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



[[Page 43]]


 
                       5. RESEARCH AND DEVELOPMENT

  During the past five years the U.S. economy has shown remarkable 
resilience and vitality. Economic growth is now steady and strong. 
Incomes are rising, household net worth is at an all-time high, and 
unemployment is low and continues to decline. Meanwhile inflation 
remains in check, largely because of record sustained productivity 
growth--averaging a 3.4 percent annual rate for the past half-decade.
  Our prosperity is no accident. The U.S. economy owes its strength in 
large measure to its willingness to build innovation capacity through 
the creation and growth of a world-class science and technology research 
enterprise and a high-quality scientific and technical education 
infrastructure. The relationship between support for science and 
economic growth is well documented. Investments in basic research lead 
to knowledge breakthroughs that fuel innovation, drive productivity, 
grow the economy, and change the way we see the world. Economists 
estimate that approximately half of post-World War II economic growth is 
directly due to technological progress fueled by research and 
development (R&D).
  Economic payoffs to research come in the form of process and product 
innovations that reduce the costs of production, lower product prices, 
and result in new and better products and services. Consumers ultimately 
benefit from less expensive, higher quality and more useful products and 
services, and of course from earnings accruing to innovative companies. 
Today's transforming technologies and most popular consumer items have 
deep roots in basic and applied research.
  By nearly every relevant metric, the U.S. leads the world in science 
and technology. With only about five percent of the world's population, 
the U.S. employs nearly one-third of all scientists and engineers and 
accounts for approximately one-third of global R&D spending (more than 
the rest of the G-8 nations combined), and U.S. researchers publish 35 
percent of global science and engineering articles.
  To sustain the nation's economic competitiveness, the President has 
called for a long-term vision to strengthen Federal support for the 
Nation's innovation enterprise in an integrated package of investments 
and policies in the American Competitiveness Initiative.

                                     



[[Page 44]]

               I.  THE AMERICAN COMPETITIVENESS INITIATIVE

  The centerpiece of the American Competitiveness Initiative in the 
President's 2007 Budget is a strong commitment to invest in basic 
research areas that advance knowledge and technologies used by 
scientists in nearly every field. Through the American Competitiveness 
Initiative, President Bush plans to double, over 10 years, investment in 
innovation-enabling research at three Federal agencies--the National 
Science Foundation (NSF), the Department of Energy's (DOE's) Office of 
Science, and the Department of Commerce's National Institute of Science 
and Technology (NIST) laboratories.
  In 2007, the first year of the American Competitiveness Initiative, 
President Bush proposes $10.7 billion total for these agencies, an 
overall funding increase of $910 million, or 9.3 percent, above 2006. To 
reach doubling within ten years, overall annual increases will average 
roughly seven percent.
------------------------------------------------------------------------

                          Research Agencies in the American Competitiveness Initiative
 
 
 
The National Science Foundation is the primary source of support for academic research in the physical sciences,
 funding potentially transformative basic research in areas such as nanotechnology, advanced networking and
 information technology, physics, chemistry, materials science, mathematics, and engineering. It is well
 regarded for management of funding through a competitive, peer-reviewed process. The increase in NSF funding is
 expected to support as many as 500 more research grants in 2007 and 6,400 additional researchers, students,
 post-doctoral fellows and technicians contributing to the innovation enterprise.
 
The Department of Energy's Office of Science supports grants and infrastructure for a wide range of basic
 research related to economically significant innovations including nanotechnology, biotechnology, high-end
 computing and advanced networking, and energy technologies. In addition to supporting 2,600 (10 percent) more
 researchers in 2007 than in 2006, the initiative provides for the construction of a number of cutting-edge
 scientific research tools with direct implications for economically-relevant R&D, including the world's most
 powerful civilian supercomputer and an x-ray light source user facility with world-leading capabilities to
 study materials, chemicals, and biological matter at the scale of an individual atom.
 
The Department of Commerce's National Institute of Standards and Technology is a high-leverage Federal research
 agency that supports economically significant innovations such as new materials and processes, electronics,
 computing and information technologies, advanced manufacturing integration, biotechnology, new energy sources
 such as hydrogen, and nanotechnology. NIST also plays a critical role in supporting standards development
 activities that are used by industry and government agencies.
 
 

------------------------------------------------------------------------

             II.  IMPROVING THE 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. Therefore, every Federal R&D 
dollar must be invested as effectively as possible.

                         R&D Investment Criteria

  The Administration continues to improve the effectiveness of the 
Federal Government's investments in R&D by applying transparent 
investment criteria in analyses that inform recommendations for program 
funding and management. R&D performance assessment must be done with 
care. Research often leads scientists and engineers down unpredictable 
pathways with unpredictable results. This outcome can require special 
consideration when measuring an R&D program's performance against its 
initial goals.
  With this in mind, the Administration is improving methods for setting 
priorities based on expected results, and is asking agencies to apply 
specific criteria that programs or projects must meet to be started or 
continued and supply clear milestones for gauging progress and improved 
metrics for assessing results.
  As directed by the President's Management Agenda, the R&D Investment 
Criteria accommodate the wide range of R&D activities, from basic 
research to development and demonstration programs, by addressing 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 apply 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.

[[Page 45]]

  As part of the President's Management Agenda's Budget and Performance 
Integration initiative, the Administration uses the Program Assessment 
Rating Tool (PART) to consistently assess the effectiveness of programs. 
A section of the PART specifically addresses the assessment of R&D 
program management and performance and is aligned with the R&D 
Investment criteria. In the last four years, agencies completed 795 PART 
assessments, of which 102 were for R&D programs. The results of these 
PART assessments may be found on the web at www.whitehouse.gov/omb/
part/.
  Performance assessments help policy makers identify those programs 
that are the most effective and worthy of funding; however, the 
Administration does not allocate funding levels and initiate management 
reforms strictly by formula or based solely on PART results. For 
instance, funding may be reduced for Effective programs that have 
achieved what they set out to do, and Ineffective programs might receive 
more money if it is clear it would help them become more effective. The 
PART provides information that leads to more informed decisions. 


  R&D agencies will continue to integrate the R&D Criteria more 
meaningfully into the budget formulation process in the coming year. 
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.

                                     

------------------------------------------------------------------------

                                    President's Management Agenda Initiative
 
 
 
Research and Development Investment Criteria
 
FY 2006, 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 maintains momentum,
 as more R&D agencies use the criteria to assess their programs. All of the top 13 R&D agencies are using the
 R&D PART to assess their programs this year.
 
 

------------------------------------------------------------------------

[[Page 46]]



                            Research Earmarks

  The Administration strongly supports awarding research funds based on 
merit review through a competitive process refereed by scientists. Such 
a system has the best prospects for ensuring that the top research is 
supported. Research earmarks--in general the assignment of money during 
the legislative process for use by a specific organization or project--
are counter to a merit-based competitive selection process. Earmarks 
signal to potential investigators that there is an acceptable 
alternative to creating quality research proposals for merit-based 
consideration. Such an alternative can be an ineffective use of taxpayer 
funds.
  Unfortunately, the practice of earmarking funds to colleges, 
universities, and other entities for specific research projects has 
expanded dramatically in recent years. The American Association for the 
Advancement of Science (AAAS) recently estimated that R&D earmarks total 
$2.4 billion in 2006, an increase of 13 percent over the Association's 
2005 estimate. The AAAS uses a relatively narrow definition of an R&D 
earmark. Other organizations have estimated even higher levels of R&D 
earmarking.
  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 has reported that this is not 
the main role earmarks play. Often only a minor portion of academic 
earmark funding goes to the states with the smallest shares of Federal 
research funds.
  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 research 
agencies have procedures and programs to reward ``out-of-the-box'' 
thinking. Within the Department of Defense (DOD), the Defense Advanced 
Research Projects Agency seeks out high-risk, high-payoff scientific 
proposals, and program managers at the NSF set aside a share of funding 
for higher-risk projects in which they see high potential.
  Earmarks that are outside of an agency's mission can detract from an 
efficient and effective Federal effort on behalf of taxpayers. For 
instance, the Congress directed DOD to fund research on a wide range of 
diseases including ovarian cancer, prostate cancer, diabetes, leukemia, 
and childhood cancer. Congressional adds in DOD's budget for medical 
research projects totals about $900 million in 2006 alone. While 
research on these diseases is very important, it is generally not unique 
to the U.S. military and can be better selected, 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.
  Earmarks that divert funding from a merit-based process will undermine 
America's research productivity. The Administration commends Congress 
for taking measures to protect NSF and the National Institutes of Health 
from this practice, which is a practice that should be followed 
throughout the R&D programs.

          III.  PRIORITIES FOR FEDERAL RESEARCH AND DEVELOPMENT

  The 2007 Budget requests $137 billion for Federal R&D funding, which 
targets key research investments within agencies such as NSF, the DOE's 
Office of Science, and the Department of Commerce's National Institute 
of Standards and Technology laboratories. (Table 5-1 provides details by 
agency).
  The ``Federal Science and Technology'' (FS&T) budget (shown in Table 
5-2) highlights the creation of new knowledge and technologies more 
consistently and accurately than overall R&D data collection. The FS&T 
budget emphasizes research; does not count funding for defense 
development, testing, and evaluation; and totals less than half of 
Federal R&D spending. The 2007 Budget requests $60 billion for FS&T.

                       Multi-Agency R&D Priorities

  The 2007 Budget targets important research investments that must be 
coordinated across multiple agencies. Three of these multi-agency 
initiatives--nanotechnology, information technology R&D, and climate 
change science--are coordinated by three separate dedicated offices to 
ensure unified strategic planning and implementation. The Administration 
is strengthening interagency coordination for other priority areas--such 
as improving cybersecurity. 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: Significant advances in securing the homeland 
and winning the war on terror have been made over the past few years 
through the focused application of the Nation's science and technology 
capability. Challenges remain, however, a number of which are being 
addressed through multi-agency research efforts that are coordinated 
through the National Science and Technology Council (NSTC) and other 
inter-agency fora.
  In 2005, multi-agency R&D funding efforts made significant progress 
towards increasing the security of the homeland. A key example is the 
formation of the Domestic Nuclear Detection Office (DNDO). DNDO has the 
primary responsibility for developing a comprehensive system to detect 
and mitigate any attempt to illicitly import, assemble or transport a 
nuclear explosive device or its components into the U.S. To accomplish 
this mission, DNDO coordinates and draws upon the R&D expertise of key 
departments and agencies. An interagency group led by the Office of 
Science and Technology Policy has continued to support these and other 
related efforts by generating a long-term nuclear secu

[[Page 47]]

rity R&D vision and roadmap. In another example, interagency research 
programs such as the Face Recognition Grand Challenge are advancing core 
biometrics technologies and enhancing our understanding of the critical 
nexus between technical and privacy considerations.
  The 2007 Budget provides continued support for these and many other 
homeland security related research areas, including R&D aimed at: 
finding and applying quick and cost-effective decontamination 
capabilities following a biological, chemical, nuclear or radiological 
incident; strengthening predictive modeling capabilities to augment our 
ability to assess the rate of geographic spread of infectious diseases 
or chemical agents or predict the impact of key policy decisions on 
factors affecting disease transmission; enhancing the safety of the 
Nation's food supply and agricultural systems through research directed 
at the epidemiology and ecology of emerging plant and animal diseases, 
and the development of more effective vaccine and diagnostic 
technologies; and enhancing cyber security through the Networking and 
Information Technology R&D program.
  Networking and Information Technology R&D: The Budget provides $3 
billion for the multi-agency Networking and Information Technology 
Research and Development (NITRD) Program, which plans and coordinates 
agency research efforts in high-end computing systems, large-scale 
networking, software development, high-confidence systems, information 
management, cyber security, and other information technologies. The 
agencies involved in this program coordinate efforts to accelerate 
research advancement in information technology, upon which every 
economic sector now depends.
  In 2005, agencies participating in high-end computing R&D continued to 
make significant progress in implementing the recommendations contained 
in the Federal Plan for High-End Computing. The 2007 Budget provides for 
substantially increased activities in Leadership Class Computing by both 
DOE and NSF, one of the priorities contained in the Federal Plan. 
Relevant agencies will continue to conduct research in scalable systems 
software and applications to ensure that Federal investments in high-end 
computing achieve maximal impact.
  Participating agencies will broaden their R&D activities in cyber 
security and information assurance, continuing to emphasize interagency 
coordination. For example, the Interagency Working Group (IWG) that 
coordinates R&D on information technology infrastructure protection was 
incorporated as part of the NITRD program in 2005, strengthening the 
connection between cyber security R&D and overall infrastructure 
protection. After completion of the Federal Plan for Cyber Security and 
Information Assurance R&D, the IWG will develop a roadmap for addressing 
any identified R&D gaps. Reports and general information about NITRD are 
available at www.nitrd.gov/.
  Nanotechnology R&D: The Budget provides $1 billion for the multi-
agency National Nanotechnology Initiative (NNI). The NNI focuses on R&D 
that creates 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 are 
already leading to breakthroughs in disease detection and treatment, 
manufacturing at the nanoscale level, environmental monitoring and 
protection, energy production and storage, and creating electronic 
devices that have even greater capabilities than those available today.
  Guided by the NNI, participating agencies 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, agencies continue 
to maintain a focus on the responsible development of nanotechnology, 
with attention to the human and environmental health impacts, as well as 
ethical, legal, and other societal issues. Reports and general 
information about the NNI are available at www.nano.gov/.
  Climate Change R&D: The 2007 Budget for the Climate Change Science 
Program (CCSP) continues to support the implementation of the CCSP 
Strategic Plan, which was released in July 2003. The 13 departments and 
agencies that participate in CCSP coordinate preparation of the budget 
and program implementation. During 2007, CCSP will continue research 
into important scientific uncertainties and preparation of a series of 
Synthesis and Assessment reports. The program expects to receive input 
from the National Research Council under the terms of a continuing 
advisory agreement. CCSP will continue to track deliverables and 
milestones for each of its programs in order to assess overall 
performance. Additional detail on individual agency activities will be 
provided in the Administration's 2007 edition of Our Changing Planet. 
Reports and general information about CCSP are available on the 
program's website: www.climatescience.gov/.
  The Climate Change Technology Program (CCTP) continues to provide 
strategic direction and planning to help coordinate and prioritize 
activities within the portfolio of Federally funded climate change 
technology R&D consistent with the President's National Climate Change 
Technology Initiative (NCCTI). In 2005, the CCTP published a Vision and 
Framework for Strategy and Planning and released a draft Strategic Plan 
for review by the scientific community and the public. In 2006, the CCTP 
will address the nearly 300 comments received and publish a final 
Strategic Plan. The CCTP has also identified within its portfolio a 
subset of NCCTI priority activities, defined as discrete R&D activities 
that address technological challenges, which, if solved, could advance 
technologies with the potential to dramatically reduce, avoid, or 
sequester greenhouse gas emissions. Reports and general information 
about the CCTP are available on the program's website: 
www.climatetechnology.gov/.

[[Page 48]]

  The CCSP and CCTP will coordinate implementation of relevant climate 
change provisions in the 2005 Energy Policy Act as appropriate.
  Hydrogen R&D: In 2005, the Hydrogen R&D Interagency Task Force led 
interagency coordination in hydrogen-related manufacturing and 
innovation, safety, codes and standards, and fundamental research on 
fuel cells, hydrogen production, and hydrogen storage. The Task Force 
established a web portal (www.hydrogen.gov) for hydrogen and fuel cell 
information. Additionally, the Task Force works with the International 
Partnership for the Hydrogen Economy, which coordinates hydrogen 
research among 15 nations representing two thirds of global energy 
consumption.
  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 includes a 54-percent 
increase in targeted basic research investments in 2007, 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. To keep FreedomCAR on track, it will be 
essential that Congress refrain from earkmarking this program.

                     Stimulating Private Investment

  Along with direct spending on R&D, the Federal Government has sought 
to stimulate private R&D investment through incentives in the Internal 
Revenue Code. A long-standing credit that expired at the end of 2005 
provided a 20-percent tax credit for private research and 
experimentation expenditures above a certain base amount. The 
Administration proposes extending the Research and Experimentation tax 
credit starting 2006 and making it permanent. The proposed extension 
will cost $33.4 billion over the period from 2007 to 2011. 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 tax depreciation allowance.

                          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 the Office of Management and Budget 
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.
  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 5-1 shows 
agency-by-agency spending on basic and applied research, development, 
and R&D equipment and facilities.

[[Page 49]]



                                                      Table 5-1.  FEDERAL RESEARCH AND DEVELOPMENT
                                                     (Budget authority, dollar amounts in millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                               Dollar         Percent
                                                                                          2005        2006         2007        Change:     Change:  2006
                                                                                         Actual     Estimate     Proposed   2006 to 2007      to 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
By Agency
  Defense............................................................................     69,743       71,946       74,234         2,288              3%
  Health and Human Services..........................................................     28,687       28,767       28,737           -30              0%
  NASA...............................................................................     10,197       11,394       12,245           851              7%
  Energy.............................................................................      8,596        8,563        9,158           595              7%
  National Science Foundation........................................................      4,138        4,199        4,548           349              8%
  Agriculture........................................................................      2,410        2,411        2,012          -399            -17%
  Homeland Security..................................................................      1,182        1,484        1,508            24              2%
  Commerce...........................................................................      1,133        1,079        1,065           -14             -1%
  Veteran Affairs....................................................................        742          765          765  ............  ..............
  Interior...........................................................................        622          637          600           -37             -6%
  Transportation.....................................................................        549          704          557          -147            -21%
  Environmental Protection Agency....................................................        640          600          557           -43             -7%
  Other..............................................................................      1,235        1,232        1,218           -14             -1%
                                                                                      ------------------------------------------------------------------
    Total............................................................................    129,874      133,781      137,204         3,423              3%
 
Basic Research
  Defense............................................................................      1,485        1,470        1,422           -48             -3%
  Health and Human Services..........................................................     15,752       15,996       16,037            41              0%
  NASA...............................................................................      2,386        2,305        2,226           -79             -3%
  Energy.............................................................................      2,937        2,987        3,315           328             11%
  National Science Foundation........................................................      3,427        3,478        3,687           209              6%
  Agriculture........................................................................        838          846          771           -75             -9%
  Homeland Security..................................................................         55           95           49           -46            -48%
  Commerce...........................................................................         53           56           87            31             55%
  Veteran Affairs....................................................................        297          306          306  ............  ..............
  Interior...........................................................................         36           42           40            -2             -5%
  Transportation.....................................................................         33           39           39  ............  ..............
  Environmental Protection Agency....................................................        110          101           94            -7             -7%
  Other..............................................................................        155          169          174             5              3%
                                                                                      ------------------------------------------------------------------
    Subtotal.........................................................................     27,564       27,890       28,247           357              1%
 
Applied Research
  Defense............................................................................      4,787        5,169        4,478          -691            -13%
  Health and Human Services..........................................................     12,573       12,605       12,540           -65             -1%
  NASA...............................................................................      1,957        1,759        1,118          -641            -36%
  Energy.............................................................................      2,770        2,730        2,723            -7              0%
  National Science Foundation........................................................        332          319          379            60             19%
  Agriculture........................................................................      1,124        1,157          974          -183            -16%
  Homeland Security..................................................................        842        1,093          943          -150            -14%
  Commerce...........................................................................        813          779          769           -10             -1%
  Veteran Affairs....................................................................        401          414          414  ............  ..............
  Interior...........................................................................        533          545          510           -35             -6%
  Transportation.....................................................................        304          392          305           -87            -22%
  Environmental Protection Agency....................................................        415          387          359           -28             -7%
  Other..............................................................................        587          591          594             3              1%
                                                                                      ------------------------------------------------------------------
    Subtotal.........................................................................     27,438       27,940       26,106        -1,834             -7%
 
Development
  Defense............................................................................     63,336       65,221       68,315         3,094              5%
  Health and Human Services..........................................................         57           37           37  ............  ..............
  NASA...............................................................................      3,494        5,174        6,755         1,581             31%
  Energy.............................................................................      1,759        1,804        1,990           186             10%
  National Science Foundation........................................................  .........  ...........  ...........  ............             N/A
  Agriculture........................................................................        156          164          155            -9             -5%
  Homeland Security..................................................................        133          195          335           140             72%
  Commerce...........................................................................        148          118           94           -24            -20%
  Veteran Affairs....................................................................         44           45           45  ............  ..............
  Interior...........................................................................         50           47           47  ............  ..............
  Transportation.....................................................................        194          255          194           -61            -24%
  Environmental Protection Agency....................................................        115          112          104            -8             -7%
  Other..............................................................................        461          424          409           -15             -4%
                                                                                      ------------------------------------------------------------------
    Subtotal.........................................................................     69,947       73,596       78,480         4,884              7%
 
Facilities and Equipment
  Defense............................................................................        135           86           19           -67            -78%
  Health and Human Services..........................................................        305          129          123            -6             -5%

[[Page 50]]

 
  NASA...............................................................................      2,360        2,156        2,146           -10              0%
  Energy.............................................................................      1,130        1,042        1,130            88              8%
  National Science Foundation........................................................        379          402          482            80             20%
  Agriculture........................................................................        292          244          112          -132            -54%
  Homeland Security..................................................................        152          101          181            80             79%
  Commerce...........................................................................        119          126          115           -11             -9%
  Transportation.....................................................................  .........  ...........  ...........  ............             N/A
  Veterans Affairs...................................................................          3            3            3  ............             N/A
  Interior...........................................................................         18           18           19             1              6%
  Environmental Protection Agency....................................................  .........  ...........  ...........  ............             N/A
  Other..............................................................................         32           48           41            -7            -15%
                                                                                      ------------------------------------------------------------------
    Subtotal.........................................................................      4,925        4,355        4,371            16              0%
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 51]]


                                Table 5-2.  FEDERAL SCIENCE AND TECHNOLOGY BUDGET
                                 (Budget authority, dollar amounts in millions)
----------------------------------------------------------------------------------------------------------------
                                                                                          Dollar
                                                       2005       2006        2007       Change:       Percent
                                                      Actual    Estimate    Proposed     2006 to       Change:
                                                                                           2007     2006 to 2007
----------------------------------------------------------------------------------------------------------------
By Agency
National Institutes of Health \1\.................     28,444     28,410       28,428           18            0%
NASA..............................................      8,128      7,680        7,073         -607           -8%
  Science.........................................      5,502      5,254        5,330           76            1%
  Aeronautics.....................................        962        884          724         -160          -18%
  Exploration Systems \2\.........................      1,664      1,542        1,019         -523          -34%
Energy \3\........................................      5,642      5,636        6,155          519            9%
  Science Programs................................      3,600      3,596        4,102          506           14%
  Electricity Transmission & Distribution.........        101        136           96          -40          -29%
  Nuclear Energy..................................        393        416          559          143           34%
  Energy Efficiency and Renewable Energy Resources        976        896          933           37            4%
   \4\............................................
  Fossil Energy \5\...............................        572        592          465         -127          -21%
National Science Foundation.......................      5,472      5,581        6,020          439            8%
Defense...........................................      6,273      6,628        5,900         -728          -11%
  Basic Research..................................      1,485      1,470        1,422          -48           -3%
  Applied Research................................      4,788      5,158        4,478         -680          -13%
Agriculture.......................................      2,111      2,160        1,921         -239          -11%
  CSREES Research and Education \6\...............        659        675          569         -106          -16%
  Economic Research Service.......................         74         75           83            8           11%
  Agricultural Research Service \7\...............      1,102      1,131        1,001         -130          -11%
  Forest Service: Forest and Rangeland Research...        276        279          268          -11           -4%
Interior (USGS)...................................        935        962          945          -17           -2%
Commerce..........................................        855        938          873          -65           -7%
  NOAA: Oceanic & Atmospheric Research............        404        370          338          -32           -9%
  NIST Intramural Research and Facilities.........        451        568          535          -33           -6%
Environmental Protection Agency \8\...............        780        761          816           55            7%
Veterans Affairs \9\..............................        743        765          765  ...........  ............
Transportation....................................        542        567          598           31            5%
  Highway research: Federal Highway Administration        411        430          468           38            9%
  Federal Aviation Administration: Research,              131        137          130           -7           -5%
   Engineering, and Development...................
Education.........................................        355        342          342  ...........  ............
  Special Education Research and Innovation.......         83         72           72  ...........  ............
  National Institute on Disability and                    108        107          107  ...........  ............
   Rehabilitation Research........................
  Research, Development, and Dissemination \10\...        164        163          163  ...........  ............
                                                   -------------------------------------------------------------
Total.............................................     60,280     60,430       59,836         -594           -1%
----------------------------------------------------------------------------------------------------------------
\1\ In 2006, the Department of Health and Human Services will allocate an additional $18 million to NIH for
  Pandemic Influenza research from the Department of Defense Emergency Supplemental Appropriations to Address
  Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006.
\2\ Includes Exploration Systems Research and Technology, Human Systems Research and Technology, Innovative
  Partnerships, and Prometheus Nuclear Systems and Technology.
\3\ Data do not reflect actual transfers to Science Programs from other Department of Energy R&D programs to
  support the Small Business Innovation Research and the Small Business Technology Transfer programs.
\4\ In 2006, Congress merged the Energy Supply and Energy Conservation accounts. The amount reported under the
  new Energy Efficiency and Renewable Energy Resources line within this account reflects a combination of the
  former Energy Conservation line item (excluding Weatherization and State grants) and the Renewables line item.
\5\ Excludes funding for the Alaska Natural Gas Pipeline project.
\6\ Includes the appropriation of earnings from the Native American Endowment Fund, but not the appropriation to
  the Endowment's principal.
\7\ Excludes building and facilities. Also excludes the transfer of $6 million from the account.
\8\ Science and Technology, plus superfund transfer.
\9\ Includes the medical care and prosthetic research appropriation and VA medical care support transfer to
  research.
\10\ Does not include funding for Regional Educational Labs.


[[Page 52]]


                                              Table 5-3.  AGENCY DETAIL OF SELECTED INTERAGENCY R&D EFFORTS
                                                     (Budget authority, dollar amounts in millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                               Dollar         Percent
                                                                                          2005        2006         2007        Change:     Change:  2006
                                                                                         Actual     Estimate     Proposed   2006 to 2007      to 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
Networking and Information Technology R&D
  Defense \1\........................................................................        775        1,128        1,018          -110            -10%
  National Science Foundation........................................................        811          810          904            94             12%
  Health and Human Services \2\......................................................        571          551          541           -10             -2%
  Energy.............................................................................        377          384          473            89             23%
  National Aeronautics and Space Administration......................................        163           78           82             4              5%
  Commerce...........................................................................         60           60           65             5              8%
  Environmental Protection Agency....................................................          4            6            6  ............  ..............
                                                                                      ------------------------------------------------------------------
    Total............................................................................      2,761        3,017        3,089            72              2%
 
National Nanotechnology Initiative
  National Science Foundation........................................................        335          344          373            29              8%
  Defense \1\........................................................................        352          435          345           -90            -21%
  Energy.............................................................................        208          207          258            51             25%
  Health and Human Services \3\......................................................        168          175          173            -2             -1%
  Commerce (NIST)....................................................................         79           76           86            10             13%
  National Aeronautics and Space Administration......................................         45           50           25           -25            -50%
  Environmental Protection Agency....................................................          7            5            9             4             80%
  Agriculture........................................................................          3            5            5  ............  ..............
  Justice............................................................................          2            1            1             0              0%
  Homeland Security..................................................................          1            1  ...........            -1           -100%
                                                                                      ------------------------------------------------------------------
    Total............................................................................      1,200        1,299        1,275           -24             -2%
 
Climate Change Science Program
  National Aeronautics and Space Administration......................................      1,237        1,043        1,025           -18             -2%
  National Science Foundation........................................................        198          197          205             8              4%
  Commerce (NOAA)....................................................................        124          163          186            23             14%
  Energy.............................................................................        127          131          126            -5             -4%
  Agriculture........................................................................         62           62           61            -1             -2%
  National Institutes of Health......................................................         57           57           57  ............  ..............
  Interior (USGS)....................................................................         27           27           26            -1             -4%
  Environmental Protection Agency....................................................         20           19           17            -2            -11%
  Smithsonian........................................................................          6            6            6  ............  ..............
  U.S. Agency for International Development..........................................          6            6            6  ............  ..............
  Transportation.....................................................................          3            2            2  ............  ..............
  State..............................................................................          1  ...........  ...........  ............  ..............
                                                                                      ------------------------------------------------------------------
    Total............................................................................      1,868        1,713        1,717             4              0%
                                                                                      ------------------------------------------------------------------
    Subtotal, CCRI (included in CCSP total)..........................................        211          200          200             0              0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ In 2005, DOD reviewed its contributions to NITRD and NNI and produced a more comprehensive and accurate accounting of the Department's funding of
  those activities. Accordingly, the funding levels shown in this table are larger than those shown in previous years.
\2\ Includes funds from offsetting collections for the Agency for Healthcare Research and Quality.
\3\ Includes funds from both the National Institutes of Health and National Institute of Occupational Safety and Health.