Special Federal Budget Issue February 8, 2002
Contents
- Overview
- Agriculture
- Commerce
- Defense
- Education
- Energy
- Environment
- Health
- HUD
- Labor
- NASA
- National Science Foundation
- Small Business Administration
- Transportation
Copyright State Science & Technology Institute 2003. Information in this issue of the SSTI Weekly Digest was prepared under a cooperative agreement with the U.S. Department of Commerce, Economic Development Administration. Redistribution to all others interested in tech-based economic development is strongly encouraged — please cite the State Science & Technology Institute whenever portions are reproduced or redirected. Any opinions expressed in the Digest do not necessarily reflect the official position of the U.S. Department of Commerce.
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Publisher's Note
President's Budget Offers Mixed Bag for S&T and Economic Development
Those interested in science, technology and encouraging economic growth probably are viewing with mixed emotions the President's FY 2003 budget proposal released earlier this week.
The proposal calls for $111.8 billion in R&D spending, an increase of $8.6 billion or 8 percent. Not surprisingly, most of that increase is focused in Defense ($5.3 billion increase) and Health and Human Services ($3.7 billion increase), while the Departments of Energy and Agriculture were cut ($743 million and $218 million, respectively).
For information technology and life sciences companies, there will be exciting new opportunities to assist the U.S. in the battle against terrorists and bioterrorists. For the technology community as a whole, the President's call for 950 additional patent examiners and making the research and experimentation tax credit permanent will be warmly greeted.
But for those interested in building tech-based economies, there is little reason to be excited, as most economic development programs are proposed to be eliminated, slashed or held relatively flat.
In the last year, a wide range of groups have called for a more balanced investment in federal science and technology, pointing out that advances in information technology, the life sciences and nanotechnology are dependent on basic research in fields such as chemistry, mathematics and physics. The Adminstration exaggerates and counters the position, saying some are "suggesting that all agencies should receive increases similar to those that NIH and other agencies have received. However, 'balance' by that definition makes prioritization impossible. Increases in our top-priority research areas should logically be greater than increases for other areas."
Key points from the President's budget are:
- The Manufacturing Extension Partnership (MEP) would be cut by $93.6 million to $12.9 million, leaving only enough funding for two MEP centers that are less than six years old and MEP staff to administer the program. The President's budget reopens an argument Congress and the Clinton Administration resolved earlier: should federal support for the MEP centers end after the center reaches its sixth year? Congress and the Clinton Administration concluded that it was in the nation's economic interest to ensure the centers' existence to assist manufacturers become more competitive.
- The Advanced Technology Program (ATP) would be cut by $77.1 million to $107.9 million with only $35 million available for new awards. Additionally, the U.S. Department of Commerce has proposed a series of changes to the program including a repayment requirement of 500 percent of the ATP investment through a 5 percent royalty payment (we will have more on those changes in next week's Digest).
- The Technology Opportunities Program (TOP) in the U.S. Department of Commerce would be eliminated. TOP provides matching grants to states, localities and others for projects that demonstrate innovative uses of digital network technologies in underserved communities. As recently as FY 2001, TOP made $42 million in awards; under the President's budget, the $12.4 million available for grants this fiscal year would be the last funding available.
- The National Institutes of Health (NIH) budget would increase 15.7 percent to a total of $27.3 billion. Of that, $977 million would be allocated for bioterrorism-related research.
- The National Science Foundation would see a 5 percent increase in its budget to $5.036 billion. The new Math and Science Partnerships program would increase by 25 percent to $200 million, and Nanoscale Science and Engineering would increase 11.3 percent to $221 million. Meanwhile, the Experimental Program to Stimulate Competitive Research (EPSCoR) would be cut by 7 percent to $75 million, and the Office of Innovation Partnerships would be cut by 54 percent to $5 million. The Science and Technology Centers and Engineering Research Centers would receive no increases at $45 million and $62.32 million, respectively.
- The Federal and State Technology Partnership (FAST) and Rural Outreach Program (ROP) at the Small Business Administration would receive no increase with $3 million and $0.5 million respectively.
Below you will find one of the most comprehensive reports on the President's FY 2003 budget. SSTI staff have spent hours poring through hundreds of pages of federal budget documents and making dozens of calls to collect the information you see in this week's Digest. As always, our goal is to provide our readers with accurate and timely information. We feel we have achieved that in this issue; however, if we have missed something or made a mistake, please let us know.
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U.S. Department of Agriculture (USDA)
The Administration has requested $74.4 billion for USDA for FY 2003, $2.2 billion less than the FY 2002 appropriation. The President's budget request includes $131 million to protect U.S. food supply from animal and plant pests and diseases, strengthen food safety programs and support specific research activities. New funding requests are made in the following programs:
- Distance Learning & Telemedicine (DLT) Loans and Grants $25 million in grants (decrease of $3 million from FY 2002) and $50 million in direct loans (decrease of $250 million from FY 2002)
- Broadband Telecom Services in Rural America $2 million in grants (decrease of $22 million from FY 2002) and $80 million in direct loans (no change)
- Fund for Rural America The FY 2003 budget proposes blocking the $100 million FY 2001 and 2002 carryover funds, as well as the $60 million in FY 2000.
- Empowerment Zones & Enterprise Community Program $17 million (increase of $2 million from FY 2002)
- Business and Industry Guaranteed Loans $733 million (decrease of $419 million from FY 2002). The 2002 program level of $1.2 billion included over $400 million in loans carried forward from 2001.
- Rural Economic Development Grants no new funding was requested.
- Rural Business Enterprise Grants $44 million (increase of $3 million from FY 2002) to fund non-profit and public efforts to support small and emerging businesses outside urbanized areas.
- Rural Business Opportunity Grants $3 million (decrease of $2 million from FY 2002) to support technical assistance and planning activities within non-profit and public organizations to improve economic conditions in rural areas.
- Research, Education and Economics $2.33 billion (decrease of $200 million from FY 2002)
- Agricultural Research Service $1.07 billion (decrease of $223 million from FY 2002), including $40.8 million for research in emerging, reemerging, and exotic diseases of animals; emerging and exotic diseases of plants; agricultural products; global climate change; agricultural genomes; and biosecurity.
- Cooperative State Research, Education and Extension Service
- National Research Initiative $240 million (increase of $120 million from FY 2002) for competitive research grants into agricultural genomics, food safety, environment and natural resource management and competitiveness and profitability of agriculture.
- Initiative for Future Agriculture and Food Systems Direct transfers from the Treasury to the Secretary of $120 million per year were made to support awards in FY 2000 and FY 2001. A provision of the 2002 Agriculture Appropriations Act blocks the transfer of funds that would otherwise be available under current law to support new grants in 2002; this policy is extended in FY 2003.
Department of Commerce
The President's $5.3 billion budget request for the Department of Commerce reflects an increase of $107.2 million from FY 2002. The U.S. Patent and Trademark Office (USPTO) budget, at $1.38 billion, shows a 21.2 percent increase over FY 2002. The increase will allow USPTO to hire 950 additional patent examiners, transform trademarks to a fully electronic operation by 2004, and implement the President's management agenda, including e-government, outsourcing and workforce restructuring. At the National Institute for Standards & Technology (NIST), the budget proposes devoting an additional $5 million to strengthen the security of critical infrastructures, build public-private partnerships, and help federal agencies fix their information systems. Additional highlights include:
- Technology Administration, including NIST $585.7 million ($103.3 million decrease from FY 2002)
- Under Secretary for Technology/Office of Technology Policy, including the Office of Space Commercialization $8.1 million ($91,000 decrease from FY 2002)
- Advanced Technology Program (ATP) $107.9 million ($77.1 million decrease from FY 2002). Only $35 million would be available for new awards.
- Manufacturing Extension Partnership (MEP) $12.9 million ($93.6 million decrease from FY 2002). Request would return the MEP to its original funding plan, which called for the phase-out of federal monies to MEP centers after six years of funding.
- Baldrige National Quality Program $5.8 million ($610,000 increase over FY 2002)
- Critical Infrastructure Protection Grant Program no funding requested
- Economic Development Administration $349.9 million ($15.7 million decrease from FY 2002). Funding changes occur in the following programs:
- Trade Adjustment Assistance $13 million ($2.5 million increase from FY 2002)
- Planning $22.3 million ($1.7 million decrease from FY 2002)
- Technical Assistance $8.4 million ($665,000 decrease from FY 2002)
- Research $500,000 (no change)
- Economic Adjustment $41 million (no change)
- Public Works $250 million ($17.9 million decrease from FY 2002)
- Bureau of Economic Analysis $69.8 million ($10.7 increase from FY 2002)
- Minority Business Development Agency $29.8 million ($1.4 million increase from FY 2002)
- Technology Opportunities Program The program is being eliminated, a $15.5 million cut from FY 2002.
Department of Defense (DoD)
The Presidents budget proposes $369 billion for the Department of Defense in FY 2003, plus $10 billion to fight the war on terrorism, if needed. For Research, Development, Test and Evaluation, the request totals $53.9 billion, nearly a 10 percent increase over 2002. Funding for nanotechnology, $201 million, reflects a $21 million increase (12 percent) over the program's funding level in FY 2002. Spending for the Networking and Information Technology Research and Development Initiative would drop from $320 million to $306 million, a 4 percent decrease. The Defense Advanced Research Projects Agency (DARPA) would receive a $433 million increase (19.2 percent) to $2.3 billion.
Other DoD programs with their respective FY 2003 budget requests include:
- Commercial Operations and Support Savings Initiative $10.3 million (decrease of $12.4 million from FY 2002)
- University Research Initiatives $221.6 million ($27.4 million decrease from FY 2002)
- Government/Industry Cosponsorship $3.5 million ($5.7 million decrease from FY 2002)
- Defense Experimental Program to Stimulate Competitive Research $9.9 million ($6.9 million decrease from FY 2002)
- Dual Use Science and Technology
- Air Force $10.63 million ($310,000 increase over FY 2002)
- Navy none requested ($12.49 million decrease from FY 2002)
- Army none requested ($13.45 million decrease from FY 2002)
Department of Education (ED)
The President has requested $50.3 billion for the Department of Education in FY 2003, an increase of $1.4 billion or 2.8 percent over FY 2002. Included in the request is $2.85 billion, the same as the 2002 level, for Improving Teacher Quality State Grants, which give states and local educational agencies resources to select and implement research-based strategies for developing a high-quality teaching force and improving student achievement. The request also continues funding at the 2002 level, $12.5 million, for Mathematics and Science Partnerships, a program meant to improve academic achievement in math and science. (For more information on these programs, see the Jan. 4 issue of the Digest)
Additional requests for programs include:
- Research and Dissemination$175 million ($53.2 million increase over FY 2002) to expand efforts to develop proven, research-based practices for improving student achievement and disseminate those practices.
- Regional Educational Laboratories $67.5 million (no change) to maintain a network of regional laboratories that carry out applied research and development, dissemination, and technical assistance activities.
- Educational Technology State Grants $700.5 million (no change) to improve student achievement through the effective integration of technology into classroom instruction, including training for teachers to use technology, to develop courses in information technology, and to purchase technology-based curricula.
- 21st Century Community Learning Centers $1 billion (no change) for before- and after-school academic enrichment opportunities, particularly for children who attend high-poverty or low-performing schools. Approximately $325 million would be available for new grants.
Department of Energy (DOE)
The Administration has requested $21.9 billion for the Department of Energy's FY 2003 budget, an increase of $582 million over FY 2002. At $3.285 billion, the DOE science budget essentially remains unchanged between FY 2002 appropriations and the President's FY 2003 request. Major funding changes in Fossil Energy include the consolidation of the Clean Coal Power Initiative, the Clean Coal Technology Demonstration program and the current coal research program. Now billed the Fossil Energy Coal Program, the three programs received $405.3 million in FY 2002, making this year's proposal of $375.1 million a reduction of $30.2 million or 8 percent.
The total request for Energy Efficiency and Renewable Energy, $1.312 billion, shows a one percent increase over FY 2002. Energy Conservation funding is one percent less than a year ago, however, and includes a seven percent decrease in Industry sector funding. Specific programs affected include:
- Industries of the Future Specific: $71.6 million ($1 million decrease from FY 2002). The cut is absorbed entirely by the Petroleum element, which received no request for funding ($2.8 million decrease from FY 2002). The cut to Petroleum is partially offset by a 13.7 percent increase to the Agriculture element.
- Industries of the Future Crosscutting: $57.1 million ($3.8 million decrease from FY 2002). The cut includes a $2 million decrease (45.7 percent) to Inventions and Innovation, a $2.8 million decrease (15.2 percent) to Combustion, and a $1 million decrease (7.3 percent) to Industrial Materials for the Future.
At $407.7 million, funding for Renewable Energy Resources reflects a six percent increase over FY 2002, including increases in the following areas:
- Hydrogen +$10.7 million to promote hydrogen as a future pollution free fuel source;
- High Temperature Superconductivity +$15.5 million for developments in power transmission capabilities;
- Wind $5.4 million to shift program's focus to technology suited for moderate wind speed areas and a wider range of application; and
- Biomass/Biofuels new integrated program would focus bioenergy research, development and demonstration activities toward a single crosscutting effort
New initiatives introduced in FY 2003 include:
- FreedomCAR $150 million to refocus transportation research and development toward cost-effective, fuel cell powered vehicles and developing the infrastructure needed to make hydrogen an available fuel source.
- Nuclear Power 2010 $38.5 million to develop advanced nuclear technologies that will lead to new nuclear plants by 2010
Environmental Protection Agency (EPA)
The Environmental Protection Agency's budget request for FY 2003 is $7.7 billion, a decrease of 3.5 percent from the FY 2002 appropriation. Funding for science programs totaling $327.8 million in FY 2003 dips 2.4 percent from the FY 2002 enacted level. Included in the President's budget is $10 million for a new program, the National Environmental Technology Competition, which would recognize and reward innovative technologies and stimulate development where major technology gaps exist. The program builds public-private partnerships, fosters technological innovation through competition and promotes the development of new, cost-effective technologies that address some of the nation's most pressing environmental challenges.
Other programs of interest are:
- Human Health Research $51.8 million (9.7 percent increase over FY 2002)
- Environmental Monitoring and Assessment Program $38.2 million (18 percent increase over FY 2002)
- Research to Support Pollution Prevention $44 million (17 percent increase over FY 2002)
- Regional Science and Technology $3.6 million ($26,900 increase over FY 2002)
- Environmental Technology Verification $3.6 million ($9,900 increase over FY 2002)
- Pollution Prevention Incentive Grants to States $5.9 million (no change)
Department of Housing and Urban Development (HUD)
For FY 2003, HUD would fund Community Development Block Grants (CDBG) formula grants at $4.436 billion, an increase of $95 million. The President's Budget proposes a legislative change to eliminate grants to the wealthiest one percent of eligible communities, defined as those with per capita income two times the national average. (2000 National Per Capita Income = $ 22,199) This proposed change would affect: Greenwich, CT; Newport Beach, CA; Colorado Springs, CO; Lower Merion, PA; Naples, FL; Penn Hills, PA; Virginia Beach, VA; Palo Alto, CA; Maldem, MA; Westchester County, NY; Santa Monica, CA; Brookline, MA; and Newton, MA.
Brownfields Economic Development Initiative, which makes competitive economic development grants for the economic development, redevelopment and remediation of qualified brownfields projects, would have $25 million for grants, the same level awarded in FY 2002.
The Neighborhood Network Initiatives would have $20 million (the same level as FY 2002) to help create or expand computer technology centers in public housing facilities or nearby communities.
The President's budget proposal eliminates the following programs:
- Rural Housing and Economic Development Grants $25 million in FY 2002
- Round II Empowerment Zone Grants $45 million in FY 2002
- PATH (Partners for the Advancement of Technology In Housing) $8.8 million in FY 2002
National Institutes of Health (NIH)
The President's FY 2003 budget request for the National Institutes of Health is $27.3 billion, an increase of $3.7 billion, or 15.7 percent over the FY 2002 appropriation of $23.6 billion. The NIH budget request includes a total of $1.7 billion for bioterrorism-related research and infrastructure, an increase of 18.7 percent over FY 2002. Of this amount, NIH estimates that it will fund $977 million for bioterrorism research activities, to continue existing bioterrorism-related programs as well as initiate new ones.
Department of Labor
Federal job training programs would have approximately $9.3 billion available in FY 2003, a decrease of nine percent from FY 2002. The President's budget for the Department of Labor calls for $4.9 billion in new money and estimates an additional $4.3 billion in unspent funds will be available from previous years. The FY 2003 Budget also would take the $138 million for the H-1B Training Grants, a program crafted to fill labor shortages in high-tech industries, and redirect it to eliminate backlogs in the permanent alien labor program.
NASA
The total NASA budget would increase three percent to $15 billion, up from $14.5 billion in FY 2002. Funding for the Science, Aeronautics and Technology unit increases 8 percent from $8 billion to $8.8 billion in FY 2003. Funding across technology areas within the unit is as follows:
- Space Science $3.414 billion (19 percent increase over FY 2002)
- Biological & Physical Research $842 million (2.72 percent increase over FY 2002)
- Earth Science $1.628 billion ($3 million increase over FY 2002)
- Aerospace Technology $2.815 billion (12 percent increase over FY 2002) which includes $146.9 billion for Commercial Technology Programs (10 percent decrease from FY 2002). Commercial Technology Programs are further broken down into:
- Commercial Programs and Tech Transfer Agents $35.6 million (27 percent decrease from FY 2002)
- Small Business Innovation Research/Small Business Tech Transfer Programs $111.3 million (3 percent decrease from FY 2002)
- Academic Programs $143 million (36 percent decrease from FY 2002)
National Science Foundation (NSF)
The Administration is requesting $5.036 billion for FY 2003 for the National Science Foundation, 5 percent more than last year's allocation. Citing the agency's expertise and success in funding competitive research, the President's budget transfers the National Oceanographic and Atmospheric Administration's (NOAA's) Sea Grant Program and the U.S. Geological Survey's toxic substances hydrology research program to NSF to conduct merit-based competition and improve program effectiveness.
- Global Climate Change Research Initiative $15 million as part of the Administration's new multi-agency initiative which aims to advance understanding in highly focused areas of climate science, to reduce uncertainty, and to facilitate policy decisions.
- Mathematical Sciences $60 million in new funding to undertake fundamental research in the mathematical and statistical sciences supporting the integration of mathematics and statistics across the full range of science and engineering disciplines.
- 2010 Project $25 million (25 percent increase over FY 2002) to support work on the genome of the model plant Arabidopsis with the end goal of creating better products for society.
- Biocomplexity in the Environment $79 million (36 percent increase over FY 2002) to support investigation into interdependencies of natural and human systems at all scales.
- Centers and Networks of Excellence $37.94 million (12 percent increase over FY 2002) to fund research and education centers within the Nanoscale priority area.
- Engineering Research Centers $62.32 million (no change) to support partnerships involving academe, industry, and NSF for development of next-generation advances in complex engineered systems important for the nation's future.
- Experimental Program to Stimulate Competitive Research (EPSCoR) $75 million proposed in FY 2003, a 7 percent decrease.
- Information Technology Research $286 million (3 percent increase over FY 2002) to deepen fundamental research between fields and disciplines and explore new applications to advance research across all fields.
- Interdisciplinary Mathematics $47 million (57 percent increase over FY 2002) to study the role of mathematics in advancing interdisciplinary science focusing on management of large data sets, modeling uncertainty, and prediction of complex non-linear systems.
- Learning for the 21st Century $185 million (27.5 percent increase over FY 2002) to improve understanding of how people learn and apply that understanding to workforce development, through support to new multidisciplinary, multi-institutional Science of Learning Centers.
- Math and Science Partnerships A $200 million installment for the President's five-year program to ensure that all preK-12 students have the opportunity to achieve their full potential. This is up 25 percent over last year's $160 million appropriation.
- Nanoscale Science and Engineering $221 million (11.3 percent increase over FY 2002) to fund long-term fundamental research to discover novel phenomena, processes and tools.
- Networking Information Technology Research and Development Program NSF's budget for the multi-agency program to encourage advances in computing would be $678.6 million, up $2.7 million (0.4 percent increase over FY 2002).
- Office of Innovation Partnerships $5 million requested in FY 2003, a 54 percent decrease from FY 2002.
- Plant Genome Research Program $75 million, the same funding level as appropriated in FY 2002, supporting ongoing research on genomics of plants.
- Science and Technology Centers $45 million (no change) to support centers across the range of NSF disciplines.
- Sea Grant Program This former NOAA program would receive $57 million in FY 2003 (no change). The National Sea Grant Program encourages the stewardship of the nation's marine resources through research, education, outreach and technology transfer.
- Toxic Substances Hydrology Program $10 million transferred from U.S. Geological Survey in the President's FY 2003 budget to initiate a competitive-grants process to address water-quality issues.
Small Business Administration
As in FY 2002, the Presidents budget request for the Small Business Administration shows no funding for the New Markets Venture Capital Program or other New Markets programs. Programs receiving requests include:
- Federal and State Technology Partnership $3 million (no change)
- Rural Outreach Programs $0.5 million (no change)
- Small Business Development Centers $88 million (no change)
- Small Business Investment Company $4 billion for SBIR Participating Securities and $3 billion for SBIC Debentures (16.7 percent increase over FY 2002)
Department of Transportation (DOT)
The FY 2003 budget for the Department of Transportation includes $59.3 billion for the agency, up 8 percent when adjusted for a reduction in highway spending required by law. Calls to DOT to obtain appropriation figures for FY 2002 were not returned.
- Federal Aviation Administration $195.8 million for research and acquisition program activities.
- Federal Highway Administration $82 million for Intelligent Transportation Systems (ITS) standards, research and development; and $91 million for ITS deployment.
- National Highway Traffic and Safety Administration $61 million for research and analysis which includes funding for the National Transportation Biomechanics Research center of which the Crash Injury Research and Engineering Network is a part.
- Federal Transit Administration, National Research and Technology Program $49 million (no change) which includes $8.2 million for Transit Cooperative Research, as well as funding for research into issues addressing accessibility for the disabled, air quality, traffic congestion; and development of hybrid electric buses, fuel cells, and battery powered propulsion systems. The University Transportation Centers will continue their current funding level of $6 million per year to provide support research, education, and technology transfer activities to address regional and national transportation issues.
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