                                     

                                                     Table 7-2.  AGENCY DETAIL OF MAJOR INITIATIVES
                                                     (Budget authority, dollar amounts in millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                         Dollar  Percent
                                                                                                             1999     2000      2001    Change:  Change:
                                                                                                            Actual  Estimate  Proposed  2000 to  2000 to
                                                                                                                                          2001     2001
--------------------------------------------------------------------------------------------------------------------------------------------------------
Information Technology R&D*
  National Science Foundation............................................................................      393       517       740      223      43%
  Energy (Defense--Advanced Strategic Computing Initiative)..............................................      301       397       477       80      20%
  Energy (Civilian programs).............................................................................      139       120       190       70      57%
  Defense................................................................................................      215       282       397      115      41%
  Health and Human Services..............................................................................      118       191       233       42      22%
  National Aeronautics and Space Administration..........................................................      106       174       230       56      32%
  Commerce...............................................................................................       25        36        44        8      22%
  Environmental Protection Agency........................................................................        4         4         4        0       0%
                                                                                                          ----------------------------------------------
    TOTAL................................................................................................    1,301     1,721     2,315      594      35%

U.S. Global Change Research Program
  National Aeronautics and Space Administration..........................................................    1,155     1,173     1,149      -24      -2%
  National Science Foundation............................................................................      182       187       187        0       0%
  Energy.................................................................................................      114       120       123        3       2%
  Commerce...............................................................................................       63        67        93       26      39%
  Agriculture............................................................................................       52        53        85       32      60%
  Health and Human Services..............................................................................       40        46        48        2       4%
  Interior...............................................................................................       27        27        25       -2      -7%
  Environmental Protection Agency........................................................................       17        21        23        2      10%
  Smithsonian Institution................................................................................        7         7         7        0       0%
                                                                                                          ----------------------------------------------
    TOTAL................................................................................................    1,657     1,701     1,740       39       2%
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Merges both the High Performance Computing and Communications program and the Information Technology Initiative (IT2).

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