Special Federal Budget Issue, February 13, 2006
Each year, SSTI dedicates an issue of the SSTI Weekly Digest to the president's budget request. Because of length considerations, the issue is not intended to be exhaustive. Instead, we highlight selected S&T programs and initiatives that we believe are of interest to our readers. A PDF version of this issue may be downloaded by clicking here. The president's budget request and supporting documents can be found at: http://www.whitehouse.gov/omb/budget/fy2007/

Copyright State Science & Technology Institute 2006. 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.

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Publisher's Note
 FY2007 Budget Request Represents a Mixed Bag
Over the last year, there has been increased public and government attention on issues involving tech-based economic development. For much of the year, Thomas Friedman's The World is Flat has dominated the New York Times bestseller list. A series of reports from the AeA, Council on Competitiveness, and the National Academy of Sciences call for increased action by the federal government. To help address a flattening world, Congress is now considering significant bi-partisan legislation addressing those report's recommendations. And just in the last month, a series of governors have unveiled plans for dramatic new investments in innovation, science, and technology.

It is fitting, then, that President Bush made competitiveness a major theme of his State of the Union and, in his budget proposal, unveiled his American Competitiveness Initiative (see below for details).

A key portion of the American Competitiveness Initiative calls for major increases over the next 10 years in the physical sciences budgets at the Department of Energy's Office of Science, the National Institute of Standards and Technology, and the National Science Foundation. According to the plan,"President Bush plans to double, over 10 years, investments in innovation-enabling physical science and engineering research at the National Science Foundation (NSF), the Department of Energy’s Office of Science (DoE SC), and the Department of Commerce’s National Institute of Standards and Technology (NIST) core activities."

This proposal represents good news for anyone interested in tech-based economic development (TBED). More funding for research is needed for the U.S. to retain its national leadership in innovation. The proposal, however, is less ambitious than the plan Congress approved in 2002 to double NSF's budget by fiscaly year 2008. Under the president's proposal, the doubling will be for "innovation-enabling physical science and engineering research" and will take until FY 2017.

Less encouraging, in the FY 2007 budget request are the amounts proposed for several programs of importance to the TBED community, including:

In the area of education, the American Competitiveness Initiative calls for $412 million in spending on new programs. Yet, at a time when we need to encourage increased college participation, especially among underrepresented groups, the budget proposal calls for freezing the Pell grant program and would eliminate $303 million for the Gaining Early Awareness and Readiness for Undergraduate Programs, which supports early college prep activities for low-income elementary and secondary students. These programs are intended to discourage dropping out and to encourage postsecondary enrollment.

In short, the president's State of the Union represents an important step forward; unfortunately, the budget request doesn't come close to matching the State of the Union.

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Special Initiative - The American Competitiveness Initiative
During his 2006 State of the Union Address, President Bush outlined a decade-long $50 billion American Competitiveness Initiative (ACI) for R&D, education and entrepreneurship. The FY 2007 downpayment on ACI is $5.9 billion, which is accomplished by shuffling priorities within a shrinking federal discretionary budget environment to find $1.3 billion in new funding and $4.6 billion in R&D tax incentives. Specifically, ACI calls for:

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Department of Agriculture
Perennially a favorite target for Congressional earmarks, the U.S. Department of Agriculture (USDA) budget, at $92.8 billion, is nearly $3 billion below the FY 2006 level of anticipated expenditures. More than three-fourths of the USDA budget outlays for FY 2007 are dedicated to mandatory spending programs such as nutrition assistance, conservation, export promotion and farm commodity programs. The remaining balance of $21.5 billion, $1.7 billion or 7.3 percent less than the FY06 outlay level, is for discretionary programs. All USDA research and TBED-related programs fall within the discretionary section of the budget.

The FY07 budget request includes $322 million for the USDA portion of the multi-agency Food and Agricultural Defense Initiative (FADI), an increase of $69 million or 27 percent above FY06 levels. Since the research and diagnostic facility in Ames, Iowa, was fully funded in 2006, the FY07 request represents a programmatic increase of $127 million or 65 percent. The largest line-item FADI increases within the USDA are for Enhanced Surveillance for Pest Detection/Animal Health Monitoring ($43 million; 49 percent increase);  research within the Agricultural Research Service ($72 million; 112 percent increase); and the Food Emergency Response Network ($19 million; 533 percent increase).

USDA support for the much-in-the-news international Avian Influenza concern would decrease 29.3 percent in FY07 to $82 million.

Tech-based and Traditional Economic Development
Economic development activities, targeting rural America are supported by two USDA service agencies: the Rural Business-Cooperative Service and the Rural Utilities Service. Comparison of FY07 budget levels with FY06 actual levels is challenged by a $1.6 billion one-time infusion of funds for hurricane relief. The budget request also calls for elimination of a $1.5 billion program that underwrites notes issued by private sector electric and telecommunication lenders.

In addition, the budget request eliminates funding ($198 million) for the Broadband and Internet Services program, which helps finance the installation of various modes of broadband transmission capacity in rural America. However, other broadband loan programs remain in place, albeit at lower funding levels. The 2007 budget still includes discretionary funding to support about $357 million in loans.

As was the case in the president's FY06 budget proposal, no new funds are included in the FY07 budget for the Rural Business Enterprise (Congress appropriated $40 million in FY06) and Rural Business Opportunity Grant ($3 million) programs, Economic Impact Initiative Grants ($18 million), Appropriate Technology Transfer for Rural Areas ($2 million), Rural Community Development Initiative ($6 million), or the Empowerment Zones & Enterprise Community (EZ/EC) Program ($13 million).

Retained in the FY07 budget request are:

Research
USDA research activities are coordinated by the four Research, Education and Economics agencies, which oversee the discovery, application and dissemination of information and technologies spanning the biological, physical and social sciences.

Agriculture Research Service (ARS), with a FY07 $1.001 billion (11.9 percent decrease), is the principal in-house research agency for the USDA, conducting research toward a safer, more economical food supply of agricultural products and to provide producers with technologies to competitively supply these products. Most ARS program activities would experience cuts except homeland security ($81 million; 125 percent increase) and the National Agricultural Library ($25 million; 13.6 percent increase). Total ARS funding available for R&D contracts is slated to drop 42.3 percent from $168 million to $97 million. Most of this reduction, however, results from the elimination of congressionally earmarked funds for 2006.

Cooperative State Research, Education, and Extension Service (CSREES), at $1.046 billion (13.3 percent decrease), is the federal partner with land grant and non-land grant colleges and universities in carrying out extramural research, higher education, and extension activities. After the removal of $196 million in congressionally earmarked funds, the Administration has requested $87 million of new funding for CSREES.

Economic Research Service (ERS), at $82.5 million (8.7 percent increase), provides economic and other social science research and analysis for public and private decisions on agriculture, food, natural resources and rural America. The ERS request includes an increase of $5 million to implement a new research program to monitor the changing economic health and well-being of farm and non-farm households in rural areas; and an increase of $1.6 million to continue research into changing in food supply and consumption patterns. Principally an intramural research office, total ERS funding for R&D contracts remains level at $5 million.

National Agricultural Statistics Service, at $153 million (10 percent increase), conducts the Census of Agriculture and provides the official current statistics on agricultural production and indicators of the economic and environmental welfare of the farm sector. The majority of the $14 million increase is to conduct the 2007 Census.

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Department of Commerce
The Administration's FY 2007 $6.138 billion discretionary budget request for the Department of Commerce reflects a 4.23 percent decrease from the FY06 appropriation of $6.410 billion. However, the Economic Development Administration (EDA) would receive a $46.7 million increase to support programs within the Administration's new American Competitiveness Initiative (ACI), announced in the president's State-of-the-Union Address. The NIST Hollings Manufacturing Extension Program, on the other hand, is slated for a cut of $58.3 million in the FY07 request.

EDA is charged with leading the federal economic development agenda by promoting innovation and competitiveness while preparing regions for growth and success in the worldwide economy. The Administration's FY07 budget request of $327.2 million reflects a 16.7 percent increase compared to the FY06 appropriation of $280.4 million. Additional funding is requested to assist distressed communities with integrating development strategies with the activities of the ACI, which includes investments in R&D, science, education and workforce training, and support for business environments that encourage entrepreneurship.

EDA also will advance the core principles outlined in the FY06 Strengthening America's Communities Initiative (SACI) and incorporate recommendations of the Secretarial Advisory Committee's report issued in June 2005. In addition, EDA plans to work with the Department of Housing and Urban Development's Community Development Block Grant Program, as well as the Department of Labor and its workforce development programs, to explore the implementation of complementary program performance goals and metrics.

The Technology Administration (TA) works with U.S. industry to maximize technology's contribution to U.S. economic growth. Led by the Under Secretary for Technology, TA fulfills its broad responsibilities through its component organizations: the Office of Technology Policy (OTP), the National Institute of Standards and Technology (NIST), and the National Technical Information Service, with its National Telecommunications and Information Administration.

Funding for the Minority Business Development Agency (MBDA) would remain at $29.6 million in FY07, the same amount as the FY06 appropriation. MBDA provides management and technical assistance to minority-owned businesses through the national network of Minority Business Development Centers and Native American Business Development Centers. Staffing levels are maintained at 115 full-time equivalent positions.

The National Oceanic and Atmospheric Administration (NOAA) would receive $3.684 billion in FY07 discretionary funding, or $227.3 million less than the FY06 appropriation. NOAA components supporting significant research fall under the Operations, Research and Facilities line item, which is slated for a $156.4 million cut. Key NOAA components for the research community would see increases, however:

The U.S. Patent and Trademark Office (USPTO) under the Administration's FY07 recommendation would keep all the fees it will collect. USPTO would use the $1.843 billion in spending authority contained in the president's FY07 budget request to reduce application processing time and increase the quality of its products. This funding would allow for increased staffing of 682 full-time equivalent positions. The mission of the USPTO is to ensure that the intellectual property system contributes to a strong global economy, encourages investment in innovation, and fosters entrepreneurial spirit. This proposal has been made by the Administration in previous years.

The Bureau of Economic Analysis (BEA) within the Economic and Statistical Analysis Administration would receive $80.5 million, an increase of $558,000 over the FY06 appropriation. Funding requested in FY07 will help BEA provide timely, relevant and accurate economic accounts data in an objective and cost-effective manner.

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Department of Defense
The Administration's FY07 budget request for the Department of Defense (DoD) totals $439.3 billion, an increase of 7 percent from FY 2006. However, funding for DoD science and technology decreased 15.9 percent, to a total of $11.1 billion for FY07. All stages of DoD R&D are anticipating cuts: budget category 6.1 basic research (3.3 percent decrease), budget category 6.2 applied research (13.4 percent decrease), and budget category 6.3 advanced technology development (21.5 percent decrease).

The story on the defense component level is more mixed. Total 6.1 through 6.3 research expenditures for the Army and the Navy would decrease, whereas Defense-wide programs (which includes DARPA, SOCOM, etc) would increase. The Air Force, on the other hand, would increase funding in 6.1 basic research, but would sustain a decrease for 6.2 applied research. Additionally, advanced technology development funding would decrease significantly for the Army, Navy, Air Force and Defense-wide. The breakdown by DoD departments is as follows:

Army

Navy

Air Force

Defense-wide

Funding for university-based research and other DoD programs would incur major reductions or elimination:

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Department of Education
Discussion on competitiveness and innovation take very different tacts between the statehouses and Washington, D.C. Education is the fundamental building block for a skilled workforce and for creating future scientists and engineers. While most states are investing more in education, the Administration's FY07 budget request for the U.S. Department of Education totals $54.41 billion, a 5.5 percent decrease from FY06 total spending of $57.55 billion.

The 2007 request, proposes to eliminate 42 programs that totalled $3.5 billion in FY06. Many also were proposed for elimination in 2006, but Congress disagreed with the Administration's plans.

Some of the proposed program cuts include:

The education budget shifts more funding toward several K-12 math and science programs:

The Education Department's FY07 budget also would provide $35 million for a greatly expanded National Security Language Initiative. This initiative is designed to expand foreign language education beginning in early childhood and continuing throughout formal schooling and into the workforce. Special emphasis is in languages "critical to our national security," such as Arabic, Chinese, Farsi, Hindu, Japanese, Korean, Russian and Urdu.

At $981.2 million, requested FY07 funding for the 21st Century Learning Centers reflects no change. The centers are designed to help communities establish or expand learning centers that provide extended learning opportunities for students and related services to their families.

Requested FY07 funding of $182.2 million for the Mathematicsand Science Partnerships also reflects no change from the FY06 appropriation. This program provides state formula grants to develop rigorous mathematics and science curricula, distance learning programs, and incentives to recruit college graduates with degrees in math and science into the teaching profession.

On the research front, the Institute of Education Sciences would receive $554.5 million, a 7.2 percent increase, in FY07 funding. The institute is intended to fund programs of research, development and dissemination in areas where knowledge of learning and instruction is inadequate.

Other key budget issues include:

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Department of Energy
The Administration's FY 2007 budget request for the Department of Energy (DOE) is $23.6 billion, a $5 million decrease from the FY 2006 appropriation. While overall funding for the DOE is virtually flat, the FY07 request includes significant shifts for many offices to reflect the Administration's realignment of energy priorities. Real decreases will be absorbed largely by DOE's $6.6 billion Environment and $2.6 billion Energy budgets, with decreases of $589.6 million (8.2 percent) and $130 million (4.8 percent), respectively. The National Nuclear Security Administration budget request is $9.3 billion, a 2.3 percent increase over the FY06 appropriation.

DOE’s Office of Science FY07 budget requests $4.1 billion, a 14 percent increase over the FY06 appropriation, as a part of the American Competitiveness Initiative. Funding for this initiative will go toward new technologies in such areas as nanotechnology, material science, biotechnology and high-speed computing. The Science budget includes $539 million for the Advanced Energy Initiative, a $2.1 billion DOE program intended to reduce America’s dependence on imported energy sources. Total funding for the initiative reflects a $381 million increase over its FY06 level.

Also under the Office of Science, increases of $50.9 million and $31.3 million are targeted for nanoscale science research and fusion sciences research, respectively. Some of the Science program areas with proposed increases or decreases include:

The FY07 budget request for the Office of Energy Efficiency and Renewable Energy (EERE) is $1.2 billion, a 0.2 percent increase over the office's FY06 level. EERE conducts research, development and deployment activities to advance energy efficiency and clean power technologies and practices. Much of this funding is an integral part of the Advanced Energy Initiative and expands programs that research new energy sources, including $195 million for Hydrogen Technology, a $40 million increase over FY06; $150 million for Biomass and Biorefinery Systems R&D, a $59 million increase; $148 million for Solar Energy, a $65 million increase; and $44 million for Wind Energy, a $5 million or 12.8 percent increase.

One EERE program that would see a decline in its funding is Vehicle Technologies. This program researches technologies for cost effective plug-in hybrid vehicles and supports the FreedomCAR and Fuel Partnership and the 21st Century Truck Partnership. It would receive $166 million, a $16 million (8.8 percent) cut from the FY06 level.

Under the Energy Supply account, the FY07 budget eliminates two programs that research alternative, clean and environmentally friendly power technologies -- Geothermal Technology, a $23 million decrease, and Hydropower, a $495,000 decrease.

The Office of Fossil Energy would receive $649 million in FY07. Requested funding shows a $192.7 million decrease over the FY06 appropriation. Funding for coal R&D, one of the office's major programs, would be slashed by $46.1 million, relative to FY06. The FY07 budget proposes to cancel $203 million in prior-year balances and request advanced appropriations of $203 million of forward funding for FutureGen in FY 2008 and beyond, which fulfills a similar role of demonstrating advanced coal-based technologies. The budget request states these balances are no longer needed to complete active projects in the Clean Coal Technology program. The budget also proposes to transfer $54 million from Clean Coal Technology to the Fossil Energy R&D program for work on the FutureGen project to develop a coal-fueled, near-zero atmospheric emissions electricity and hydrogen generation plant.

Additional DOE programs of interest:

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Department of Health and Human Services
The $698 billion FY 2007 budget request for the Department of Health and Human Services (HHS) reflects an increase of $58 billion over FY 2006, most of which occurs in mandatory spending programs such as Medicare. Total discretionary spending drops by $1.5  billion. Funding levels for discretionary programs such as the Food and Drug Administration, Centers for Disease Control and Prevention, and the National Institutes of Health (NIH) are diverse. For example, FDA would receive a $71 million increase over its FY 2006 level, while CDC would experience a $367 million decrease.

The Administration is proposing to terminate three HHS programs related to community and economic development -- Community Services Block Grants ($630 million in FY06), Community Economic Development ($33 million) and Rural Community Facilities grants ($7 million).

Although the total NIH FY07 request of $28.587 billion is the same as the FY06 program level, FY07 funding for all but one of the 24 institutes, centers and the National Library of Medicine that comprise NIH would decrease, based on the Administration's request. The exception is the National Institute of Allergy and Infectious Diseases, which would see a 0.2 percent increase to $4.395 billion. Funding for the Office of the Director also would increase by $140 million or 26.5 percent to support the Advanced Development fund described below.

Despite the level funding, NIH anticipates supporting 9,337 competing research project grants, an increase of 275 over the FY06 appropriation. It also plans to support 1,373 research centers via $2.834 billion in proposed funding, a 2.3 percent or $62 million increase.

Stipends for trainees supported by the Ruth L. Kirschstein National Research Service Award (NRSA) will remain at the FY06 appropriation levels. No increases are provided for other components of the NRSA training programs, such as tuition or health benefits. Training remains at approximately the same level as the FY06 appropriation, with support provided for 17,499 full-time training positions.

Specific funding priorities for NIH in FY07 include: The FY07 NIH SBIR/STTR budget for research grants is estimated to total $603 million, a $2 million decrease. The total available for contract awards through the SBIR and STTR programs is estimated to be $27 million, which is even with the FY06 level.

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Department of Homeland Security
With the FEMA fiasco related to last summer's hurricanes, it should not be too surprising that much of the agency's discussion of its FY 2007 budget involves ways to improve the nation's preparedness and responsiveness to catastrophic events and natural disasters. Overall, the Department of Homeland Security (DHS) budget request for FY07 is $42.7 billion, reflecting a 5.8 percent increase above FY 2006 appropriations.

The FY07 budget request for the Science and Technology Directorate, which oversees the agency's research, development, testing and evaluation (RDT&E) activities, is $1.002 billion. The figure reflects a 33 percent decrease from the FY06 appropriation level. However, nearly all of that cut stems from a departmental reorganization which spun out the Domestic Nuclear Detection Office with its own appropriation request of $536.8 million for FY07.

Of the four offices within the Science and Technology Directorate, the two most frequently encountered by the state and local technology-based economic development community are:

The agency's FY07 Budget in Brief breaks down the S&T directorate budget by program area rather than office. Reduced funding is requested for nearly every research program area, including a 16.7 percent decrease for the University and Fellowship Program. Fiscal year 2007 funding for the program, which supports university-based DHS Centers of Excellence, is $51.97 million ($10.4 million decrease).

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Department of Housing and Urban Development
The Administration's FY 2007 budget request for the Department of Housing and Urban Development (HUD) is $33.528 billion, a 29.9 percent decrease from the FY 2006 appropriation of $47.826 billion.

The Office of Community Planning and Development would receive $6.5 billion under the Administration's FY07 budget request, down from $19.129 billion in FY06. Policy Development and Research would receive $68 million, a $13 million increase over the FY06 appropriation. Research and Technology would receive $40 million ($10 million increase), and University Programs would receive $28 million ($8 million increase).

The FY07 budget proposes to reduce funding for the Community Development Block Grant (CDBG) program to $3.032 billion, a 27.4 percent cut from the FY06 appropriation of $4.178 billion. In addition, formula changes will be proposed to direct more of the program's base funding to communities that cannot meet their own needs, and bonus funds will be available to communities that demonstrate the greatest progress in expanding home ownership and opportunity for their residents.

The CDBG budget request is in keeping with the Administration's Strengthening America's Communities Initiative (SACI), which was first proposed in FY06. SACI calls for the termination of more than a dozen programs in several agencies and reduces overall federal support for local and regional community and economic development. CDBG and the Economic Development Administration (EDA), the two largest programs affected by the SACI proposal, eventually would be merged into a single, smaller competitive grant program tailored more toward technology-based economic development activities. SACI is to be administered by the Department of Commerce. In FY07, EDA will work with CDBG to explore the implementation of complementary program performance goals and metrics.

Also, in keeping with FY06 proposals, several HUD programs dedicated to economic development are slated for elimination in FY07, including Brownfields Redevelopment, Rural Housing and Economic Development, Section 108 Loan Guarantees, Community Development Loan Guarantees, Economic Development Initiatives and Special Purpose Projects, Neighborhood Network Initiative and Neighborhood Initiative Demonstration, Renewal Communities, Urban Empowerment Zones and Enterprise Communities, and Partnership for Advancing Technology in Housing.

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Department of the Interior
The Administration's $16.1 billion FY 2007 budget request for the Department of Interior (DOI) represents a 1.8 percent decrease from FY 2006. The budget includes $467.5 million for the department's energy programs, a net increase of $43.5 million over FY06. It also includes a $43.2 million initiative to implement the department's top energy priorities -- the Energy Policy Act of 2005 and the president's National Energy Policy.

Some DOI research-related items of potential interest: return to the top of the page

Department of Labor
The Department of Labor’s (DOL) discretionary budget request of $10.9 billion is $600 million less (5.5 percent decrease) than the FY 2006 appropriation. The agency’s payroll, however would increase by 103 full-time equivalent positions, according to the budget overview.

The Employment and Training Administration (ETA) FY 07 budget request of $5.6 billion reflects a 14.7 percent increase from the FY06 appropriation. Included in ETA funding is $150 million ($26 million increase) for Community-Based Job Training Grants, in the effort to strengthen the role of community colleges in workforce investment. The grants build on the High Growth Job Training Initiative, which sought to prepare workers to take advantage of new and increasing job opportunities in high growth industries and sectors of the economy.

For a second straight year, the budget proposes to consolidate four DOL programs and state grants for basic employment services into a $3.41 billion Career Advancement Accounts. The budget overview states that the new program includes formula grants and a National Reserve and will give states and the Secretary of Labor greater ability to target resources where needed, facilitate coordination, and eliminate duplication in the provision of services to adults, dislocated workers, and youth. The Administration tried unsuccessfully in FY06 to create a unified grant program by consolidating the WIA Adult, Dislocated Worker and Youth programs and Employment Service state grants. The FY07 consolidated program would be at least $620.3 million under the comparable FY06 total for the programs.

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Department of Transportation
The Administration's FY 2007 budget request of $65.6 billion for the Department of Transportation (DOT) is $135 million higher than the FY 2006 appropriation. DOT's request would be distributed across the department's five key strategic objectives:

The balance of 1.1 percent would go toward organizational excellence, according to the DOT Budget in Brief.

Among budget highlights, $122 million is requested for the Next Generation Air Transportation System initiative, a multi-agency effort to explore new ways to manage air transportation through the use of modern technology. Of the total, $80 million would go to the Federal Aviation Administration (FAA) for the Automatic Dependent Surveillance-Broadcast (ADS-B) technology, and another $24 million would fund System Wide Information Management. This ADS-B will replace current radar systems and provide more accurate surveillance coverage.

The FY07 request for all research, engineering and development at FAA is $130 million ($7 million decrease), including $88 million for continued research on aviation safety issues. The remaining research funding is for mobility and environmental issues.

The FY07 budget request of $35.2 million for the Research and Innovative Technology Administration (RITA) includes $8.2 million for R&D, a $2 million increase. RITA supports transportation research that cuts across all modes of transportation and promotes innovative transportation technologies, such as hydrogen fuels and remote sensing.

For other DOT agencies, RITA also will undertake more than $300 million in transportation-related research, education, and technology application on a reimbursable basis. Through the University Transportation Centers Program, for example, RITA will support the education of transportation professionals in obtaining advanced degrees in transportation-related programs from participating universities.

Under the Federal Highway Administration, $467.6 million is requested for R&D, including an obligation limitation of $429.8 million. The budget proposes dedicating an additional $37.8 million from the FY07 federal-aid obligation limitation for research. This level of funding will provide FHWA resources to pursue work critical to the department and its stakeholders.

The National Highway Traffic Safety Administration budget request includes $86 million to support crashworthiness research for occupant protection and biomechanics; driver distraction testing; crash causation research; the use of linked databases; and national crash data systems.

The FY07 budget request for the Federal Transit Administration (FTA) includes $61 million for National Research, to be distributed across four programs:

Similar to FTA, and keeping with FY06 following DOT restructuring efforts, funding for Research and Special Programs under the Pipeline and Hazardous Materials Safety Administration would be reflected in four accounts: Hazardous Materials Safety, Pipeline Safety, Emergency Preparedness Grants, and Administrative Expenses. The total for the four accounts in FY07 would be $149 million, an increase of $20 million over FY06 appropriations.

The Federal Railway Administration budget request for R&D is $35 million, a $20 million decrease over the FY06 appropriation. FRA support research efforts in the areas of rail systems safety.

Lastly, $3.9 million in FY07 funding is requested for the Minority Business Resource Center program. Federal subsidy and administrative expenses of $900,000 would support an $18 million short-term loan guarantee program to assist small, disadvantaged and women-owned transportation-related businesses. In addition, $3 million would fund the Minority Business Outreach program, which includes a clearinghouse for national dissemination of information on transportation-related projects and grants to minority educational institutions.

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Department of the Treasury
There are only four programs in the Treasury Department that SSTI monitors for the tech-based economic development community. Similar to the Administration's FY 2006 budget request, all are slated for termination or phase out in FY 2007. Congress restored 98.9 percent of the funding in its final FY06 appropriations.

The programs slated for termination include the Community Development Financial Institutions (CDFI) Programs (appropriated $30.9 million in FY06), the Bank Enterprise Award ($13.4 million), and the CDFI Native Initiatives ($5.8 million).

The Administration's FY07 request includes $4.3 million for CDFI to administer the New Market Tax Credits, a 1.4 percent increase over the FY06 appropriation of $4.25 million. The New Market Tax Credits provide credit against federal income taxes to taxpayers making qualified equity investments in designated Community Development Entities in order to attract private capital investments in low-income communities.

The budget request also provides $3.5 million to phase out the existing CDFI portfolio of outstanding obligations from the programs slated for elimination.

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Environmental Protection Agency
The Administration's FY 2007 Environmental Protection Agency (EPA) budget request is $7.3 billion, a 4.07 percent decrease from the FY 2006 appropriation*. The agency's science and technology programs would receive $788.3 million, a 7.86 percent increase over the FY06 appropriation. However, funding for research would decrease by $19.9 million.

More than $100 million is requested in the FY07 budget to support EPA's new priorities in the Energy Policy Act of 2005. Selected highlights include:

The FY07 budget request includes $184 million for EPA Homeland Security efforts, an increase of $55 million over the FY06 appropriation. Funding requests include:

To help promote scientific research, the president's budget request includes:

In addition, the president is requesting an increase of $16.9 million for the Superfund, bringing FY07 total funding to $1.258 billion. The Superfund appropriation includes $27.8 million for science and technology transfer, a decrease of 7.8 percent from FY06.

Other EPA programs of interest include:

*FY06 enacted amounts include a 0.476 percent rescission and additional 1 percent reduction.

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NASA
The FY 2007 budget request for NASA totals $16.8 billion, a 1 percent increase from FY 2006. Included in the FY07 request is $5.3 billion for the Science Mission Directorate, an increase of 1.5 percent from FY06. However, funding for Aeronautics Research decreased 18.1 percent, totaling $724.4 million for FY07.

Of the five directorates, the Exploration Systems Mission Directorate (ESMD) would receive the largest increase at $3.98 billion, a 30.4 percent increase from FY06. Three-fourths of the ESMD FY07 budget, $3.06 billion, is requested for the Constellation Systems Program ­- a net increase of 76.4 percent above the program's FY07 appropriation level, which was 1.73 billion. This includes $894.7 million (6.6 percent increase) to develop and implement the Crew Exploration Vehicle, which will replace the Space Shuttle that is due to retire in 2010.

The Human Systems Research and Technology FY07 budget request is $274.6 million, a 56 percent decrease from FY06. Human Systems Research and Technology supports programs to develop and implement technology critical for supporting long-term human survival and performance during space expeditions.

The third and final component of ESMD is Exploration Systems Research & Technology. The budget request includes $646.1 million (6.7 percent decrease) to support four programs:

In NASA's new budget structure, the Innovative Partnership Program (IPP) and Education both fall under the newly created $491.7 million Cross-Agency Support Programs budget category. The IPP would receive $197.9 million for FY07, a decrease of 7.9 percent from FY06. IPP activities include Technology Transfer efforts ($35.9 million), the Space Products Development (SPD) program ($14.5 million), and SBIR/STTR programs ($114.9 million). SPD operates through 12 Research Partnership Centers located at universities or nonprofit institutions throughout the country. Education programs would receive $153.3 million, a 0.6 percent decrease from FY06. The University Research Engineering & Technology Institutes program is scheduled to expire in FY07, a $21 million decrease from FY06.

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National Science Foundation
The Administration’s FY07 National Science Foundation (NSF) budget request of $6.02 billion reflects an increase of $439 million or 7.9 percent from the FY06 appropriation.

Funding for fixed assets of the nation's research enterprise, such as instrumentation, research facilities, infrastructure and federally-funded R&D centers, receive $1.685 billion in the FY07 request, a 13.2 percent increase above the FY06 plan.

Monies available for grants in fundamental science and engineering, for the centers programs and for capability enhancement are proposed to increase by 6.1 percent to $2.915 billion in FY07.

FY07 budget requests for selected initiatives crossing several NSF directorates include:

Funding for NSF’s centers programs, supported by many state tech-based economic development initiatives as well as NSF, is mixed. While total centers funding would increase by 2.6 percent to $259.78 million, several individual center programs would experience cuts or virtually level funding.

The FY07 budget request for the Directorate for Engineering is $628.55 million, an increase of $47.63 million, or 8.2 percent, more than the FY06 total of $580.92 million. Highlights in addition to the ERCs described above include:

The FY07 budget request for the Education and Human Resources (EHR) Directorate is $816.2 million, an increase of $19.35 million, or 2.5 percent above FY06 appropriations. Highlights include:

Several activities within the EHR Directorate are proposed for budget reductions instead:

The FY07 budget request for the Biological Science Directorate is $607.9 million, 5.4 percent higher than the FY06 budget of $576.7 million. The Emerging Frontiers division, recipient of more than half of the directorate's increase, would see its budget grow 22.7 percent to $99.2 million in FY06 with approval of the Administration's request. The Emerging Frontiers increase would allow expansion of the Frontiers in Integrative Biological Research program, initiation of a new program in theoretical biology and expanded R&D in sensor development.

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Regional Commissions and Authorities
There are five federally established regional commissions and authorities that are dedicated to improving the economic opportunities within specific geographic regions. The Appalachian Regional Commission, Delta Regional Authority and Denali Commission are dependent on annual appropriations. The Northern Great Plains Regional Authority did not receive any new federal funding in FY 2006 or the FY 2007 request. The Tennessee Valley Authority (TVA), the oldest and largest of the five, generates its budget primarily through power generation revenues. TVA still requires the government to approve or set its annual spending level.

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Small Business Administration
The Administration requests $624 million in FY 2007 funding for the Small Business Administration (SBA). Comparison with FY 2006 is challenging due to the disaster loans added to the SBA's authority in FY06. Tech Daily quotes an SBA official as saying the FY07 request "basically would be a straight-line" comparison to the FY 2006 appropriation.

Funding levels for selected activities identified as "core programs" in the agency's press release include:

No FY07 funds were requested for the Program for Investment in Microentrepreneurs (PRIME). The program's last direct appropriations were $2 million in FY06.

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