PCAST Hears Perspectives on FY 2000 Budget

Meeting on February 22, the President’s Committee of Advisors on Science and Technology (PCAST) heard several presentations on the Administration’s FY 2000 budget request for R&D. The speakers represented different perspectives, but the message was always the same: the economic outlook is good, but budget caps on appropriations will force science to compete for funds against many other important programs.

Tom Kahn, Minority Staff Director for the House Budget Committee, set the stage. (His Republican counterpart was also invited but could not attend.) In seven years, Kahn reminded the committee, the nation has gone from “the biggest budget deficits in peacetime history” to surpluses projected for the foreseeable future. However, addressing the $78 billion request for R&D, he had words of caution. As part of discretionary spending, R&D faces caps set in the 1997 Balanced Budget Agreement that Kahn said are “very, very tight and getting tighter.” Under such limits, R&D faces intense competition from other discretionary programs. Additionally, more than $17 billion of the Administration’s discretionary request does not fit under the caps at all, he said, but is dependent on budgetary offsets that are not likely to find favor with Republicans in Congress.

[It is of note that, just today, some Republican congressional leaders began speculating that Congress may have to break the budget caps in this year’s appropriations process. Both House Speaker Dennis Hastert (R-IL) and House Majority Whip Tom DeLay (R-TX) indicated a willingness to revisit the issue. According to National Journal’s CongressDaily, Hastert said “we have to look at the whole issue of caps.” DeLay is quoted as saying, “It’s reality, probably, that we have to bust the caps” in order to fund such things as increased defense spending.]

Presidential Science Advisor Neal Lane, who is also head of the Administration’s Office of Science and Technology Policy (OSTP) and co-chair of PCAST, asked Kahn whether the science community could help bring the importance of R&D to the attention of Members of Congress. “I don’t think enough can ever be done,” in making the case for science and technology to Congress, Kahn responded. “Budget decisions,” he added, “are often based not on merit but on politics.”

Elgie Holstein, Associate Director for Natural Resources, Energy, and Science at the Office of Management and Budget (OMB), stressed the importance of communication between his agency and OSTP. This allows OMB, the agency responsible for putting together the President’s budget, to receive continuing input and consultation about priorities within the science and technology community. As an example, he cited Clinton’s FY 2000 multi- agency initiative on Information Technology (IT2). Holstein praised PCAST for recommending such an initiative and helping to “develop consensus within the Administration” for it. He warned the committee members, however, that they were “going to have to make the same case to Congress.” Holstein also discussed the Administration’s designation of most of its R&D programs as the “21st Century Research Fund,” which he called a useful device to track, shape, and guide federal science spending.

Asked about efforts (such as S. 296) in Congress to authorize a doubling of R&D funding over a 12-year period, Holstein was skeptical, saying “this is a wonderful time of year for Congress to authorize all kinds of increases” without regard to budgetary impacts. He pointed out that the Administration has taken a conservative approach to the future, projecting outyear budgets through 2004 that essentially represent a freeze on discretionary spending at current budget levels. But he acknowledged that outyear projections almost always change with time. “Whether this ends up being the case depends on a lot of factors,” he said. “The potential exists for those numbers to go up.”

Al Teich, Director of Science and Policy Programs at the American Association for the Advancement of Science (AAAS), reiterated that the good news of the surplus must be tempered by the constraints of the budget caps. He noted that add-ons to the final FY 1999 omnibus appropriations bill actually raised FY 1999 spending above what the caps allow for FY 2002.

Funding for federal R&D programs, Teich said, has stayed relatively level in recent years, once inflation has been taken into account. Most of the growth since 1970 has occurred in the health and life sciences, while DOD R&D (categories 6.1 - 6.3) has shown the steepest decline. Looking to the future, Teich reported that OMB’s outyear projections for civilian R&D programs continue the trend of approximately level funding in current dollars through 2004, as Holstein had indicated. This actually represents a slight decline in constant dollars, Teich pointed out.

Brief reviews were provided on various PCAST panel activities in international energy R&D cooperation, information technology, and education. PCAST member Shirley Malcolm, head of AAAS’s Directorate for Education and Human Resources, remarked that the Elementary and Secondary Education Act is due for reauthorization this year. She mentioned that this law includes the Eisenhower Professional Development Program for to improve math and science teaching, but did not elaborate on how the reauthorization might affect it. Malcolm added that there is still a great need for the federal government to perform research on what is effective in education reform. OSTP Associate Director for Science, Arthur Bienenstock, said the agency was working with OMB on the process of revising regulations for access to federally-funded data. He reported some concerns that OMB’s interpretation “may not hold up in court.” The regulations are currently available for public comment, and Bienenstock strongly encouraged members of the science community to make their opinions known to both OMB and Congress. (See FYI #18 for an update and information on public comment). Ken Kennedy praised the Administration’s response to advice from the President’s Information Technology Advisory Committee, as demonstrated by the IT2 initiative.

Charles Larson of the Industrial Research Institute, Inc., discussed how U.S. industry has adapted to international competition in the last decade. “Ten year ago,” he said, the U.S. was “being written off as a global competitor.” But companies changed their R&D strategies to develop alliances with government and academia, encourage creativity and risk-taking, tie R&D more closely to the customer, evaluate R&D portfolios, and craft metrics to measure effectiveness. Now, Larson reported, the U.S. tops the list of the most competitive nations, and industry investment in R&D is continuing to grow at two or three times the rate of GDP growth.