[Analytical Perspectives]
[Crosscutting Programs]
[5. Research and Development]
[From the U.S. Government Printing Office, www.gpo.gov]


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                       5. RESEARCH AND DEVELOPMENT

                            I.  INTRODUCTION

  The eminent 19th Century American scientist Joseph Henry once 
asserted, ``Modern civilization depends on science.'' This still holds 
true. Indeed, investments in science and technology have resulted in 
much of the unparalleled economic growth in the United States over the 
last 50 years, as well as the standard of living and quality of life we 
now enjoy. Advances have been possible only with the support of both 
public and private investment in research and development (R&D).
  And we continue to invest. The R&D investments of the United States 
are unmatched. However, unlike 40 years ago, when Federal R&D 
expenditures doubled those of the private sector, industry R&D spending 
now exceeds that of the Federal Government. Still, by a wide margin, the 
U.S. Government continues to lead the world in R&D spending.
  Investments in technological advancement are vital to strengthening 
our capabilities to combat terrorism and defend our country. The 
President's 2005 Budget continues to focus R&D on winning the war 
against terrorism, while moderating the growth in overall spending. But 
the benefits of innovation and discovery are not limited to national 
security. They are just as critical to economic security. The 
Administration, recognizing that fundamental research is the fuel for 
future innovation and technology development, has maintained the highest 
levels of support for priority R&D areas such as nanotechnology, 
information technology, hydrogen energy, and space exploration. The non-
defense R&D share of the discretionary budget is at a near-record high 
over the last 30 years.

                                     


  Author Aubrey Eben noted, ``Science is not a sacred cow. Science is a 
horse. Don't worship it. Feed it.'' To this we would add: the horse also 
needs to be kept in good shape. The focus should not be solely on 
spending but, just as importantly, on performance. The Administration 
will continue to meet the President's charge to improve the management, 
performance, and results of the Federal Government. By strengthening 
effective programs and addressing lower performers through reforms or 
reallocations to higher performers, we will increase the productivity of 
the Federal R&D portfolio and transcend the attention given to year-to-

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year marginal increases or decreases. Additionally, while it can be 
difficult to assess the outcomes of some research programs--many of 
which may not have a measurable effect for decades--agencies can 
establish meaningful program goals and measure annual progress and 
performance in appropriate ways. Towards that end, the Administration is 
continuing to implement and improve investment criteria for R&D programs 
across the government. Further, the government will coordinate 
interrelated and complementary R&D efforts among agencies, combining 
programs where appropriate to improve effectiveness and eliminate 
redundancy, to leverage these resources to the greatest effect.
  The Federal Government funds R&D in many ways. The government is a 
strong supporter of basic research, which is directed toward greater 
understanding of fundamental phenomena. Basic research is the source of 
tomorrow's discoveries and new capabilities, and this long-term research 
will fuel further gains in economic productivity, quality of life, and 
homeland and national security. The government also has a vital role in 
supporting applied research, which is driven by more specific needs, and 
development, which applies scientific knowledge and technology to 
specific needs. Together, the R&D portfolio is critical to the missions 
of Federal agencies, particularly in priority areas that private sources 
are not motivated to support. For example, if the private sector cannot 
profit from the development of a particular technology, Federal funding 
may be appropriate if the technology in question addresses a national 
priority or otherwise provides significant societal benefits. A good 
indicator of the relevance of Federal development funding is the level 
at which industry is willing to share the costs. Also, the Federal 
Government should help stimulate private investment and provide the 
proper incentives for private sources to continue to fuel the discovery 
and innovation of tomorrow. The Administration proposes to do this, for 
instance, by permanently extending the Research and Experimentation tax 
credit.
  This chapter discusses how the Administration will improve the 
performance of R&D programs through new investment principles and other 
means that encourage and reinforce quality research. The chapter also 
highlights the priority areas proposed for R&D agencies and the 
coordinated efforts among them. The chapter concludes with details of 
R&D funding across the Federal Government.

               II.  IMPROVING PERFORMANCE OF R&D PROGRAMS

  R&D is critically important for keeping our Nation economically 
competitive, and it will help solve the challenges we face in health, 
defense, energy, and the environment. As a result, and consistent with 
the Government Performance and Results Act, every Federal R&D dollar 
must be invested as effectively as possible.

                         R&D Investment Criteria

  The Administration is improving the effectiveness of the Federal 
Government's investments in R&D by continuing to apply transparent 
investment criteria in making recommendations for program funding and 
management. R&D performance assessment requires special consideration. 
Research often leads scientists and engineers down unpredictable 
pathways with unpredictable results. This poses a difficult problem for 
measuring an R&D program's performance against its initial goals. 
Adopting ideas first laid out by the National Academy of Sciences, the 
Administration is improving methods for setting priorities based on 
expected results, including applying specific criteria that programs or 
projects must meet to be started or continued, clear milestones for 
gauging progress, and improved metrics for assessing results.
  As directed by the President's Management Agenda, the R&D Investment 
Criteria were first applied in 2001 to selected applied R&D programs at 
the Department of Energy (DOE). Through the lessons learned from that 
DOE pilot, the criteria subsequently were broadened in scope to cover 
other types of R&D programs at DOE and other agencies. To accommodate 
the wide range of R&D activities from basic research to development and 
demonstration programs, a new framework was devised for the criteria to 
address three fundamental aspects of R&D:
    Relevance.--Programs must be able to articulate why they are 
          important, relevant, and appropriate for Federal investment;
    Quality.--Programs must justify how funds will be allocated 
          to ensure quality; and
    Performance.--Programs must be able to monitor and document 
          how well the investments are performing.
  In addition, R&D projects and programs relevant to industry are 
expected to meet criteria to determine the appropriateness of the public 
investment, enable comparisons of proposed and demonstrated benefits, 
and provide meaningful decision points for completing or transitioning 
the activity to the private sector.

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  Year Three in DOE Implementation of the Criteria. The Department of
 Energy continues to expand its use of the R&D criteria. For example, to
 ensure the relevance of the research it supports, DOE's basic research
 programs have incorporated the programs' long-term measures into
 requests for research proposals. The basic research programs have also
 expanded their use of Committees of Visitors, teams of independent
 experts that periodically assess the quality and performance of the
 research that the program has supported. Many of DOE's applied R&D
 programs have made similar improvements, and some have even
 incorporated the specific ``industry-related'' R&D criteria into
 evaluation forms used by peer reviewers to assess individual projects.
 While DOE's applied R&D programs still are faced with the challenge of
 generating comparable estimates of expected public benefits, they
 continue to work toward improving the consistency and quality of the
 data to better inform budget decisions.
 

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  The Administration has been studying R&D management strategies that 
some agencies use to operate particularly effective programs. The Office 
of Management and Budget (OMB) and the Office of Science and Technology 
Policy (OSTP) are continuing to assess the strengths and weaknesses of 
R&D programs across agencies, in order to identify and apply good R&D 
management practices throughout the government. For example, some 
agencies have a more deliberate project-prioritization process, while 
other agencies have more experience estimating the returns of R&D and 
assessing the impact of prior investments. Assessing and implementing 
new approaches is an iterative process, involving the research agencies 
and the science and technology community.
  As the investment criteria are implemented more broadly and more 
deeply, one lesson that is increasingly apparent is the importance of 
coordination and partnerships. First, partnerships are key in 
determining the proper Federal role. These include partnerships with 
industry (such as the Administration's FreedomCAR partnerships with U.S. 
automakers), partnerships with other countries (such as the 
Administration's International Partnership for a Hydrogen Economy), and 
partnerships with university researchers. Partnerships and coordination 
across agencies, through the National Science and Technology Council, 
for example, can also make the use of research resources more efficient 
and effective. More effective coordination and partnerships will be 
pursued in further implementation of the investment criteria.
------------------------------------------------------------------------

  Broader Application of the R&D Investment Criteria.  This was the
 second year of implementation of the investment criteria for most R&D
 agencies. The National Aeronautics and Space Administration is
 recasting its strategic plans and budget to tie directly to the R&D
 criteria. To reflect the criteria, the National Science Foundation
 changed the way it characterizes its budget, as well as the guidelines
 it uses to evaluate its research. Nearly all R&D agencies assessed some
 R&D programs using a tailored Program Assessment Rating Tool that was
 based on the R&D criteria. The R&D agencies have more work to do to
 integrate the R&D criteria more meaningfully into their management
 processes and budget decisions, and OMB will continue to improve
 guidance and standards for implementing the R&D Investment Criteria.
 

------------------------------------------------------------------------
  DOE has started to use the results of the R&D investment criteria to 
help analyze its portfolio of investments on the basis of the potential 
public benefits. This approach helps DOE to analyze, for example, 
whether the expected fruits of its investments are balanced across time, 
as well as the types of benefits they may yield. As data analysis of the 
Department's applied R&D programs has shown, there is a greater need for 
consistent methods of analysis, including ways to present benefits 
estimates that make comparisons meaningful. DOE is continuing to improve 
the consistency and quality of its data.
  As discussed throughout the 2005 Budget, OMB and the agencies have 
been working on other initiatives as part of the President's Management 
Agenda. To support the Budget and Performance Integration initiative, 
OMB developed a tool to assess the effectiveness of programs 
consistently: the Program Assessment Rating Tool (PART). Last year the 
effort included a version of the PART to specifically assess R&D 
programs, but PART assessments were done in isolation of the R&D 
Investment Criteria initiative. This year, the R&D PART was modified to 
align with the R&D criteria. In the process, the R&D PART became the 
instrument for assessing management and performance at the program 
level. In preparation of the 2005 Budget, OMB and the agencies completed 
or updated PART assessments of 58 R&D programs.
  Some programs rated ``effective'' were provided added funding to 
further the work they do. For example, the Budget requests $305 million 
for the National Science Foundation's Nanoscale Science and Engineering, 
an increase of 20 percent from the 2004 likely enacted level. Other 
examples include: DOE's Basic Energy Science

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Program, the National Aeronautics and Space Administration's Mars 
Exploration Program, and the Department of Commerce's laboratories at 
the National Institute of Standards and Technology. Other programs that 
were rated ``ineffective'' were cut, such as DOE's Oil Technology 
program. However, funding changes and management reforms are not made by 
formula or based solely on PART results. For example, funding may be 
reduced for ``effective'' programs that have achieved what they set out 
to, and ``ineffective'' programs might receive more money if it is clear 
it would help them become more effective. The PART provides information 
that permits informed decisions.

                                     


  OMB will continue to work with the R&D agencies and others to 
integrate the R&D criteria more meaningfully into the budget formulation 
process in the coming year, and to clarify expectations for using the 
R&D Investment Criteria across the agencies. Based on lessons learned 
and other feedback from experts and stakeholders, the Administration 
will continue to improve the R&D investment criteria and their 
implementation to achieve more effective management of R&D programs and 
better-informed budget-allocation decisions across the R&D agencies.

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                                    President's Management Agenda Initiative
 
 
 
Better Research and Development (R&D) Investment Criteria
 
FY 2004, Quarter 1 Status: RED, Progress: YELLOW
 
The initiative's red status score reflects the limited success many agencies have had in the government-wide
 implementation of the initiative. The yellow progress score indicates that the initiative retains momentum, as
 some agencies have made improvements this year, including the National Science Foundation, NASA, and DOE. More
 R&D agencies are using the criteria to assess their programs, due to the improved alignment of the R&D
 investment criteria with the R&D PART for program-level assessments. Twelve of the top 13 R&D agencies are
 using the R&D PART to assess their programs this year, up from seven last year. Most of the major R&D agencies
 submitted 2005 Budget requests that, to varying degrees, observe the principles of the investment criteria. To
 achieve a yellow status score, half of the R&D programs assessed for each agency must receive at least a
 ``moderately effective'' rating, which is proving to be a challenging requirement. Agencies must also integrate
 the R&D criteria framework into their budget proposals, including using detailed criteria-based assessments to
 justify specific requests or allocation changes.
 
 

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                            Research Earmarks

  The Administration supports awarding research funds based on merit 
review through a competitive process. Such a system ensures that the 
best research is supported. Research earmarks--in general the assignment 
of money during the legislative process for use only by a specific 
organization or project--are counter to a merit-based competitive 
selection process. The use of earmarks improperly signals to potential 
investigators that there is an alternative to creating quality research 
proposals for merit-based consideration, including the use of political 
influence or appeals to parochial interests.
  Moreover, the practice of earmarking funds directly to colleges and 
universities for specific research projects has expanded dramatically in 
recent years. Despite broad-based support for merit review, earmarks for 
specific projects at colleges and universities have yet again broken 
prior records. According to The Chronicle of Higher Education, academic 
earmarks have steadily increased from a level of $296 million in 1996 to 
over $2 billion in 2003. These funds now form a greater share of the 
total Federal funding to colleges and universities, and increasingly 
displace competitive research that is awarded by merit. For example, in 
2003, academic earmarks accounted for eight percent of all Federal 
funding to colleges and universities, which is quite high relative to 
the 1996 level of 2.5 percent.
  Some argue that earmarks help spread the research money to states or 
institutions that would receive less research funding through other 
means. The Chronicle of Higher Education reports that this is not the 
main role they play; often only a minor portion of academic earmark 
funding goes to the states with the smallest shares of Federal research 
funds. Meanwhile, earmarks help some rich institutions become richer. In 
2003, 17 of the 30 institutions receiving the most Federal earmarks were 
also among the 100 that received the most research funds from all 
sources.
  Some proponents of earmarking assert that earmarks provide a means of 
funding unique projects that would not be recognized by the conventional 
peer-review process. To address this concern, a number of agencies have 
procedures and programs to reward out-of-the-box thinking in the 
research they award. For example, within the Department of Defense 
(DOD), the Defense Advanced Research Projects Agency seeks out high 
risk, high payoff scientific proposals, and program managers at NSF set 
aside a share of funding for higher-risk projects in which they see high 
potential.

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  Many earmarks have little to do with an agency's mission. For example, 
the Congress earmarked DOD's 2004 budget to fund research on a wide 
range of diseases, including breast cancer, ovarian cancer, prostate 
cancer, diabetes, leukemia, and polio. Funding at DOD for such research 
totals over two-thirds of a billion dollars in 2004 alone. While 
research on these diseases is very important, it is generally not unique 
to the U.S. military and can be better carried out and coordinated 
within civil medical research agencies, without disruption to the 
military mission. At the same time, intrusion of earmarks into the peer-
review processes of civilian medical research agencies would have a 
significant detrimental impact on funding the most important and 
promising research.
  The Administration will continue to work with academic organizations, 
colleges and universities, and the Congress to discourage the practice 
of research earmarks and to achieve our common objectives.

          III.  PRIORITIES FOR FEDERAL RESEARCH AND DEVELOPMENT

  The 2005 Budget requests $132 billion for Federal R&D funding, a $41 
billion increase since the beginning of this Administration (Table 5-2 
provides details by agency). This is a 44-percent increase over four 
years. Even if military R&D is excluded, the Administration has raised 
civilian R&D investment 26 percent over this same period. The 2005 
Budget targets key basic research investments within agencies such as 
NSF, DOE's Office of Science, DOC's National Institute of Standards and 
Technology, and the National Institutes of Health (NIH), increasing 
basic research funding across all agencies by $6 billion (29 percent) 
since 2001.
  In a 1995 report from the National Academy of Sciences, the scientific 
community proposed a ``Federal Science and Technology'' (FS&T) budget to 
highlight the creation of new knowledge and technologies more 
consistently and accurately than the traditional R&D data collection. 
Also, because the FS&T budget emphasizes research, it does not include 
funding for defense development, testing, and evaluation, and totals 
less than half of Federal R&D spending. FS&T is readily tracked through 
the budget and appropriations process, so the effects of budget 
decisions are clearer more immediately. As shown in Table 5-3, the 2005 
Budget requests $60.4 billion for FS&T, a 27-percent increase since 
2001.
  Over the past year, OSTP and OMB have worked with the Federal agencies 
and the science community to identify top priorities for Federal R&D. 
These are in areas critical to the Nation, such as information 
technologies, and in emerging fields, such as nanotechnology, that will 
provide new breakthroughs across many fields. Some priorities, such as 
combating terrorism R&D, address newly recognized needs. The discussion 
below identifies five multi-agency priority

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areas, followed by highlights of agency-specific R&D priorities.

                       Multi-Agency R&D Priorities

  The 2005 Budget targets investments in important research and 
innovation that benefits from specialization and improved coordination 
across multiple agencies. Three of these multi-agency initiatives--
nanotechnology, information technology R&D, and climate change science--
have dedicated separate coordination offices to ensure unified strategic 
planning and implementation. The Administration is strengthening 
interagency coordination for other priority areas--such as combating 
bioterrorism. The Administration will continue to analyze other areas of 
critical need that could benefit in the future from improved focus and 
coordination among agencies.

  Combating Terrorism R&D: With the creation of the Department of 
Homeland Security (DHS), 2003 marked a fundamental change to the 
management of the Nation's investment in combating terrorism R&D. 
Research programs from across the Federal Government were brought 
together and focused with the specific goal to develop systems to help 
prevent future terrorist activities, minimize our Nation's vulnerability 
to terrorist acts, and respond and recover if an attack should occur. In 
addition to the DHS R&D funding (about $1 billion in 2005), substantial 
combating terrorism programs exist in the Departments of Health and 
Human Services (HHS--over $1.7 billion in 2005), Energy, Defense, 
Commerce, and Justice, as well as the National Science Foundation and 
Environmental Protection Agency (EPA).
  In 2003, there was significant progress in multi-agency efforts, 
including:
    BioWatch, a collaborative effort of DHS, HHS, and EPA, which 
          employs environmental sampling devices in 31 cities across the 
          Nation to quickly detect hazardous biological releases in time 
          to distribute life-saving pharmaceuticals to affected persons.
    Project BioShield--A Presidential initiative that will speed 
          development and procurement of new medical countermeasures 
          against current and future terrorist threats. The 
          Administration is coordinating research agendas and generating 
          requirements and acquisition plans for the next generation of 
          medical countermeasures to biological, chemical, and 
          radiological/nuclear threat agents.
    Atmospheric plume modeling and validation was enhanced by a 
          joint effort of DHS, DOD, and DOE in a month-long atmospheric 
          aerosol dispersion study in Oklahoma City. The resulting data 
          and models will help emergency management, law enforcement, 
          and other personnel to train for and respond to potential 
          chemical, biological, or radiological events.
    Demonstration of radiological and nuclear detection was 
          deployed in the New York City metropolitan area (tunnels, 
          bridges, ports, and airports). This demonstration used state-
          of-the-art detectors from DOE with operations support by DHS 
          and the City of New York, and serves as a model for deploying 
          these technologies in other urban settings.
    DHS initiated a development program for protection of 
          commercial aircraft against surface-to-air missles (Man-
          Portable Air Defense Systems), following an interagency effort 
          that included the Departments of Defense, Transportation, 
          Justice, and State, and the intelligence community. DHS has 
          solicited and selected projects to address this research 
          effort.
  The National Science and Technology Council's (NSTC) Committee on 
Homeland and National Security is working with the Homeland Security 
Council and the National Security Council to identify priorities for and 
facilitate planning among Federal departments and agencies involved in 
homeland security R&D. The coordinated Federal effort is developing: 
strategies to combat weapons of mass destruction; radiological and 
nuclear countermeasures; biological agent detection, diagnostics, 
therapeutics, and forensics; social, behavioral, and economic aspects of 
combating terrorism; and border entry/exit technologies.

  Networking and Information Technology R&D: The budget provides $2.0 
billion for the multi-agency Networking and Information Technology 
Research and Development (NITRD) program. Networking and information 
technologies enable advances in other fields and provide capabilities 
that are utilized by virtually every sector of the economy, generating 
not only new products and tools but also significant improvements in 
productivity. Agencies with NITRD investments work together to 
coordinate their programs and leverage each others' resources, which 
enables more rapid advancement than they could achieve working on their 
own. Recent accomplishments of the NITRD program are helping to support 
progress towards some of the Nation's highest priorities, including 
defense and homeland security. For example, research on the 
incorporation of microsensors into wireless networks has implications 
not only for battlefield reconnaissance but also for environmental 
monitoring, and may also be used to improve the tools that first 
responders depend upon for communication in the field. The development 
of grid computing for accessing and managing distributed information 
technology resources is another example where NITRD research is 
influencing the information technology industry.
  High-end computing continues to be a major focus of interagency 
coordination efforts. In 2003, agencies with responsibilities for high-
end computing formed the High-End Computing Revitalization Task Force 
and have worked to develop an interagency R&D roadmap for high-end 
computing core technologies, a Federal high-end computing capacity and 
accessibility improvement plan, and recommendations relating to Federal 
procurement of high-end computing systems. The NITRD interagency working 
group has taken the first

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steps toward implementing task force recommendations, and it will 
continue to leverage the work of the Task Force in improving interagency 
coordination of high-end computing activities and investments.

  Nanotechnology R&D: The budget provides $886 million for the multi-
agency National Nanotechnology Initiative (NNI), a three-percent 
increase over likely enacted funding in 2004. The NNI focuses on R&D 
that is directed toward understanding and creating materials, devices, 
and systems that exploit the fundamentally distinct properties of matter 
as it is manipulated at the atomic and molecular levels. The results of 
NNI-supported R&D could lead to breakthroughs in disease detection and 
treatment, manufacturing at the nanoscale, environmental monitoring and 
protection, energy production and storage, and electronic devices with 
even greater capabilities than those available today.
  Last year the President signed the 21st Century Nanotechnology 
Research and Development Act, which codified programs and activities 
supported by the NNI. Consistent with this legislation, in 2005, the 
Initiative will continue to focus on fundamental and applied research 
through investigator-led activities, multidisciplinary centers of 
excellence, education and training of nanotechnology workers, and 
infrastructure development, including user facilities and networks that 
are broadly available to researchers from across the scientific research 
community. In addition to supporting advancement of scientific and 
technical knowledge and understanding, as well as development of useful 
applications, the NNI will continue to promote activities aimed at 
assessing the societal implications of nanotechnology, including 
ethical, legal, environmental, and workforce-related issues.
  Last year the President's Council of Advisors on Science and 
Technology (PCAST) was tasked with reviewing the multi-agency 
nanotechnology R&D program, articulating a strategic plan for the 
program, defining specific grand challenges to guide the program, and 
identifying metrics for measuring progress toward those grand 
challenges. In response, PCAST examined the status of nanotechnology R&D 
generally and the NNI in particular. PCAST will deliver an initial 
report in 2004 providing recommendations to further strengthen the 
Initiative.

  Climate Change R&D: In July 2003, the Administration released the 
Strategic Plan for the Climate Change Science Program (CCSP). The Plan 
provides a 10-year strategy and establishes near-term priorities 
consistent with the President's Climate Change Research Initiative, 
which focuses on reducing significant uncertainties in climate science, 
improving global climate observing systems, and developing resources to 
support policymaking and resource management.
  To achieve the goals outlined in the Strategic Plan, the 2005 Budget 
includes $57 million of the $103 million in targeted funding committed 
over two years to accelerate efforts to advance understanding of the 
role of aerosols in climate science, better quantify carbon sources and 
sinks, and improve the technology and infrastructure used to observe and 
model climate variations. These investments will help address critical 
knowledge gaps in climate change science.
  In November 2003, the Administration's Climate Change Technology 
Program (CCTP) released two reports. The first, CCTP's Research and 
Current Activities report, highlights several Administration initiatives 
and other areas of ongoing technology R&D that can help reduce 
greenhouse gas emissions. The CCTP's more comprehensive Technology 
Options for the Near and Long Term is a compendium of technology 
profiles and ongoing R&D at participating Federal agencies.
  The CCTP continues to examine the portfolio of federally funded 
climate change technology R&D and to develop a strategic plan to 
coordinate and prioritize these activities, consistent with the 
President's National Climate Change Technology Initiative (NCCTI). The 
2005 Budget continues support for a NCCTI Competitive Solicitation 
program, a unique approach to selecting and funding innovative research 
ideas based on their potential to reduce, avoid, or sequester greenhouse 
gases. The program will enhance and complement the ongoing base of 
climate change technology R&D.

  Hydrogen R&D: The Hydrogen R&D Interagency Task Force, established by 
OSTP shortly after the President's announcement of the Hydrogen Fuel 
Initiative, serves as the mechanism for collaboration among the nine 
Federal agencies that fund hydrogen-related R&D. In 2003, the task force 
gathered information and provided guidance for agency research 
directions. In 2004, the task force will complete an interagency 10-year 
plan that will improve coordination of agency efforts, accelerate 
progress toward the goals of the initiative, and foster collaboration 
between the Federal Government and the private sector, state agencies, 
and other stakeholders. The DOE-led International Partnership for the 
Hydrogen Economy coordinates hydrogen research between the U.S. and 
other participating governments.

                          Agency R&D Highlights

  Each Federal agency conducts R&D in the context of that agency's 
unique mission, structure, and statutory requirements. Below are 
highlights of key programs in selected agencies in the 2005 Budget. 
Table 5-3 shows the FS&T budget. As shown in Table 5-2, these programs 
and those of other agencies are part of the larger Federal R&D 
portfolio.

  National Institutes of Health (NIH): The 2005 Budget provides $28.6 
billion for NIH, a 2.6-percent increase over the 2004 likely enacted 
level. This level is an $8.2 billion (40.5-percent) increase since 2001.
    The Administration has demonstrated its strong commitment to 
          biomedical research by completing a five-year doubling of the 
          NIH budget.
    NIH continues to play a key role in addressing pressing 
          health research issues, such as access

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          to state-of-the-art instrumentation and biomedical 
          technologies; development of specialized animal and non-animal 
          research models; and emphasis on ``smart'' network-connected 
          technologies, computer-aided drug design, gene and molecular 
          therapy development, and bioengineering approaches to 
          decreased health care costs.
    In addition, the NIH budget continues support for biodefense 
          research by providing $1.74 billion for NIH to accelerate 
          clinical trials, target the development of new therapeutic and 
          vaccine products for agents of bioterrorism, and establish 
          Regional Centers of Excellence in Biodefense and Emerging 
          Infectious Diseases.

  National Aeronautics and Space Administration (NASA): The 2005 Budget 
provides $9.4 billion for FS&T programs at NASA, a 1.3-percent increase 
over the 2004 likely enacted level. This is a 35-percent increase since 
2001.
    The 2005 Budget supports the President's new vision of 
          sustained solar system exploration involving both humans and 
          robots. NASA's FS&T programs will increasingly focus on this 
          vision, which includes:
     --a new program of lunar exploration;
     --further robotic exploration of the solar system;
     --focused exploration of Mars to accelerate the search for water 
         and life and to prepare for future human exploration;
     --development of technologies to support human and robotic space 
         exploration; and
     --refocused Space Station research on activities that support 
         space-exploration goals.
    The budget also supports increased NASA investments in the 
          President's Climate Change Research Initiative, including 
          investment in a critical satellite to help determine the 
          impact of aerosols such as soot and dust on global climate 
          change.
    The budget supports several new major initiatives in 
          aeronautics R&D, including a five-year $600 million program to 
          improve the efficiency of aircraft propulsion systems.
    PART assessments found NASA's Mars and Solar System 
          exploration programs to be effective and the agency's 
          crosscutting technology R&D to be moderately effective. The 
          PART determined that the Space Station Program, Space Station 
          R&D, and the Space Shuttle Program need to develop better 
          performance goals and demonstrate results.

  National Science Foundation (NSF): To further promote research and 
education across the fields of science and engineering, the 2005 Budget 
provides $5.7 billion for NSF, a three-percent increase over the 2004 
likely enacted level. This level is a 30-percent increase since 2001.
    The budget provides: $761 million for NSF's lead role in 
          NITRD, focusing on long-term computer science research and 
          applications; $305 million for NSF's lead role in the National 
          Nanotechnology Initiative; and $210 million for climate change 
          science.
    The budget provides $1.1 billion for NSF programs that 
          emphasize the mathematical and physical sciences, including 
          physics, chemistry, and astronomy. This represents a 31-
          percent increase ($261 million) for these programs since 2001.
    To attract the most promising students into the sciences, 
          the 2005 Budget provides funds for 5,500 graduate research 
          fellowships and traineeships, an increase of 1,800 since 2001. 
          Annual stipends in these programs have increased to a 
          projected $30,000, compared with $18,000 in 2001.
    To enhance science infrastructure capabilities, the Budget 
          initiates construction of the National Ecological Observatory 
          Network, the Scientific Ocean Drilling Vessel, and the Rare 
          Symmetry Violating Processes (RSVP) facility.
    PART assessments found all four of the NSF programs assessed 
          to be effective: Facilities, Individuals, Nanoscale Science 
          and Engineering, and Information Technology Research.

  Department of Energy (DOE): The 2005 Budget provides $5.4 billion for 
FS&T at DOE, a $492 million (or 10-percent) increase since 2001.
    DOE will continue the President's Hydrogen Fuel Initiative 
          to accelerate the worldwide availability and affordability of 
          hydrogen-powered fuel cell vehicles. The initiative, which 
          will now include targeted basic research investments, focuses 
          on research to advance hydrogen production, storage, and 
          infrastructure. The Initiative complements the Department's 
          FreedomCAR Partnership with the auto industry, which is aimed 
          at developing viable hydrogen fuel cell vehicle technology.
    The 2005 Budget provides $3.4 billion for the Office of 
          Science, including funding to ensure its continuing leadership 
          in physical science research and its unique research in 
          genomics, climate change, and supercomputing. The fifth and 
          final nanoscience research center will begin construction as a 
          part of the Office's $211 million investment in the National 
          Nanotechnology Initiative.
    The budget dedicates $447 million to the President's Coal 
          Research Initiative on clean coal technologies, including $237 
          million for FutureGen which will be the world's first zero-
          emissions electricity-producing power plant. This 10-year, $1 
          billion project will be cost-shared by the private sector and 
          international participants.
    DOE will continue its support for R&D to improve energy 
          efficiency and reliability in buildings, industry, 
          transportation, and the Federal Government ($544 million), and 
          to reduce the cost of renewable energy technologies, such as 
          wind, solar, geothermal, and biomass ($375 million).
    The budget provides $34 million for the Generation IV 
          Nuclear Energy Systems Initiative and $46 million for the 
          Advanced Fuel Cycle Initiative to develop next-generation 
          nuclear reactor and fuel

[[Page 56]]

          cycle technologies that are sustainable, proliferation-
          resistant, and economical.
    The budget includes $91 million for electricity transmission 
          and distribution reliability R&D activities, a 12-percent 
          increase over 2004. These funds include $45 million for high 
          temperature superconductivity, $6 million for the new 
          Gridworks program to support research that will enable power 
          lines to carry more power and better control the flow of 
          electricity to prevent blackouts, and $5 million for the 
          Gridwise program to improve the communications and control 
          system for the electricity grid.

  Department of Defense (DOD): DOD funds a wide range of R&D to ensure 
that our military forces have the tools to protect the Nation's 
security. In 2005, DOD's budget includes $5.2 billion that appears in 
the FS&T budget. This level is a $225 million (4.6-percent) increase 
since 2001.
    The 2005 Budget funds ``Science and Technology'' programs to 
          explore and develop technical options for new defense systems 
          and to avoid being surprised by new technologies in the hands 
          of adversaries. Areas of emphasis include computing and 
          communications, sensors, nanotechnology, and hypersonic 
          propulsion systems. DOD's S&T includes the research counted in 
          the FS&T budget, plus advanced technology development.
    The Missile Defense Agency continues to develop technologies 
          for intercepting ballistic missiles in multiple phases of 
          flight. The budget provides funding for missile defense R&D, 
          which includes new efforts for high-speed, boost-phase 
          interceptors, sea-based radars, directed energy technology and 
          advanced battle management systems.
    The Army continues development efforts in support of the 
          Future Combat System as a major part of its transformation to 
          a lighter, more mobile, and more effective fighting force.
    Development continues on the Joint Strike Fighter, the next 
          generation affordable multi-role fighter aircraft, which will 
          use innovative technologies to keep costs low.
    The Navy continues development of the next generation DD(X) 
          destroyer, the Littoral Combat Ship and associated shipboard 
          technologies. These platforms will provide advanced 
          capabilities that will ensure U.S. naval superiority continues 
          into the future.
    R&D to address terrorist and other unconventional threats 
          continue to be a high priority. Systems and technologies under 
          development to address defense against chemical or biological 
          agents include: improved detectors of chemical and biological 
          threats; troop protective gear for use under chemical and 
          biological attack that is both more effective and more 
          comfortable; and vaccines to protect against biological 
          agents.

  Department of Agriculture (USDA): The 2005 Budget provides $1.9 
billion for FS&T at USDA.
    Funding for the Agricultural Research Service includes 
          increases in high priority areas, such as homeland security 
          (food safety and emerging and exotic diseases), genomics and 
          genetics, human nutrition, and the establishment of a National 
          Plant Disease Recovery System.
    The Cooperative State Research, Education, and Extension 
          Service funding for research and education grants includes 
          $180 million for the National Research Initiative, an increase 
          of $16 million (10 percent) over 2004, and $30 million for the 
          network of university-based diagnostic laboratories. The 
          budgets for both in-house research and research grants do not 
          continue funding for unrequested earmarks.
    The Economic Research Service budget includes increases 
          totaling $7 million to study consumer behavior, particularly 
          dietary attitudes, food consumption, and health awareness.
    The budget includes an emphasis on putting forestry research 
          to work, providing a significant increase to optimize the 
          delivery of research findings by improving Forest Service 
          management of investments in research, development, and 
          technology applications. Funds are also provided for research 
          on rapid management responses to address threats against 
          forest and rangeland health and agriculture by invasive 
          species.

  Department of the Interior (DOI): Within the Department of the 
Interior, the 2005 Budget provides $920 million for the United States 
Geological Survey (USGS). USGS provides science and information for DOI 
bureaus and local communities to make informed decisions regarding land 
and resource management. In 2005 some areas of focus for USGS include:
    Work with at-risk jurisdictions to increase the number that 
          have adopted hazard mitigation measures based on USGS geologic 
          hazard information, and coordination with Federal partners to 
          determine the effectiveness of Federal efforts to reduce the 
          loss of life and property due to geologic hazards.
    Expansion of USGS capabilities to monitor ground 
          deformations with remote sensing technology, InSAR, to assist 
          in predicting volcanic activity.
    Additional water availability and aquifer characterization 
          studies to support DOI's Water 2025, and an additional $2 
          million to provide critical information about water quality 
          and quantity and fish ecology that is necessary for management 
          of the Klamath River Basin.
    Consistent with 2004 PART findings, USGS is restructuring 
          the Geography program in order to migrate from its traditional 
          role as the primary data collector and producer of topographic 
          maps to one that focuses on data sharing and partnerships. 
          Workforce restructuring will provide savings in 2004 and 2005 
          to fund partnerships to

[[Page 57]]

          develop needed science and applications to promote geographic 
          integration and analyses.

  Department of Commerce (DOC): The 2005 Budget provides $832 million 
for FS&T at the Department of Commerce.
    For the National Institute of Standards and Technology 
          (NIST), the budget provides $482 million for research and 
          physical improvements at NIST's Measurement and Standards 
          Laboratories. The budget also supports NIST facilities, 
          including equipment for the Advanced Measurement Laboratory in 
          Maryland and renovations of facilities in Boulder, Colorado.
    The 2005 Budget proposes to terminate the Advanced 
          Technology Program (ATP). The Administration believes that 
          other NIST research and development programs are much more 
          effective and necessary in supporting the fundamental 
          scientific understanding and technological needs of U.S.-based 
          businesses, American workers, and the domestic economy. 
          Further, large shares of ATP funding have gone to major 
          corporations, and projects often have been similar to those 
          being carried out by firms not receiving such subsidies.
    For the National Oceanic and Atmospheric Administration 
          (NOAA) the 2005 Budget provides $350 million for ongoing 
          research on climate, weather, air quality, and ocean 
          processes. This funding level includes $19 million for NOAA to 
          expand climate observing capabilities in support of the 
          Administration's recently released Climate Change Science 
          Program (CCSP) Strategic Plan.

  Department of Veterans Affairs (VA): The 2005 Budget provides $770 
million for FS&T at the Department of Veterans Affairs. This level is a 
seven-percent increase since 2001. This will provide level funding to 
the VA R&D program after taking into consideration the significant 
funding the Department receives from other governmental agencies and 
private entities to support VA-conducted research. The total VA R&D 
program resources are $1.7 billion.
    VA will soon begin to use increased funding from private 
          companies for the indirect administration costs of conducting 
          research in VA facilities.
    The 2005 Budget provides for clinical, epidemiological, and 
          behavioral studies across a broad spectrum of medical research 
          disciplines. Among the agency's top research priorities are 
          improving the translation of research results into patient 
          care, special populations (those afflicted with spinal cord 
          injury, visual and hearing impairments, and serious mental 
          illness), geriatrics, diseases of the brain (e.g., Alzheimer's 
          and Parkinson's), treatment of chronic progressive multiple 
          sclerosis, and chronic disease management.
    The 2005 Budget reflects a restructuring of total resources 
          in the Research Business Line as first shown in the 2004 
          Budget.

  Environmental Protection Agency (EPA): The budget provides $725 
million for FS&T for the Environmental Protection Agency to ensure that 
its efforts to safeguard human health and the environment are based on 
the best available scientific and technical information.
    EPA's homeland security research will result in more 
          efficient and effective cleanup of contaminated buildings and 
          faster threat detection and response for water systems. 
          Additionally, EPA will develop practices and procedures that 
          provide elected officials and other decision makers, the 
          public, and first responders with rapid risk assessment 
          protocols for chemical and biological threats.
    As part of its Water Quality Monitoring initiative, EPA will 
          address the integration of different scales and types of 
          monitoring to target effective water quality management 
          actions and document effectiveness of water quality management 
          programs.

  Department of Transportation (DOT): The 2005 Budget provides $659 
million for FS&T at DOT, a $138 million (26.5-percent) increase since 
2001.
    The Federal Highway Administration ($429 million in 2005) 
          supports research, technology, and education to improve the 
          quality and safety of the Nation's transportation 
          infrastructure, such as increasing the quality and longevity 
          of roadways, identifying safety improvements, and promoting 
          congestion mitigation through the use of Intelligent 
          Transportation Systems.
    The budget of the National Highway Traffic Safety 
          Administration provides $103 million for R&D in crash-
          worthiness, crash avoidance, and data analysis to help reduce 
          highway fatalities and injuries. The budget also includes 
          funding for a crash causation survey.
    In 2005, R&D at the Federal Motor Carrier Safety 
          Administration focuses on issues including driver safety 
          performance, commercial vehicle safety performance, carrier 
          compliance and safety, and other studies toward the goal of 
          achieving a substantial reduction in crashes and fatalities.
    The 2005 Budget provides $117 million for the Federal 
          Aviation Administration to continue critical safety and 
          capacity research. The PART assessment found this program to 
          be effective; it is well-managed and results-oriented, with a 
          strategic plan that sets forth clear long-term goals that are 
          tied to program performance measures.

  Department of Education: The 2005 Budget provides $370 million for 
research activities at the Department of Education, a $20 million 
increase over the 2004 likely enacted level.
    The Institute of Education Sciences (IES) has the lead 
          responsibility for the Department's strategic goal of 
          transforming education into an evidence-based field. Research, 
          development, and dissemination ($185 million in 2005) supports 
          research

[[Page 58]]

          to advance our understanding of how students learn and 
          identify effective approaches and interventions to improve 
          education.
    Research and innovation in special education activities ($78 
          million in 2005) yield new knowledge and help translate 
          scientifically valid information into applied strategies. The 
          2005 PART showed that the program does not have specific long-
          term outcome goals against which its impact can be measured. 
          The program is working to articulate long-term research 
          objectives that have measurable outcomes. Pending legislation 
          would transfer this program from the Office of Special 
          Education Programs to IES to promote better coordination.
    The National Institute for Disability Rehabilitation and 
          Research (NIDRR--$107 million in 2005) conducts research, 
          demonstration and training activities that advance independent 
          living for people with disabilities. Consistent with the 
          President's New Freedom Initiative, NIDRR's activities promote 
          community integration and employment outcomes. The 2005 PART 
          showed that NIDRR cannot demonstrate the results of its 
          investments without long term performance measures. In 
          response to this finding, NIDRR is developing long-term 
          research goals that have measurable outcomes.

  Department of Homeland Security (DHS): The 2005 Budget requests just 
over one billion dollars for DHS R&D. Within DHS, the Directorate of 
Science and Technology (S&T) serves as a centralized R&D arm that 
consolidates piecemeal R&D efforts into one agency. Its sole focus is to 
harness revolutionary technology, which can be used by law enforcement 
and emergency response personnel in carrying out their mission to 
protect the Nation. S&T works to solicit proposals and seeks to engage 
our Nation's well-established R&D community in the fight against 
terrorism. S&T has separate offices dedicated to addressing the threat 
posed by each major category of weapons of mass destruction, such as 
chemical, biological, radiological, nuclear, and high-explosives.

                     Stimulating Private Investment

  Along with direct spending on R&D, the Federal Government has sought 
to stimulate private R&D investment through tax preferences. Current law 
provides a 20-percent tax credit for private research and 
experimentation expenditures above a certain base amount. The credit, 
which expired in 1999, was retroactively reinstated for five years, 
through 2004, in the Tax Relief Extension Act of 1999. The budget 
proposes to make the Research and Experimentation (R&E) tax credit 
permanent. The proposed extension will cost nearly $30 billion over the 
period from 2005 to 2009. In addition, a permanent tax provision lets 
companies deduct, up front, the costs of certain kinds of research and 
experimentation, rather than capitalize these costs. Also, equipment 
used for research benefits from relatively rapid cost recovery. Table 5-
1 shows a forecast of the costs of the tax credit.

                                     

                 Table 5-1.  PERMANENT EXTENSION OF THE RESEARCH AND EXPERIMENTATION TAX CREDIT
                                 (Budget authority, dollar amounts in millions)
----------------------------------------------------------------------------------------------------------------
                                                     2004     2005     2006     2007     2008     2009   2005-09
----------------------------------------------------------------------------------------------------------------
Current Law......................................    4,400    2,550    1,090      460      150       60    4,310
Proposed Extension...............................      672    3,610    5,187    6,291    7,129    7,775   29,992
                                                  --------------------------------------------------------------
  Total..........................................    5,072    6,160    6,277    6,751    7,279    7,835   34,302
----------------------------------------------------------------------------------------------------------------



                          IV.  FEDERAL R&D DATA

                           Federal R&D Funding

  R&D is the collection of efforts directed towards gaining greater 
knowledge or understanding and applying knowledge toward the production 
of useful materials, devices, and methods. R&D investments can be 
characterized as basic research, applied research, development, R&D 
equipment, or R&D facilities, and OMB has used those or similar 
categories in its collection of R&D data since 1949.

  Basic research is defined as systematic study directed toward greater 
knowledge or understanding of the fundamental aspects of phenomena and 
of observable facts without specific applications towards processes or 
products in mind.
  Applied research is systematic study to gain knowledge or 
understanding necessary to determine the means by which a recognized and 
specific need may be met.

[[Page 59]]

  Development is systematic application of knowledge toward the 
production of useful materials, devices, and systems or methods, 
including design, development, and improvement of prototypes and new 
processes to meet specific requirements.
  Research and development equipment includes acquisition or design and 
production of movable equipment, such as spectrometers, microscopes, 
detectors, and other instruments.
  Research and development facilities include the acquisition, design, 
and construction of, or major repairs or alterations to, all physical 
facilities for use in R&D activities. Facilities include land, 
buildings, and fixed capital equipment, regardless of whether the 
facilities are to be used by the Government or by a private 
organization, and regardless of where title to the property may rest. 
This category includes such fixed facilities as reactors, wind tunnels, 
and particle accelerators.
  There are over twenty Federal agencies that fund R&D in the U.S. The 
nature of the R&D that these agencies fund depends on the mission of 
each agency and on the role of R&D in accomplishing it. Table 5-2 shows 
agency-by-agency spending on basic and applied research, development, 
and R&D equipment and facilities.

                                                  Table 5-2.  FEDERAL RESEARCH AND DEVELOPMENT SPENDING
                                                     (Budget authority, dollar amounts in millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                               Dollar         Percent
                                                                                          2003        2004         2005        Change:     Change:  2004
                                                                                         Actual     Estimate     Proposed   2004 to 2005      to 2005
--------------------------------------------------------------------------------------------------------------------------------------------------------
By Agency
  Defense............................................................................     58,838       65,484       69,856         4,372              7%
  Health and Human Services..........................................................     27,411       28,275       29,381         1,106              4%
  NASA...............................................................................     10,681       10,893       11,308           415              4%
  Energy.............................................................................      8,312        8,835        8,893            58              1%
  National Science Foundation........................................................      3,972        4,115        4,252           137              3%
  Agriculture........................................................................      2,334        2,308        2,105          -203             -9%
  Homeland Security..................................................................        737        1,053        1,216           163             15%
  Commerce...........................................................................      1,200        1,126        1,075           -51             -5%
  Veterans Affairs...................................................................        819          824          772           -52             -6%
  Transportation.....................................................................        701          701          749            48              7%
  Interior...........................................................................        643          675          648           -27             -4%
  Environmental Protection Agency....................................................        568          575          577             2              0%
  Other..............................................................................      1,223        1,092        1,034           -58             -5%
                                                                                      ------------------------------------------------------------------
    Total............................................................................    117,439      125,956      131,866         5,910              5%
 
Basic Research
  Defense............................................................................      1,369        1,404        1,341           -63             -4%
  Health and Human Services..........................................................     14,120       14,732       15,198           466              3%
  NASA...............................................................................      2,213        2,584        2,324          -260            -10%
  Energy.............................................................................      2,556        2,750        2,664           -86             -3%
  National Science Foundation........................................................      3,422        3,551        3,642            91              3%
  Agriculture........................................................................        867          914          783          -131            -14%
  Homeland Security..................................................................         47           47          153           106            226%
  Commerce...........................................................................         54           57           83            26             46%
  Veterans Affairs...................................................................        327          332          308           -24             -7%
  Transportation.....................................................................         23           20           40            20            100%
  Interior...........................................................................         41           40           38            -2             -5%
  Environmental Protection Agency....................................................         97           79           91            12             15%
  Other..............................................................................        170          165          182            17             10%
                                                                                      ------------------------------------------------------------------
    Subtotal.........................................................................     25,306       26,675       26,847           172            0.6%
 
Applied Research
  Defense............................................................................      4,252        4,425        3,828          -597            -13%
  Health and Human Services..........................................................     11,982       13,174       13,522           348              3%
  NASA...............................................................................      3,192        3,052        3,122            70              2%
  Energy.............................................................................      2,656        3,020        3,395           375             12%
  National Science Foundation........................................................        218          211          220             9              4%
  Agriculture........................................................................        974        1,049          888          -161            -15%
  Homeland Security..................................................................         92          124          278           154            124%
  Commerce...........................................................................        910          891          838           -53             -6%
  Veterans Affairs...................................................................        451          450          425           -25             -6%
  Transportation.....................................................................        405          398          455            57             14%
  Interior...........................................................................        547          584          560           -24             -4%
  Environmental Protection Agency....................................................        366          361          346           -15             -4%
  Other..............................................................................        579          609          617             8              1%
                                                                                      ------------------------------------------------------------------
    Subtotal.........................................................................     26,624       28,348       28,494           146            0.5%
 

[[Page 60]]

 
Development
  Defense............................................................................     53,172       59,603       64,622         5,019              8%
  Health and Human Services..........................................................        160          140          386           246            176%
  NASA...............................................................................      2,963        2,994        3,247           253              8%
  Energy.............................................................................      1,946        1,956        1,840          -116             -6%
  National Science Foundation........................................................  .........  ...........  ...........  ............             N/A
  Agriculture........................................................................        145          152          142           -10             -7%
  Homeland Security..................................................................        549          794          750           -44             -6%
  Commerce...........................................................................        135          128           53           -75            -59%
  Veterans Affairs...................................................................         41           42           39            -3             -7%
  Transportation.....................................................................        254          270          235           -35            -13%
  Interior...........................................................................         53           48           47            -1             -2%
  Environmental Protection Agency....................................................        105          135          140             5              4%
  Other..............................................................................        460          311          228           -83            -27%
                                                                                      ------------------------------------------------------------------
    Subtotal.........................................................................     59,983       66,573       71,729         5,156              8%
 
Facilities and Equipment
  Defense............................................................................         45           52           65            13             25%
  Health and Human Services..........................................................      1,149          229          275            46             20%
  NASA...............................................................................      2,313        2,263        2,615           352             16%
  Energy.............................................................................      1,154        1,109          994          -115            -10%
  National Science Foundation........................................................        332          353          390            37             10%
  Agriculture........................................................................        348          193          292            99             51%
  Homeland Security..................................................................         49           88           35           -53            -60%
  Commerce...........................................................................        101           50          101            51            102%
  Veterans Affairs...................................................................  .........  ...........  ...........  ............             N/A
  Transportation.....................................................................         19           13           19             6             46%
  Interior...........................................................................          2            3            3  ............  ..............
  Environmental Protection Agency....................................................  .........  ...........  ...........  ............             N/A
  Other..............................................................................         14            7            7  ............  ..............
                                                                                      ------------------------------------------------------------------
    Subtotal.........................................................................      5,526        4,360        4,796           436             10%
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 61]]


                                                    Table 5-3.  FEDERAL SCIENCE AND TECHNOLOGY BUDGET
                                                     (Budget authority, dollar amounts in millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                               Dollar         Percent
                                                                               2001       2003        2004         2005        Change:     Change:  2004
                                                                              Actual     Actual     Estimate     Proposed   2004 to 2005      to 2005
--------------------------------------------------------------------------------------------------------------------------------------------------------
By Agency
 
National Institutes of Health.............................................     20,361     27,066       27,878       28,607           729              3%
NASA \1\..................................................................      6,945      7,276        9,249        9,373           124              1%
  Space Science...........................................................      2,609      3,531        3,971        4,068            97              2%
  Earth Science...........................................................      1,762      1,717        1,613        1,485          -128             -8%
  Biological & Physical Research..........................................        362        883          985        1,049            64              6%
  Aeronautics Technology..................................................        975      1,145        1,034          919          -115            -11%
  Exploration Systems and Crosscutting Technology  \2\....................      1,237      1,741        1,646        1,852           206             13%
 
National Science Foundation...............................................      4,431      5,323        5,578        5,745           167              3%
 
Energy \3\................................................................      4,886      5,208        5,494        5,378          -116             -2%
  Science Programs........................................................      3,218      3,307        3,484        3,432           -52             -1%
  Energy Supply: Renewables...............................................        312        322          357          375            18              5%
  Energy Supply: Electricity Transmission & Distribution \4\..............         56         88           81           91            10             12%
  Energy Supply: Nuclear Energy...........................................        238        258          292          300             8              3%
  Energy Conservation \5\.................................................        619        612          607          544           -63            -10%
  Fossil Energy \6\.......................................................        443        621          673          636           -37             -5%
 
Defense...................................................................      4,944      5,621        5,829        5,169          -660            -11%
  Basic Research..........................................................      1,271      1,369        1,404        1,341           -63             -4%
  Applied Research........................................................      3,673      4,252        4,425        3,828          -597            -13%
 
Agriculture...............................................................      1,885      1,988        2,048        1,865          -183             -9%
  CSREES Research & Education \7\.........................................        514        626          629          516          -113            -18%
  Economic Research Service...............................................         69         69           71           80             9             13%
  Agricultural Research Service \8\.......................................        936      1,043        1,082          988           -94             -9%
  Mandatory IFAFS \9\.....................................................        120  .........  ...........  ...........  ............             N/A
  Forest Service \10\.....................................................        246        250          266          281            15              6%
 
Interior (USGS)...........................................................        884        919          938          920           -18             -2%
 
Commerce..................................................................        817        974          965          832          -133            -14%
  NOAA (Oceanic & Atmospheric Research)...................................        325        372          393          350           -43            -11%
  NIST Intramural Research and Facilities.................................        347        423          401          482            81             20%
  NIST Advanced Technology Program........................................        145        179          171  ...........          -171           -100%
 
Veterans Affairs \11\.....................................................        719        818          820          770           -50             -6%
 
Environmental Protection Agency \12\......................................        746        801          826          725          -101            -12%
 
Transportation............................................................        521        655          683          659           -24             -4%
  Highway research \13\...................................................        387        508          564          542           -22             -4%
  Aviation research \14\..................................................        134        147          119          117            -2             -2%
 
Education.................................................................        363        325          350          370            20              6%
  Special Education Research and Innovation...............................         77         77           78           78  ............  ..............
  NIDRR \15\..............................................................        100        109          107          107  ............  ..............
  Research, Development, and Dissemination \16\...........................        186        139          165          185            20             12%
                                                                           -----------------------------------------------------------------------------
  Total...................................................................     47,502     56,974       60,658       60,413          -245           -0.4%
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ All years normalized to reflect 2003 transfers of funding for Space Station research facilities, space communications activities, and associated
  institutional support from human space flight.
\2\ Includes Integrated Technology Transfer Partnerships, Mission and Science Measurement Technology, and the Space Launch Initiative.
\3\ 2001 and 2003 data reflect transfers to Science Programs from other Department of Energy R&D programs to support the Small Business Innovation
  Research program and the Small Business Technology Transfer program.
\4\ This office was created in 2004. Data for 2001 and 2003 reflect funding for these activities from within the Renewable budget, which has been
  adjusted accordingly.
\5\ Excludes weatherization and state grant programs.
\6\ Enacted and requested levels exclude balances transferred from the Clean Coal Technology program for activities in 2003 ($40 million), and 2004 ($14
  million). No transfers in 2005.
\7\ Includes Receipts for Native American Endowment: $7 million in 2003; $9 million in 2004; $12 million in 2005.
\8\ Excludes buildings and facilities.
\9\ Initiative for Future Agriculture and Food Systems.
\10\ Forest and Rangeland Research.
\11\ The VA research program budget has been restructured to include the research appropriation and VA medical care support transfer to research. This
  table shows resources under the revised budget structure.
\12\ Science and Technology, plus superfund transfer. The 2003 superfund transfer includes homeland resources for building decontamination research.
\13\ Includes research and development funding for the Federal Highway Administration, the Federal Motor Carrier Safety Administration, and the National
  Highway Traffic Safety Administration.
\14\ Includes Federal Aviation Administration Research, Engineering, and Development.
\15\ National Institute on Disability and Rehabilitation Research.
\16\ Does not include funding for Regional Educational Labs.


[[Page 62]]


                                              Table 5-4.  AGENCY DETAIL OF SELECTED INTERAGENCY R&D EFFORTS
                                                     (Budget authority, dollar amounts in millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                               Dollar         Percent
                                                                                          2003        2004         2005        Change:     Change:  2004
                                                                                         Actual     Estimate     Proposed   2004 to 2005      to 2005
--------------------------------------------------------------------------------------------------------------------------------------------------------
Networking and Information Technology R&D
  National Science Foundation........................................................        743          754          761             7              1%
  Health and Human Services \1\......................................................        376          368          371             3              1%
  Energy.............................................................................        308          344          354            10              3%
  National Aeronautics and Space Administration......................................        213          275          259           -16             -6%
  Defense............................................................................        296          252          226           -26            -10%
  Commerce...........................................................................         26           26           33             7             27%
  Environmental Protection Agency....................................................          2            4            4  ............  ..............
                                                                                      ------------------------------------------------------------------
  Total..............................................................................      1,964        2,023        2,008           -15             -1%
 
National Nanotechnology Initiative
  National Science Foundation........................................................        221          254          305            51             20%
  Energy.............................................................................        134          203          211             8              4%
  Defense............................................................................        220          218          180           -38            -17%
  National Institutes of Health......................................................         78           80           89             9             11%
  Commerce (NIST)....................................................................         64           63           53           -10            -16%
  National Aeronautics and Space Administration......................................         36           37           35            -2             -5%
  Agriculture........................................................................  .........            1            5             4            400%
  Environmental Protection Agency....................................................          5            5            5  ............  ..............
  Justice............................................................................          1            2            2  ............  ..............
  Homeland Security (TSA)............................................................          1            1            1  ............  ..............
                                                                                      ------------------------------------------------------------------
  Total..............................................................................        760          864          886            22              3%
 
Climate Change Science Program
  National Aeronautics and Space Administration......................................      1,146        1,334        1,271           -63             -5%
  National Science Foundation........................................................        202          213          210            -3             -1%
  Commerce (NOAA)....................................................................        117          130          142            12              9%
  Energy.............................................................................        120          133          134             1              1%
  Agriculture........................................................................         68           67           74             7             10%
  National Institutes of Health......................................................         59           61           61  ............  ..............
  Interior (USGS)....................................................................         26           28           29             1              4%
  Environmental Protection Agency....................................................         19           22           21            -1             -5%
  Smithsonian........................................................................          6            6            6  ............  ..............
  U.S. Agency for International Development..........................................          6            6            6  ............  ..............
  Transportation.....................................................................  .........  ...........            3             3             N/A
  State..............................................................................  .........            1            1  ............  ..............
                                                                                      ------------------------------------------------------------------
  Total..............................................................................      1,769        2,001        1,958           -43             -2%
                                                                                      ------------------------------------------------------------------
  Subtotal, CCRI \2\ (included in CCSP total)........................................         41          168          238            70             42%
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Includes funds from offsetting collections for the Agency for Healthcare Research and Quality.
\2\ Climate Change Research Initiative.