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

    [[Page 45]]

                           5. RESEARCH AND DEVELOPMENT

      The U.S. economy is the largest in the world, and has been growing
    faster than any other G-7 industrialized nation. In large measure, the
    U.S. economy owes its strength 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 improve our understanding of the
    world. Economists estimate that as much as half of post-World War II
    economic growth is directly due to technological progress fueled by
    research and development (R&D).
      Economic payoffs from 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.
      To sustain the Nation's economic competitiveness, the President, in
    last year's State of the Union address, called for a long-term vision to
    strengthen Federal support for the Nation's innovation enterprise in an
    integrated package of investments and policies called the American
    Competitiveness Initiative (ACI).

                   I.  THE AMERICAN COMPETITIVENESS INITIATIVE

      The President's 2008 Budget maintains a strong commitment, through the
    ACI, to invest in basic research areas that advance knowledge and
    technologies used by scientists in nearly every field. Through the ACI,
    the President 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 2008, the second year of the American Competitiveness Initiative,
    President Bush proposes $11.4 billion total for NSF, DOE's Office of
    Science, and NIST laboratories, an overall funding increase of $764
    million, or 7.2 percent, above his 2007 Budget of $10.7 billion. To
    reach doubling within ten years, overall annual increases will average
    roughly seven percent.

    [[Page 46]]

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

                              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 basic research in areas such as nanotechnology, advanced networking and information technology,
     physics, chemistry, materials science, mathematics, and engineering. It also is well regarded for funding
     nearly all of its research through a competitive, peer-reviewed process. The increase in NSF funding will
     support many more 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. The 2008 Budget increases funding for both research
     and cutting edge facilities in these critical mission areas, such as an expansion in the number of bio-energy
     research centers, major growth in the United States' contribution to the international fusion energy project
     known as ITER, expanded supercomputing facilities and related research, and design or construction activities
     for world-leading next generation light sources.

    The Department of Commerce's National Institute of Standards and Technology invests in technological innovation
     through research and standards development. These investments will improve nanotechnology manufacturing
     capabilities; expand NIST's neutron facility to aid in characterizing novel materials in high-growth research
     fields; construct new, high-performance laboratories at NIST's Boulder, Colorado facility; and improve our
     understanding of quantum information science that has the potential to dramatically improve computer processing
     speeds and enable more secure communications.

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

                 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.
      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 five years, agencies completed 977 PART
    assessments, of which 121 were for R&D programs. The results of these
    PART assessments may be found on the web at www.expectmore.gov.

    [[Page 47]]

      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. While
    programs rated Effective are typically favored for additional funding
    over related programs that do not perform as well, PART ratings do not
    automatically relate to specific funding levels. For instance, a program
    rated Effective that has achieved what it set out to do may have its
    funding reduced. On the other hand, a program rated Ineffective might
    receive more money to correct a deficiency that would help it become
    more effective. The PART provides information that leads to more
    informed decisions.

                                Research Earmarks

      President Bush has called on Congress to reform the earmark process,
    proposing a series of reforms that include full disclosure for each
    earmark and cutting the number and cost of all earmarks by at least
    half. Consistent with this effort, the Administration is continuing its
    strong support for awarding research funds based on merit review through
    a competitive process refereed by scientists themselves. 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. 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. For example, the Defense Advanced Research Projects Agency,
    within the Department of Defense (DOD), seeks out high-risk, high-payoff
    scientific proposals, the National Institutes of Health has established
    a similarly focused ``Pioneer Award,'' 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 diabetes, neurofibromatosis (a genetic disorder of
    the nervous system), and childhood cancer. Congressional adds in DOD's
    budget for medical research projects totals about $500 million in 2007
    alone.

    [[Page 48]]

    While research on these diseases is very important, these diseases are
    generally not unique to the U.S. military and the research 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 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 an approach that should be followed
    throughout the R&D programs.

              III. PRIORITIES FOR FEDERAL RESEARCH AND DEVELOPMENT

      The 2008 Budget requests $143 billion for Federal R&D funding, and
    targets key research investments within agencies, in particular, the
    three ACI agencies: NSF, the DOE's Office of Science, and the NIST
    laboratories. (Table 5-1 provides details by agency).

                           Multi-Agency R&D Priorities

      The 2008 Budget continues to target important research investments
    that must be coordinated across multiple agencies. 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: A robust R&D effort continues to be a key
    asset in advancing technologies in support of the President's national
    strategy for homeland security. Though there have been numerous
    achievements over the past four years, many challenges remain. A number
    of these challenges are being addressed through multi-agency research
    efforts that are coordinated through the National Science and Technology
    Council (NSTC) and other inter-agency forums.
      In 2006, key multi-agency R&D efforts made significant progress
    towards improving the Nation's counterterrorism capability. Using the
    2006 Administration R&D budget priorities memorandum as a guide,
    agencies, for example:
        improved radiation portal monitors with the ability to
              discern threatening sources of radiation from non-threatening
              sources;
        advanced technology to meet new international electronic
              passport standards that enables biometric screening of
              individuals entering the country;
        developed standards for technologies that enable the
              detection and interception of nuclear and radioactive material
              before it enters the U.S.;
        developed and established standard methodologies and
              practices for the sampling and detection of biological agents;
              and
        developed rapid diagnostics and next generation vaccines.
      The 2008 Budget provides continued support for these and many other
    R&D related to combating terrorism, including: pursuing stand-off
    detection and imaging capabilities to locate and identify nuclear threat
    materials at a distance; advancing cargo screening capabilities to
    recognize and expedite safe cargo while securing the borders against
    other entries; improving the capabilities and implementation planning of
    biometric systems; initiating the 2008-2012 R&D plan for high-
    consequence foreign animal diseases; and focusing on critical medical
    countermeasures that do not have a pre-existing market to stimulate
    their development.
      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, cyber security,
    large-scale networking, software development, high-confidence systems,
    information management, 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 2006, 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 2008 Budget continues
    the path toward the development of petascale systems for science by both
    DOE and NSF. Relevant agencies will continue to conduct research in
    highly scalable systems software and applications to ensure that Federal
    investments in high-end computing achieve maximal impact.
      Participating agencies also completed and published the Federal Plan
    for Cyber Security and Information Assurance R&D in 2006, and are now
    undertaking the development of the roadmap for addressing any identified
    R&D gaps as recommended in the Plan.
      In 2007, participating agencies will undertake the development of a
    Federal Plan for Advanced Networking R&D, analogous to the recent Plans
    for High-End Computing and for Cyber Security and Information Assurance
    R&D. The Federal Plan for Advanced Networking R&D will provide a
    strategy for addressing current and future networking needs of the
    Federal government in support of science and national security missions,
    and provide a process for developing a more detailed roadmap to guide
    future multi-agency investments in advancing networking R&D. Reports and
    general information about NITRD are available at www.nitrd.gov/.

    [[Page 49]]

      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.
    Research opportunities cover a similarly broad spectrum. Advances that
    will be foundational for all aspects of nanotechnology R&D in particular
    include: instrumentation for characterizing nanoscale materials in the
    laboratory, in the body, and in the environment; and computational
    research to model and predict properties at the nanoscale, for designing
    novel materials, and for determining their behavior under various
    conditions and environments.
      Guided by the NNI, participating agencies will continue to support
    discovery, development and application of nanotechnology through
    investigator-led fundamental and applied research; multidisciplinary
    centers of excellence; education and training of nanotechnology
    researchers, teachers, workers, and the public; and infrastructure
    development, including user facilities and networks that are broadly
    available to support research and innovation. 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 2008 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 the CCSP coordinate preparation of the
    budget and program implementation. During 2008, the CCSP will continue
    research into important scientific uncertainties and preparation of a
    series of Synthesis and Assessment reports. Working within the
    overarching priorities defined in the Strategic Plan, the CCSP's
    interagency coordination and integration efforts will give particular
    emphasis in 2008 to the following activities: abrupt climate change;
    integrated Earth system analysis; coping with drought through research
    and regional partnerships; integration of water cycle observations,
    research and modeling; carbon cycle research integration; aerosol
    forcing and interactions with clouds and non-carbon dioxide trace gases;
    impacts of climate variability and change on ecosystem productivity and
    biodiversity; and interactions on land use/land cover change and
    climate.
      The program expects to receive input from the National Research
    Council under the terms of a continuing advisory agreement. This advice
    will include findings and recommendations on the process for evaluating
    progress toward the five goals in the CCSP Strategic Plan, and a
    preliminary assessment of progress made toward the program's goals. The
    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
    2008 edition of Our Changing Planet. Reports and general information
    about the CCSP are available on the program's website:
    www.climatescience.gov/.
      The Climate Change Technology Program (CCTP) continues to provide
    strategic direction, planning, and analysis 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 addressed the nearly 300 comments received and published
    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. In 2008, CCTP's focus will
    be on implementing the Strategic Plan, which lays out a series of next
    steps. Reports and general information about the CCTP are available on
    the program's website: www.climatetechnology.gov/.
      The CCSP and CCTP will continue to coordinate implementation of
    relevant climate change provisions in the 2005 Energy Policy Act as
    appropriate.
      Ocean Research: The 2008 Budget supports ocean and coastal research as
    outlined in the recently released report Charting the Course for Ocean
    Science in the United States for the Next Decade: An Ocean Research
    Priorities Plan and Implementation Strategy. Developed by the National
    Science and Technology Council's Joint Subcommittee on Ocean Science and
    Technology, plan implementation will deploy key components of an ocean
    observing system that can better and more accurately describe actual
    conditions, enhance our understanding and capability to forecast ocean
    processes and phenomena, and provide scientific support for ecosystem-
    based management. These three overarching goals represent tremendous
    potential for ocean science, as well as for maintaining U.S. leadership
    in ocean technology and enhancing U.S. competitiveness. These goals are
    supported by 20 separate national ocean research priorities, established
    with extensive community input and oriented around the most compelling
    issues of interaction between society and the ocean. The Joint
    Subcommittee on Ocean Science and Technology will coordinate this multi-
    agency research into key aspects of the oceans, coasts and Great Lakes
    and work closely with the other coordinating bodies of the President's
    Ocean Action Plan.
      Hydrogen R&D: In 2006, the Hydrogen R&D Interagency Task Force led
    coordination among nine agen

    [[Page 50]]

    cies in hydrogen-related manufacturing and innovation, safety, codes and
    standards, and fundamental research on fuel cells, hydrogen production,
    and hydrogen storage. The Task Force improved and updated its 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 to lead the President's Hydrogen Fuel Initiative to
    accelerate the worldwide availability and affordability of hydrogen-
    powered fuel cell vehicles and the infrastructure to support them. The
    initiative focuses on research to advance hydrogen production, storage,
    conversion, and infrastructure technologies. The 2008 Budget completes
    the President's five-year, $1.2 billion commitment announced in his 2003
    State of the Union address, but work will continue on the many technical
    challenges that remain.
      Biomass R&D: The Biomass R&D Act of 2000 established the Biomass R&D
    Board to guide interagency coordination and bring coherence to Federal
    strategic planning on biomass-related issues. Since 2002, the
    Departments of Agriculture and Energy have been preparing joint annual
    reports on a subset of coordinated biomass activities. In 2006, the
    Board began preparation of an interagency coordination and planning
    document that will be reviewed by the National Academy of Sciences. In
    addition to assessing the goals and plans for interagency biomass
    research, the Academy will be tasked with considering economic and other
    impacts of increased biomass utilization under various energy price and
    policy scenarios. Additional information on the Biomass R&D Board is
    available online at www.biomass.govtools.us.

                         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, which had provided a 20-percent
    tax credit for private research and experimentation expenditures above a
    certain base amount, was extended for two years through the end of 2007
    and enhanced through the Tax Relief and Health Care Act of 2006. The
    Administration proposes making the enhanced Research and Experimentation
    tax credit permanent starting in 2008. The proposed extension will cost
    $42 billion over the period from 2008 to 2012. 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 systematic study directed toward a fuller knowledge
    or understanding of the fundamental aspects of phenomena and of
    observable facts without specific applications towards processes or
    products in mind. Basic research, however, may include activities with
    broad applications 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 or understanding,
    directed 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, research
    satellites, detectors, and other instruments. At a minimum, this
    category should include programs devoted to the purchase or construction
    of R&D equipment.
      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.
      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 the overall R&D data. 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 2008 Budget requests $61 billion for FS&T.

    [[Page 51]]

                                                          Table 5-1.  FEDERAL RESEARCH AND DEVELOPMENT
                                                         (Budget authority, dollar amounts in millions)
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   Dollar         Percent
                                                                                              2006        2007         2008        Change:     Change:  2007
                                                                                             Actual     Estimate     Proposed   2007 to 2008      to 2008
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    By Agency
      Defense............................................................................     73,723       77,881       78,862           981              1%
      Health and Human Services..........................................................     28,531       28,743       29,027           284              1%
      NASA...............................................................................     11,317       11,613       12,428           815              7%
      Energy.............................................................................      8,596        8,389        9,224           835             10%
      National Science Foundation........................................................      4,227        4,232        4,880           648             15%
      Agriculture........................................................................      2,438        2,316        2,010          -306            -13%
      Commerce...........................................................................      1,090          920        1,088           168             18%
      Homeland Security..................................................................      1,455        1,079        1,068           -11             -1%
      Veteran Affairs....................................................................        824          818          822             4              0%
      Transportation.....................................................................        820          752          812            60              8%
      Interior...........................................................................        639          636          621           -15             -2%
      Environmental Protection Agency....................................................        622          567          562            -5             -1%
      Other..............................................................................      1,250        1,223        1,251            28              2%
                                                                                          ------------------------------------------------------------------
      Total..............................................................................    135,532      139,169      142,655         3,486              3%

    Basic Research
      Defense............................................................................      1,457        1,565        1,428          -137             -9%
      Health and Human Services..........................................................     15,546       15,545       15,615            70              0%
      NASA...............................................................................      2,299        2,259        2,226           -33             -1%
      Energy.............................................................................      2,930        2,957        3,409           452             15%
      National Science Foundation........................................................      3,520        3,499        3,993           494             14%
      Agriculture........................................................................        853          799          771           -28             -4%
      Commerce...........................................................................        118          118          164            46             39%
      Homeland Security..................................................................         85          105          132            27             26%
      Veteran Affairs....................................................................        343          328          330             2              1%
      Transportation.....................................................................  .........  ...........  ...........  ............             N/A
      Interior...........................................................................         42           42           39            -3             -7%
      Environmental Protection Agency....................................................        105           94           94  ............  ..............
      Other..............................................................................        158          163          170             7              4%
                                                                                          ------------------------------------------------------------------
        Subtotal.........................................................................     27,456       27,474       28,371           897              3%

    Applied Research
      Defense............................................................................      4,948        5,330        4,357          -973            -18%
      Health and Human Services..........................................................     12,827       12,964       13,237           273              2%
      NASA...............................................................................      1,680        1,010        1,127           117             12%
      Energy.............................................................................      2,700        2,707        2,869           162              6%
      National Science Foundation........................................................        286          281          380            99             35%
      Agriculture........................................................................      1,149        1,117          984          -133            -12%
      Commerce...........................................................................        729          617          696            79             13%
      Homeland Security..................................................................        662          518          533            15              3%
      Veteran Affairs....................................................................        435          442          444             2              0%
      Transportation.....................................................................        497          501          541            40              8%
      Interior...........................................................................        546          534          525            -9             -2%
      Environmental Protection Agency....................................................        400          369          364            -5             -1%
      Other..............................................................................        590          549          581            32              6%
                                                                                          ------------------------------------------------------------------
        Subtotal.........................................................................     27,449       26,939       26,638          -301             -1%

    Development
      Defense............................................................................     67,154       70,926       72,873         1,947              3%
      Health and Human Services..........................................................         22           22           22  ............  ..............
      NASA...............................................................................      5,141        6,451        6,707           256              4%
      Energy.............................................................................      1,939        1,843        1,891            48              3%
      National Science Foundation........................................................  .........  ...........  ...........  ............             N/A
      Agriculture........................................................................        164          158          156            -2             -1%
      Commerce...........................................................................         93           55           72            17             31%
      Homeland Security..................................................................        659          325          269           -56            -17%
      Veteran Affairs....................................................................         46           48           48  ............  ..............
      Transportation.....................................................................        305          232          252            20              9%
      Interior...........................................................................         46           53           55             2              4%
      Environmental Protection Agency....................................................        117          104          104  ............  ..............
      Other..............................................................................        464          455          454            -1              0%
                                                                                          ------------------------------------------------------------------
        Subtotal.........................................................................     76,150       80,672       82,903         2,231              3%

    Facilities and Equipment
      Defense............................................................................        164           60          204           144            240%
      Health and Human Services..........................................................        136          212          153           -59            -28%

    [[Page 52]]

      NASA...............................................................................      2,197        1,893        2,368           475             25%
      Energy.............................................................................      1,027          882        1,055           173             20%
      National Science Foundation........................................................        421          452          507            55             12%
      Agriculture........................................................................        272          242           99          -143            -59%
      Commerce...........................................................................        150          130          156            26             20%
      Homeland Security..................................................................         49          131          134             3              2%
      Veteran Affairs....................................................................  .........  ...........  ...........  ............             N/A
      Transportation.....................................................................         18           19           19  ............             N/A
      Interior...........................................................................          5            7            2            -5            -71%
      Environmental Protection Agency....................................................  .........  ...........  ...........  ............             N/A
      Other..............................................................................         38           56           46           -10            -18%
                                                                                          ------------------------------------------------------------------
        Subtotal.........................................................................      4,477        4,084        4,743           659             16%
    --------------------------------------------------------------------------------------------------------------------------------------------------------

    [[Page 53]]

                                    Table 5-2.  FEDERAL SCIENCE AND TECHNOLOGY BUDGET
                                     (Budget authority, dollar amounts in millions)
    ----------------------------------------------------------------------------------------------------------------
                                                                                                  Dollar    Percent
                                                               2006        2007         2008     Change:    Change:
                                                              Actual   Estimate \1\   Proposed   2007 to    2007 to
                                                                                                   2008       2008
    ----------------------------------------------------------------------------------------------------------------
    By Agency

    National Institutes of Health \2\.....................     28,242       28,269      28,700        431         2%

    NASA \3\..............................................      7,670        7,173       7,124        -49        -1%
      Science.............................................      5,110        5,330       5,516        186         3%
      Aeronautics.........................................        893          724         554       -170       -23%
      Exploration Systems \4\.............................      1,452          921         856        -65        -7%
      Innovative Partnerships.............................        215          198         198  .........  .........

    Energy \5\............................................      5,625        6,186       6,906        720        12%
      Science Programs....................................      3,596        4,102       4,398        296         7%
      Electricity Transmission & Distribution.............        136           96          86        -10       -10%
      Nuclear Energy......................................        416          560         811        251        45%
      Energy Efficiency and Renewable Energy Resources \6\        896          963       1,047         84         9%
      Fossil Energy R&D \7\...............................        581          465         564         99        21%

    National Science Foundation...........................      5,581        6,020       6,429        409         7%

    Defense...............................................      6,405        6,895       5,785     -1,110       -16%
      Basic Research......................................      1,457        1,565       1,428       -137        -9%
      Applied Research....................................      4,948        5,330       4,357       -973       -18%

    Agriculture...........................................      2,170        1,921       1,934         13         1%
      CSREES Research and Education \8\...................        675          569         566         -3        -1%
      Economic Research Service...........................         75           83          83  .........  .........
      Agricultural Research Service \9\...................      1,141        1,001       1,022         21         2%
      Forest Service: Forest and Rangeland Research.......        279          268         263         -5        -2%

    Interior (USGS).......................................        965          945         975         30         3%

    Commerce..............................................        939          869         944         75         9%
      NOAA: Oceanic & Atmospheric Research................        369          338         358         20         6%
      NIST Intramural Research and Facilities.............        570          531         586         55        10%

    Veterans Affairs \10\.................................        769          765         822         57         7%

    Environmental Protection Agency \11\..................        761          816         781        -35        -4%

    Transportation........................................        563          598         570        -28        -5%
      Highway research: Federal Highway Administration....        426          468         430        -38        -8%
      Federal Aviation Administration: Research,                  137          130         140         10         8%
       Engineering, and Development.......................

    Education.............................................        342          342         342  .........  .........
      Special Education Research and Innovation...........         72           72          72  .........  .........
      National Institute on Disability and Rehabilitation         107          107         107  .........  .........
       Research...........................................
      Research, Development, and Dissemination \12\.......        163          163         163  .........  .........
                                                           ---------------------------------------------------------
      Total...............................................     60,032       60,799      61,312        513         1%
    ----------------------------------------------------------------------------------------------------------------
    \1\ The amounts included as 2007 Estimates in this table reflect the 2007 Budget levels, with the exception of
      the numbers for the Department of Defense, which are the enacted levels.
    \2\ In 2006, the Department of Health and Human Services allocated 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.
    \3\ Due to recent changes in NASA's approach to budgeting overhead costs, 2008 funding levels are not comparable
      to 2006 and 2007 levels.
    \4\ Includes Exploration Technology Development, the Human Research Program, and the Lunar Precursor Robotic
      Program.
    \5\ 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.
    \6\ 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.
    \7\ Excludes funding for the Alaska Natural Gas Pipeline project.
    \8\ Includes the appropriation of earnings from the Native American Endowment Fund, but not the appropriation to
      the Endowment's principal.
    \9\ Excludes building and facilities. Excludes $6 million transfer to the account in 2006.
    \10\ Includes the medical care and prosthetic research appropriation and VA medical care support transfer to
      research.
    \11\ Science and Technology, plus superfund transfer.
    \12\ Does not include funding for Regional Educational Labs.

    [[Page 54]]

                                                  Table 5-3.  AGENCY DETAIL OF SELECTED INTERAGENCY R&D EFFORTS
                                                         (Budget authority, dollar amounts in millions)
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   Dollar         Percent
                                                                                             2006        2007          2008        Change:     Change:  2007
                                                                                            Actual   Estimate \1\    Proposed   2007 to 2008      to 2008
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Networking and Information Technology R&D \2\
      Defense...........................................................................      1,106         1,046        1,027           -19             -2%
      National Science Foundation.......................................................        812           904          994            90             10%
      Health and Human Services \3\.....................................................        486           541          463           -78            -14%
      Energy............................................................................        282           389          404            15              4%
      National Aeronautics and Space Administration.....................................         78            82           85             3              4%
      Commerce..........................................................................         64            73           73  ............             N/A
      Environmental Protection Agency...................................................          6             6            6  ............             N/A
      National Archives and Records Administration......................................          4             4            5             1             25%
                                                                                         -------------------------------------------------------------------
        Total...........................................................................      2,838         3,045        3,057            12              0%

    National Nanotechnology Initiative
      National Science Foundation.......................................................        360           373          390            17              5%
      Defense...........................................................................        424           417          375           -42            -10%
      Energy............................................................................        231           293          332            39             13%
      Health and Human Services \4\.....................................................        196           175          208            33             19%
      Commerce (NIST)...................................................................         78            89           97             8              9%
      National Aeronautics and Space Administration.....................................         50            25           24            -1             -4%
      Environmental Protection Agency...................................................          5             9           10             1             11%
      Agriculture.......................................................................          6             7            8             1             14%
      Transportation....................................................................          1             1            1  ............             N/A
      Justice...........................................................................  .........             1            1  ............             N/A
      Homeland Security.................................................................          2             1            1  ............             N/A
                                                                                         -------------------------------------------------------------------
        Total...........................................................................      1,353         1,391        1,447            56              4%

    Climate Change Science Program
      National Aeronautics and Space Administration \5\.................................      1,045           981          871          -110            -11%
      National Science Foundation.......................................................        197           205          208             3              1%
      Commerce (NOAA)...................................................................        157           173          174             1              1%
      Energy............................................................................        130           126          130             4              3%
      Agriculture.......................................................................         61            60           59            -1             -2%
      National Institutes of Health.....................................................         50            57           50            -7            -12%
      Interior (USGS)...................................................................         27            26           27             1              4%
      Environmental Protection Agency...................................................         19            18           18  ............             N/A
      Smithsonian.......................................................................          6             6            6  ............             N/A
      Transportation....................................................................          1             1            1  ............             N/A
      U.S. Agency for International Development \6\.....................................         13            14  ...........           N/A             N/A
                                                                                         -------------------------------------------------------------------
        Total...........................................................................      1,706         1,667        1,544          -123             -7%
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ The amounts included as 2007 Estimates in these tables reflect the 2007 Budget levels, with the exception of the numbers for the Department of
      Defense and the Department of Homeland Security, which are the enacted levels.
    \2\ DHS NITRD funding information is not yet available.
    \3\ Includes funds from offsetting collections for the Agency for Healthcare Research and Quality.
    \4\ Includes funds from both the National Institutes of Health and National Institute of Occupational Safety and Health.
    \5\ Beginning with the 2007 Estimate, NASA is no longer counting its Ground Network and Research Range within its CCSP totals.
    \6\ USAID CCSP funding information for 2008 is not yet available.