Special Federal Budget Issue ­ February 5, 2007
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/fy2008/

Copyright State Science & Technology Institute 2007. 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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SSTI Editorial
FY08 Budget Request: Research Up; Economic Development Down
When one looks beyond the first few pages of many sections of the agencies’ fiscal year 2008 budget request summaries, the mental concept of a television rerun appears. As SSTI staff pored through the budget this week, several found ourselves saying, “Didn’t we read the same thing last year?”

In many cases, we did. And why not? Congress failed to consider most of the president’s budget proposals for FY 2007 when the same political party ruled the executive and legislative branches, so why not float the ideas again when power is split? Could they fare any worse than FY07 when so few budget priorities have emerged?

Now some will say hold on. That could be a little too harsh an assessment of what’s going on in FY07. There are a few highlights this budget go-around:

Which brings us back to the old rerun analogy when we look at the FY08 budget request. NSF, DOE, NIST all would receive increases. Eliminating congressional earmarks from the request is a trick every Administration will use each year in presenting its budget request – maybe this time it will stick.

But the most tired element of the story being retold once again in the FY08 budget request is the idea that the public sector – more specifically, the federal government – does not have much of a role in supporting those elements of an innovation system that occur outside a university research center or federal laboratory. Once again, nearly every federal program that supports state, local and regional TBED strategies, community development and traditional economic development is on the chopping block. The agency summaries below document the continuing attempt to disengage the federal government from its important role as a collaborative TBED partner with states and communities across the country.

The U.S. remains the most innovative country in the world overall when measured on a national level, but innovation does not occur evenly within America. Some regions enjoy above-average rates of technology entrepreneurship, equity capital availability and economic success while others do not. The systems to nurture innovation in some areas of the country may need minor public investments or encouragement to work better. Other regional innovation systems may need major investments or reinvestments as their economic drivers adjust to a global economy.

Increased levels of investment in research, science and engineering such as those outlined in the Administration’s FY08 budget request are important, but so, too, is investing in the programs and initiatives that increase the likelihood of commercial success for the businesses and technology entrepreneurs throughout the country that will commercialize the results of federal research investments.

Just as the federal government is retooling its R&D investments, it is time to rethink the direction and shape of the rest of its innovation investments. Some of the programs mentioned below may be based on outdated approaches to supporting state and regional growth. It may be time for change. That is very likely given that very few federal programs currently provide funding for the kinds of initiatives incorporated into the successful TBED strategies adopted across the country by state and communities working to transform their local economies into global innovation leaders.

Change may be needed, but not by lowering the amount of federal funding invested in regional economic growth as is suggested in the FY08 budget request. Rather, change must come in how the federal government works with its state and local partners toward strengthening regional TBED strategies. That may require fewer pots of federal money with more flexibility for state and local decision makers but they need to be larger pots, not smaller ones.

What remains to be seen is how - and if - Congress responds to the Administration's FY08 request.

A PDF version of this federal budget issue is available at http://www.ssti.org.

Note on Fiscal Year Comparisons: Knowing the amounts of FY08 funding requested for each program or research area is helpful, but knowing how it compares to previous budget levels is more useful. Unfortunately, with the FY07 budget not resolved (see note above), the federal agencies seemed to have as much trouble figuring out how what to compare the FY08 figures to as we did. You'll see below that some agencies used the FY06 appropriations level; some used the Administration's FY07 request. Others used the current FY07 Continuing Resolution, while a final group used the new Continuing Resolution that passed the House last week. We apologize for the confusion that is likely to result. In our summaries, we try to point out the differences.

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Special Initiative: The American Competitiveness Initiative
In fiscal year 2008, President Bush proposes $11.42 billion total to support the American Competitiveness Initiative (ACI) across the National Science Foundation (NSF), Department of Energy’s Office of Science (DOE SC), and the Department of Commerce’s National Institute of Standards and Technology laboratories (NIST). This reflects an overall funding increase of $764 million, or 7.2 percent, above his proposed 2007 ACI Research Budget of $10.66 billion.

As a centerpiece of ACI, the president plans to double, over 10 years, investment in innovation-enabling research across the three federal agencies:

ACI is in its second year, after being introduced during the president's 2006 State of the Union Address (see the Feb. 13, 2006 issue of the Digest). The total 10-year impact is projected to be $86.4 billion.

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Special Initiative: Climate Change
In this year’s State of the Union Address, President Bush announced that his FY 2008 budget request would contain funding to support research to eliminate the projected growth of automobile carbon dioxide emission within 10 years. The key agency in the president’s effort is the Climate Change Science Program (CCSP), which would receive $1.54 billion under the proposed FY08 budget. While stating the area was a priority in the address, the current request is approximately $109 million less than the FY07 request (6.5 percent decrease). Most of the decrease is explained by the White House Office of Science and Technology Policy as being a result of NASA no longer considering its Ground Network and Research Range a part of CCSP.
 
CCSP coordinates the climate change research of 13 departments and agencies, and provides technical summaries of research for policymakers. Agencies that would receive CCSP funding under the FY08 budget include:

In addition, the Climate Change Technology Program (CCTP) would continue to complement CCSP programs by implementing its 2006 Strategic Plan, which identifies priorities for climate technology research. CCTP coordinates R&D programs at several agencies, but its FY08 portfolio has not yet been released.

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Department of Agriculture
The Administration request of $89 billion for the U.S. Department of Agriculture (USDA) budget is predicated on passage of the Administration’s version of the 2007 Farm Bill proposals. As designed, the Administration's 2007 farm bill proposals would spend approximately $10 billion less than the 2002 farm bill spent over the past five years, according to the USDA press release.

Approximately three-fourths of annual USDA budget outlays are for mandatory spending programs such as nutrition assistance, conservation, export promotion and farm commodity programs. The remaining balance of nearly $22 billion is for discretionary spending, which includes all USDA research and TBED-related programs.

The FY08 budget request includes $341 million for the USDA portion of the multi-agency Food and Agricultural Defense Initiative (FADI), an increase of $164 million or 93 percent above the levels in the FY07 Continuing Resolution passed by the House last week [Note: All FY08 comparisons below are with the CR.]

The largest line-item FADI increases within the USDA are for Enhanced Surveillance for Pest Detection/Animal Health Monitoring ($119 million; 37 percent increase) and research within the Agricultural Research Service ($87 million; 156 percent increase).

USDA’s FY08 spending of $82 million would support research for prevention or preparation for a pandemic-level outbreak of highly pathogenic avian influenza.

Tech-based and Traditional Economic Development
Economic development activities are supported through two USDA service agencies: the Rural Business-Cooperative Service and the Rural Utilities Service, both housed within Rural Development.

The bag is mixed for the TBED and economic development program in the two services: a few loan and guarantee programs would receive increases; all other programs would see level-funding, a reduction in spending, or elimination altogether in FY08 as a result of the Administration’s request.

On the growth side is:

No new funding is requested for the Rural Economic Development Loans and the Rural Economic Development Grants programs. Instead the programs are to be financed from repayments from past loans and grants. As a result, spending in two alternate financing programs is expected to increase in FY08. With $33 million (43 percent increase), the loan program would provide zero-percent interest loans to electric and telephone utilities to re-lend for the purpose of financing job creation projects and sustainable economic development within rural areas. The utility is responsible for repaying the loan if the third party defaults.

The Rural Economic Development Grant program FY08 funding of $10 million (the program is expected to receive no funding in the FY07 Continuing Resolution) would support grants to electric and telephone utilities. The programs promote sustainable rural economic development and job creation projects by enabling the selected utilities to establish a revolving loan fund program for local economic development projects.

Other programs of note include: Eliminated Programs
No funding is requested for the Empowerment Zones & Enterprise Community (EZ/EC) Program, nor for a line item entitled “All Other Grants” that the USDA budget document says is estimated to receive $44 million in FY07. The document says two of the programs included in the category are the Rural Business Enterprise Grants (RBEG) and Rural Business Opportunity Grants (RBOG).

The RBEG program provides grants to public bodies, private nonprofit corporations, and federally-recognized Indian tribal groups to finance and facilitate development of small and emerging private business enterprises located in any area other than a city or town that has a population of greater than 50,000 inhabitants and the urbanized area contiguous and adjacent to such a city or town.

RBOGs provide grants to rural areas of “exceptional need” to pay costs of providing economic planning for rural communities, technical assistance for rural businesses, or training for rural entrepreneurs or economic development officials.

In explaining the Administration’s justification for eliminating the two programs, the USDA budget document states, “Both programs have benefited only a limited number of rural communities.” However, immediately preceding the comment, the document reads: “The reduction in performance from 2007 to 2008 is attributable to the elimination of the Rural Business Enterprise and Rural Business Opportunity grant programs.” The projected performance is 19,405 jobs that will not be saved or created in FY08 as a result eliminating the Rural Business-Cooperative Service programs.

So in effect, despite the total budget for the Rural Business-Cooperative Service increasing from $990 million in FY07 to $1.308 billion in the Administration’s FY08 budget request, the service’s performance is expected to decline by nearly 30 percent as a result of eliminating two programs that total 3.4 percent of the budget. Of all service programs, RBEGs and RBOGs are the two most likely to be utilized in a state or local TBED strategy.

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.

The Agriculture Research Service (ARS) is the principal in-house research agency for the USDA, conducting research regarding the U.S. food supply of agricultural products and providing producers with technologies to competitively supply these products. Most ARS activities occur within 100 USDA research facilities. The service would experience an overall reduction of $160 million, most of which is a result of a $124 million cut in the building and facilities line item. That line item includes only $16 million in new spending for planning and design of one new facility, a Biocontainment Laboratory and Consolidated Poultry Research Facility in Athens, Ga.

The research and information portion of the FY08 budget request for ARS is $1.022 billion (11.4 percent increase).

The Cooperative State Research, Education, and Extension Service (CSREES), the federal partner with land-grant and non-land-grant colleges and universities in carrying out extramural research, higher education, and extension activities, would see a modest increase with the Administration’s request if congressional earmarks are not included a comparison to prior year funding levels. Excluding earmarks, the Administration actually has requested a modest $13 million increase for the service -- a total of $1.044 billion (1.4 percent increase).

The Administration’s budget request for CSREES continues to attempt to shift more of academic research from formula grants (such as the Smith-Level 3,890 Research and Extension, McIntire-Stennis and Hatch Act grant programs) toward competitive awards through the National Research Initiative. For example in FY06, formula grants represented 75.2 percent of the total CSREES spending for traditional formula grants and NRI. NRI received the balance of 24.8 percent. In the FY08 request, the shares for those formula grant programs and NRI would be 67.3 percent and 32.7 percent, respectively.

Competition also increases in the proposed shift toward granting funds for multi-state research programs instead of to individual institutions. CSREES is proposing increasing the portion of the $165 million Hatch formula program that is awarded to multi-state research programs from 25 percent to 60 percent. In addition, 38 percent of this set-aside in the Hatch program will be awarded competitively. The $20 million McIntire-Stennis formula program is slated to become entirely funded through competition, with two-thirds of its funds dedicated to multi-state awards.

The Economic Research Service (ERS), at $83 million (10.7 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 majority of the $28 million increase slated for the National Agricultural Statistics Service - $168 million (20 percent increase) would support the 2007 Census of Agriculture. The service also provides the official current statistics on agricultural production and indicators of the economic and environmental welfare of the farm sector.

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Department of Commerce
The Administration's FY 2008 discretionary budget request for the Department of Commerce (DOC) is $6.55 billion, a decrease in discretionary spending of $76 million from the FY06 appropriation. The department’s full-time equivalent staff would increase by 4,700 people between FY06 and FY08.
 
Funding for every DOC program or office supporting state and local TBED and traditional economic development programs would be cut deeply or proposed for elimination.
 
The Economic Development Administration (EDA), the agency charged with promoting regional economic development in distressed communities, would receive $202.8 million. The FY06 appropriation was $280.4 million. The cut would be entirely absorbed in the amount of funds available for grants to communities. FY08 EDA grant funds would decrease by 32 percent over the FY06 appropriation. EDA administrative expenses and staff size, however, would increase by 10 percent and 9 percent, respectively.

In FY 2008, EDA would facilitate the streamlining of its application process into one comprehensive, simplified procedure under the Regional Development Account (RDA) that is easier and quicker for applicants to access. The focus of EDA's programs and eligibility requirements would not change under the new procedure, the RDA would encompass most Economic Development Assistance programs, with the exception of planning grants and trade adjustment funding.
 
The Technology Administration (TA) would be shuttered, transmuting the office of Under Secretary to a single senior advisor in the Secretary’s policy office. The Budget Brief explains the demotion as follows:
“Technological innovation has evolved to a point where it plays a critical role in competitiveness across our entire economy rather than taking place in an isolated sector unto itself. In keeping with this evolution, the President’s FY 2008 Budget proposes to modernize the Department’s approach to technology policy by elevating technology policy activities to the Secretarial level. In place of a stand-alone Technology Administration, the budget proposes to appoint a senior advisor in the Department’s Office of Policy and Strategic Planning and to create a Department-wide Technology Council that will coordinate technology policy activities that are distributed across the Department.”
The TA budget request of $1.56 million to close the office is $4.4 million less than the FY06 appropriation.

The National Institute of Standards and Technology (NIST), presently housed under TA, would receive $640.7 million and would directly report to the Secretary. Of the proposed increases for this agency, $47 million would go toward critical improvements to NIST's internal research laboratories in Boulder, Colo., and the NIST Center for Neutron Research in Gaithersburg, Md. Another $22 million would be used to support research programs in nanotechnology, quantum information science, climate change measurements and standards, disaster-resilience of structures, and earthquake hazard reduction. Other components of NIST include: Funding for the Minority Business Development Agency (MBDA) would be $28.7 million in FY08, a decrease of $940,000 from the FY06 appropriation level. 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 $3.82 billion in FY08 discretionary funding. NOAA components supporting significant research fall under the Operations, Research and Facilities line item, which would receive $2.7 billion. Funding levels for individual components include: Consistent with recent years, the Administration proposes to fund the U.S. Patent and Trademark Office (USPTO) budget exclusively through offsetting fee collections. The request for USPTO is $1.9 billion. The agency promotes the research, development and application of new technologies by protecting inventors’ rights to their intellectual property through the issuance of patents. USPTO would use its FY08 spending authority to reduce application processing time and increase the quality of its products.

The Bureau of Economic Analysis (BEA) within the Economic and Statistical Analysis Administration would receive $85 million. This funding is intended to 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 FY 2008 budget request for the Department of Defense (DoD) totals $481.4 billion, an 11.3 percent increase over FY07. [Note: DoD’s FY07 appropriations bill was one of only two passed before the current fiscal year began. As a result, SSTI is able to provide comparisons between the FY08 request and the FY07 appropriations. Variance between FY08 request and FY07 appropriations is provided in parentheses.]
 
Science and technology in the department does not share the rapid rate of growth, though. As has been the case in every presidential budget proposal since FY02, the Administration’s FY08 request for DoD basic, applied and advanced technology development is less than the prior year appropriation. All stages of R&D are expecting cuts in this year’s budget: the request for basic research has fallen to $1.43 billion (8 percent decrease), applied research has been cut to $4.36 billion (18.6 percent decrease), and the request for advanced technology development has been reduced even more sharply to $4.99 billion (22.4 percent decrease).
 
The proposed reductions would affect all of the armed services and defense-wide R&D programs. Unlike last year, cutbacks in the Army, Navy and Air Force would not be offset by research, development, testing and evaluation (RDT&E) funding increases for offices and agencies outside of the branches of the military, such as DARPA or the Defense Logistics Agency. Most of these agencies would receive reductions or slight increases under the proposed budget. DoD agencies expecting RDT&E cuts this year include: The FY08 funding for DoD departments is as follows:
 
Army Navy Air Force Defense-wide DoD programs of interest to the TBED community include: return to the top of the page

Department of Education
According to the U.S. Department of Education (ED), federal funding represents only 8.9 percent of America’s spending on elementary and secondary education during the 2006-07 school year. That share in FY 2008 would be $56 billion according to the Administration’s budget request for the agency.

As in previous requests, the Administration’s FY08 budget request strives to eliminate a large number of programs, replacing many with a consolidated, but smaller, block grant program. Many of the 44 programs slated for termination address specific fields of study or population groups (e.g., economics education, mentally ill). The largest program on the chopping block, at $770 million, is for Federal Supplemental Education Opportunity Grants, which provides need-based grant aid to eligible undergraduate students to help reduce financial barriers to postsecondary education.

The FY08 education budget includes specialized funding toward several K-12 math and science programs: ED's FY08 budget also would provide $35 million for the 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 critical need languages, such as Arabic, Chinese, Farsi, Hindi, Japanese, Korean, Russian and Urdu.

Other key budget issues include: return to the top of the page

Department of Energy
 The Department of Energy (DOE) budget request for FY 2008 totals $24.3 billion, a 3 percent increase above the FY07 request. Key priorities in the budget are tied to President Bush’s Advanced Energy Initiative, Hydrogen Fuel Initiative, and American Competitiveness Initiative. The initiatives would affect most directly the department’s four energy offices, which together would receive a 20 percent boost in funding under the proposed budget and the Office of Science, which would receive a 7 percent increase. The Office of Fossil Energy and the Office of Nuclear Energy are expecting the biggest gains, at 33 percent and 38 percent, respectively. The Office of Energy Efficiency and Renewable Energy would receive a five percent increase, and the Office of Electricity Delivery and Energy Reliability would see its funding reduced by 8 percent. Advanced Energy Initiative
The FY08 request includes $2.7 billion for the second year of the Advanced Energy Initiative (AEI), an initiative to promote the development of cleaner sources of electricity production. Areas of research targeted for increased support in FY08 include energy research and the commercialization of biomass, hydrogen, solar, cleaner coal and nuclear technologies. The new budget also requests $8.4 million to create an Office of Loan Guarantees to spur the commercial development of new clean energy technologies.

The Office of Energy Efficiency and Renewable Energy (EERE) would receive $1.24 billion under the proposed budget, and would dedicate $756 million to AEI-related projects. EERE conducts research, development and deployment activities to advance energy efficiency and clean power technologies and practices. EERE programs that would receive a boost under the new AEI-related funding include: EERE also would receive $86.5 million to develop technologies to make buildings more energy efficient, and to increase efforts to introduce these technologies to the market. No request has been made for Geothermal or Hydropower activities.
 
The Office of Fossil Energy would receive $427 million to develop clean coal technologies as part of AEI, 29 percent above the FY07 request. The FY07 budget proposes to cancel $149 million in prior-year balances for the Clean Coal Technology program. The budget request states these balances are no longer needed to complete active projects in the Clean Coal Technology program. Instead, $108 million would be transferred to the FutureGen program, and the Clean Coal Power Initiative, both of which conduct similar research to the original program. Clean coal requests include: Office of Fossil Energy R&D overall would receive $567 million. Program Direction would receive relatively flat funding at $129 million. Fossil Energy Environment Restoration R&D would receive $9.5 million. As was the case with the FY07 request, the Administration seeks no funding for the following research areas that Congress continues to fund: The Office of Nuclear Energy would receive $875 million under the proposed budget, $568 million of which would be used to support the Advanced Fuel Cycle Initiative and other activities related to the Global Nuclear Energy Partnership and AEI. Office of Nuclear Energy programs of interest include: AEI funding also would be used to increase basic research into alternative energy under the Office of Science. The office would receive $685 million for a variety of R&D activities and program management. Targeted areas for research include: Hydrogen Fuel Initiative
The 2008 budget includes $309 million through the president’s Hydrogen Fuel Initiative (HFI) to develop practical technologies for powering automobiles with hydrogen power. DOE would be the main vehicle for the initiative, though nine agencies participate in hydrogen research coordinated by the Interagency Working Group on Hydrogen and Fuel Cells under the National Science and Technology Council. Several HFI-funded programs overlap with those of the AEI. HFI programs include: Non-DOE HFI funding in the FY08 budget is requested for the Department of Transportation’s (DOT) Research and Innovative Technologies Administration and the National Highway Traffic Safety Administration. These DOT programs would receive $1 million to develop hydrogen standards and safety technologies.
 
American Competitiveness Initiative
The 2008 request would contribute $4.4 billion to the Office of Science. The Office of Science is the main vehicle for DOE participation in the American Competitiveness Initiative. This year’s budget request would increase the funding for fusion energy science research by 34 percent, while proposing moderate increases for other areas. The request includes: return to the top of the page

Department of Health and Human Services
The lion’s share of the $697.3 billion FY 2008 budget request for the Department of Health and Human Services (HHS) is allocated towards Medicare (55.4 percent) and Medicaid (29.0 percent) spending. Discretionary programs, such as the Food and Drug Administration, Centers of Disease Control and Prevention and the National Institutes of Health (NIH), represent only 9.9 percent of the total HHS budget.
 
Within the Administration for Children and Families, the Administration proposes elimination of four programs related to community and economic development. The largest, Community Services Block Grants ($630 million in FY06), “is unable to demonstrate long-term outcomes,” according to the HHS FY08 budget summary. Community Economic Development, Job Opportunities for Low-Income Individuals, and Rural Community Facilities share a $40 million line item that is zeroed out.
 
The FY08 budget request for the Agency for Healthcare Research and Quality (AHRQ) is $330 million. AHRQ priorities in FY08 are the Personalized Health Care Initiative and the Value-Driven Health Care Initiative. Both work to move innovations more quickly into the care delivery system and more efficiently through greater personalization of healthcare provision.
 
National Institutes of Health
The total NIH FY08 request is $28.86 billion, which the agency anticipates will allow them to award 10,188 new research grants throughout its 27 institutes and centers. About 84 percent of funds appropriated to NIH will be distributed outside of the organization, supporting more than 300,000 scientists and research personnel around the country.
 
There is some difference of opinion regarding how the NIH budget request compares with FY07 figures. The HHS budget summary reports the FY08 request is $232 million higher than FY07. A budgetary analysis performed by the Association of American Medical Colleges argues the FY08 request will result in a cut of almost $500 million (2 percent) in NIH appropriations.
 
Comparing FY07 and FY08 requests for the 27 individual institutes and centers reveals only minor adjustments with the exception of the National Institute of Allergy & Infectious Diseases (NIAID), which would receive a $198 million bump-up.
 
The Office of the Secretary would receive an increase of $33 million to coordinate cross-cutting research projects.
 
Highlighted NIH priorities in FY08 include: The FY08 NIH SBIR/STTR budget for research grants is estimated to total $603 million.

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Department of Homeland Security
The Administration’s FY 2008 budget request for the Department of Homeland Security (DHS) totals $46.4 billion in funding, an increase of 8 percent over the FY 2007 request. The key priority of this year’s request is a $13 billion initiative for border security and immigration enforcement. 
 
The FY08 request provides $799 million for the Science and Technology Directorate, which oversees the department’s research, development, testing and evaluation activities. Last year, the directorate saw its funding request drop by 33 percent, as the Domestic Nuclear Detection Office spun off as a separate DHS office. Even after the reorganization, the FY08 budget cuts an additional $200 million from the directorate’s FY07 request of $1.002 billion.
 
Two Science and Technology programs, however, are expecting new and increased funding in FY08: Other DHS Science and Technologies programs of interest include: The proposed budget also would increase funding for the Domestic Nuclear Detection Office (DNDO), which is cooperating with the departments of State, Energy, Defense, and Justice to implement a comprehensive inter-agency system to detect, report, and respond to nuclear threats. The request includes $562 million for the program, which conducts R&D through the DNDO Office of Transformational Research and Development aimed at enhancing the ability to identify nuclear and radiological materials.
 
The Association of American Universities reports that the FY08 budget includes a $38.7 million request for the department’s University Programs, 20 percent less than the FY07 amount. This funding would be used to support existing DHS Centers of Excellence and establish four new centers for domestic security research at U.S. universities. The new centers include: AAU also reports that several of the seven existing centers may be consolidated.

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Department of Housing and Urban Development
The Administration's FY 2008 budget request for the Department of Housing and Urban Development (HUD) is $36.15 billion (31 percent decrease from the FY06 appropriation level – mostly due to a FY06 supplemental one-time funding for disaster relief). The department’s major priority for FY08 will be increasing home ownership.
 
The office of Policy Development and Research (PD&R) would receive $65 million this year. It would be split between $40 million for the Research and Technology studies and testing and $25 million for University Programs, which provide funds to minority-specialized colleges and universities to form partnerships for revitalization activities with their surrounding communities.
 
Community Development Block Grants
The Community Development Block Grant (CDBG) Fund would experience a $1.14 billion cut between the FY06 appropriation and the FY08 request. The formula grants component would shoulder the largest share of the decrease. Due to the department’s belief that the current funding mechanism has both inefficient and inequitable components, Congress will be asked to authorize a new formula for dispersing CDBG funds this year.
 
The goal of the recalculation is to adapt the program to current demographic trends in order to better assist the needs of the country’s urban cities and counties. Additionally, $200 million in Competitive Challenge Grants will be awarded as “bonus grants” to communities with a plan to target and leverage funds to the most distressed areas within the community.
 
Program Terminations
Within the CDBG account, the $50 million Youthbuild programs would be eliminated and $356 million for the Economic Development Special projects and Neighborhood Initiative Demonstration would be rescinded. 
 
Also, in keeping with FY07 proposals, several other HUD economic development programs would receive no funding in FY08, including the Brownfields Redevelopment Initiative, Rural Housing and Economic Development, Section 108 Loan Guarantees, Community Development Loan Guarantees, and Renewal Communities, Urban Empowerment Zones and Enterprise Communities.

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Department of the Interior
The Administration’s FY 2008 request of $10.705 billion for the Department of the Interior (DOI) represents a decrease of 2.3 percent from the FY06 appropriation. The FY08 figure is 1.7 percent above the president’s FY07 request.
 
In preparation for the National Parks Centennial, the park service will receive the largest budget in its history with $2.1 billion. Indian Affairs, wildfire preparedness, landowner stewardship, rural water, and National Park Service construction bear the majority of the department’s cuts.
 
Research activities within DOI are distributed among many offices and are relatively modest in spending, compared to other agencies discussed in this week’s Digest. Highlights include:
 
US Geological Survey - $975 million (1.2 percent above FY 06 appropriation). Included in the request is an additional $3 million for USGS to begin implementation of the oceans research priorities plan and implementation strategy by conducting observations, research, sea floor mapping and forecast modules. Work on the Ocean Research Priorities Plan and Implementation Strategy will lead to decision-support tools to help policymakers anticipate and prepare for coastal ecosystem and community responses to extreme weather events, natural disasters, and human influences.
 
The request for USGS biological research is $181.1 million, a 1.4 percent increase above the FY06 appropriation. The mammalian population ecology and habitat program and the contaminants studies would experience cuts, offset by an increase for the Healthy Lands Initiative.
 
Land remote-sensing and geologic research would experience a 58 percent reduction over the FY06 appropriation. Most of the reduction is the result of eliminating the $68.9 million Cooperative Topographic Mapping item. In addition, the Priority Ecosystem Science Program would experience a $2 million cut. A $2.6 million reduction to geologic resource assessments in the Minerals Research program is proposed, which will result in a 2008 Minerals Research program of $29.9 million.
 
Miscellaneous DOI Research
Many other DOI research activities also experience cuts, such as the Joint Fire Science Program within the Wildlife Fire Management unit of the Fish & Wildlife Service. The program will shift from conducting new research to implementing research deliverables.
 
Research within the Minerals Management Service experiences decreases of $1 million in Environmental Studies, and $1 million for methane hydrates research. Also within MMS, phase out of the Oil Spill Research Program begins in the FY08 request, decreasing the budget by $500,000 from the FY06 appropriation of $6.9 million.
 
Invasive species research within the Bureau of Reclamation would receive a 9.5 percent cut to $530,000.  Research within the Bureau of Indian Affairs would be cut 51.5 percent to $99,000.

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Department of Labor
The Administration's FY 2008 request for the Department of Labor (DOL) is $10.6 billion in discretionary budget authority, a decrease of $900 million (7.83 percent less) compared to the FY06 appropriation level of $11.5 billion. Compared to the FY06 budget overview, the agency’s payroll would increase by 679 full-time equivalent positions, however.

More than half of the agency's total discretionary budget, $5.6 billion is requested for the Employment and Training Administration (ETA). The ETA's mission is to contribute to the more efficient functioning of the U.S. labor market by providing high quality job training, employment services, labor market information and temporary wage replacement. For a second straight year, the budget continues funding for the Community-Based Job Training Grants initiative at $150 million in an effort to strengthen the links between community and technical colleges and local labor markets, and employers. Building on the High Growth Job Training Initiative, the Community-Based Job Training Grants seeks to prepare workers to take advantage of new and increasing job opportunities in high growth industries and sectors of the U.S. economy.

Similar to the FY07 budget request, the Administration's FY08 budget proposes to consolidate four DOL programs and state grants for basic employment services into a $3.41 billion Career Advancement Accounts (CAAs). This is the third year that the Administration has tried to create a unified grant program by consolidating the WIA Adult, Dislocated Worker and Youth programs and Employment Service state grants. The FY08 consolidated program would be at least $481.8 million under the comparable FY07 total for the programs reported in the DOL Budget in Brief.

Information on any future funding for the Workforce Innovation in Regional Economic Development (WIRED) program was not available at press time.

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Department of Transportation
The Administration's FY 2008 budget request for the Department of Transportation (DOT) is $67 billion. This funding would be distributed across the department's five key strategic objectives - improving safety (30.4%), reducing congestion (54.6%), increasing global transportation connectivity (2.1%), protecting the environment (9.8%) and supporting national security (1.4%) - with the balance of 1.7 percent going toward organizational excellence.
 
As with most other federal agencies, with notable exceptions such as the National Science Foundation and National Institutes of Health, research and TBED programs constitute a very small percentage of DOT’s annual budget. For example, more than one-third of the DOT budget request is dedicated to highway and bridge construction and maintenance.
 
Among budget highlights for the scientific and engineering community is a $175 million request for a 21st century satellite navigation system to replace older air traffic control equipment.

The FY08 request for all research, engineering and development at the Federal Aviation Administration is $140 million, including $91.3 million for continued research on aviation safety issues. The remaining research funding is for reduced congestion and environmental issues.

The FY08 budget request for the Research and Innovative Technology Administration (RITA) includes $12 million for R&D. RITA supports transportation research that cuts across all modes of transportation and promotes innovative transportation technologies, such as hydrogen fuels and remote sensing. In addition, RITA supports the Volpe Center, University Transportation Centers and the Transportation Safety Institute, which conduct research on a reimbursable and fee-for-service basis to other federal agencies and DOT administrations.
 
Under the Federal Highway Administration (FHWA), $410 million is requested for R&D, including an obligation limitation of $429.8 million. FHWA serves, in part, to identify ways to reduce the number of injuries and fatalities on roadways by demonstrating the application of innovative technologies in highway safety.

The National Highway Traffic Safety Administration budget request includes $65.7 million for research activities focused on improving vehicle crashworthiness and crash avoidance.

The FY08 budget request for the Federal Transit Administration consolidates the research and university transportation programs into a single account that would be receive $61 million in FY08. The request is $13 million less than the FY06 appropriation and $4 million less than the FY07 Continuing Resolution passed by the House earlier this month. The FY08 request includes: 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 $148 million.

The Federal Railroad Administration budget request for R&D is $32 million. FRA support research efforts in various areas of rail systems safety and transportation and research development facilities.

Lastly, $3.9 million in FY08 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. Most of them are slated for termination or phase-out in FY 2008.

Treasury requests $24.4 million for the Community Development Financial Institutions Fund (CDFI) Program (21 percent decrease from FY06 appropriation) and $4.12 million to administer the New Market Tax Credits Program (NMTC), a 3.2 percent decrease. The NMTC Program provides 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.

Both the Bank Enterprise Award (BEA) and CDFI Native Initiatives, including the Native American CDFI Assistance (NACA) Program are slated for elimination in the budget. The programs received $13.4 million and $5.8 million in FY06, respectively.

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Environmental Protection Agency
For the Environmental Protection Agency (EPA), the Administration has requested $7.2 billion for FY 2008, a 1 percent decrease from the FY07 request. Under the new budget, Science and Technology activities would receive $754.5 million (4.3 percent decrease). Within S&T, research activities would decrease 2.4 percent to $478.5 million. A few science and technology programs are expected to receive small budget increases this year, however, including Clean Air Research (3 percent increase), Environmental Enforcement Forensics (15 percent increase), and Climate Protection (4 percent increase).
 
Science and Technology programs include: Specific research projects funded by the budget request include: In keeping with the president’s climate change agenda in this year’s budget, climate change programs at EPA would receive $118 million. Some of these programs are: Other EPA programs of interest include: return to the top of the page

NASA
The Administration’s FY 2008 budget request for NASA totals $17.309 billion (3.9 percent increase from the FY06 appropriation) and is distributed across six directorates and offices. Cross-Agency Support Programs
NASA’s Education programs support a variety of science, technology, engineering and mathematics initiatives, with the goal of preparing a future NASA workforce. Examples include Higher Education programs (which includes EPSCoR); Space Grants; Minority Undergraduate Research and Education Project; and the NASA E-Education Project. The F08 request would provide $153.7 million to the theme, a cut of 5.4 percent from the FY06 appropriation level. According to the NASA budget summary, the cut is a redirection of funds “to address higher priority NASA mission requirements.”
 
The Innovative Partnerships Program (IPP) leverages technology and capabilities for NASA through joint partnerships with industry, academia, other government agencies and national laboratories. IPP includes NASA’s SBIR/STTR programs, the IPP Seed Fund, Innovation Incubator, technology transfer and intellectual property management, and new partnership opportunities. With a $198.1 million FY08 budget request, IPP’s funding would decline 7.8 percent from the FY06 appropriation level. Selected FY08 program funding requests include: Science Directorate
The FY08 request would provide $428.5 million for the Earth Science Research Program, which provides competitively awarded grants for basic research and modeling efforts to improve the capability to: document the global distribution environmental parameters related to the Earth's atmosphere, hydrosphere, biosphere, cryosphere and land surface; understand the processes that drive and connect them; and, improve predictive capabilities for the future evolution of the Earth system, including climate, weather, and natural hazards.
 
With a $23.5 million FY08 budget, the Earth Science Education and Outreach Program would seek to make the discoveries and knowledge generated from NASA's Earth-observing satellites and scientific research (including applied science) accessible to students, teachers and the public. The office supports fellowships, new investigators, and science, technology, engineering and mathematics activities.
 
The Heliophysics Research Program, with FY08 funding of $206.1 million, would undertake scientific investigations utilizing operational space-based and suborbital platforms (surface, balloon, aircraft and rocket).
 
The Planetary Science Research Program develops theoretical tools and laboratory data needed to analyze flight data, makes possible new and better instruments to fly on future missions, and analyzes the data returned. The program would receive $370.5 million in FY08.
 
Aeronautics Research Directorate
The Directorate conducts cutting-edge research that produces concepts, tools and technologies that enable the design of vehicles that fly safely through any atmosphere at any speed. The FY08 budget request for the Directorate is $554 million. Significant reductions are planned in the three core research areas of aeronautics safety (50 percent cut from FY06 appropriation), airspace systems (44 percent cut), and fundamental aeronautics (50 percent cut), while an $88.4 million fourth theme, aeronautics testing, is added.

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National Science Foundation
The Administration’s FY 2008 National Science Foundation (NSF) budget request of $6.43 billion represents an increase of nearly $409 million (6.8 percent) above the FY07 request. The large increase is distributed across many research and related activities: FY08 budget requests for selected initiatives crossing several NSF directorates include: NSF Center Programs
Funding for NSF’s centers programs, supported by many state tech-based economic development initiatives as well as NSF, are the principal means by which the NSF fosters interdisciplinary research. The FY08 budget request for these centers is $268.07 million. Engineering Directorate
The FY08 budget request for the Directorate for Engineering is $683.3 million (8.7 percent increase), which represents 42 percent of the total federal support for university-based, fundamental engineering research. Highlights, in addition to the ERCs described above, include: Integrated Activities
The Experimental Program to Stimulate Competitive Research (EPSCoR) was shifted from the Education and Human Resources (EHR) Directorate to Integrated Activities. The EPSCoR budget is proposed to be $107 million for FY08 (7 percent increase) to promote the development of eligible states’ science and technology resources through partnerships involving a state’s universities, industry, government and the federal R&D enterprise.

The Partnerships for Innovation program budget would receive $9.19 million, level funding with the FY07 request, which was a cut of $20,000 from the FY06 appropriation.

Education and Human Resources Directorate
The FY08 budget request for the EHR Directorate is $750.6 million. Highlights include: Biological Sciences Directorate
The FY08 budget request for the Biological Science Directorate is $633 million, compared to $607.85 in FY07 (a 4.1 percent increase). The Directorate’s Emerging Frontiers division would have $99.2 million in allocations (level funding) with approval of the Administration's request. The division contains funds to be contributed towards the creation of two new research centers, $5 million for the Plant Science Cyberinfrastructure Collaborative and $3 million for Center for Research on the Environmental and Health Safety of Nanotechnology.

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Regional Commissions and Authorities
Four federally established regional commissions and authorities dedicated to improving the economic opportunities within specific geographic regions are included in the Administration’s FY 2008 budget request. No funding is requested for the Northern Great Plains Regional Authority, which was created in the 2002 Farm Bill.

The Appalachian Regional Commission, Delta Regional Authority and Denali Commission are dependent on annual appropriations. The Tennessee Valley Authority (TVA), the oldest and largest of the five authorities, generates its budget primarily through power generation revenues. TVA still requires the government to approve or set its annual spending level. return to the top of the page

Small Business Administration
The Administration's proposal sets overall spending for FY 2008 at $814 million for the Small Business Administration (SBA), including $464 million in new budget authority, $329 million in carryover funds for disaster loans, and $21 million in reimbursable revenues.

Funding levels for selected technical assistance programs include:

The president's proposal requests continuation of the Microloan Program on a "zero-subsidy basis" and seeks no funding for the Microloan Technical Assistance. The Program for Investment in Micro-entrepreneurs (PRIME) has also been eliminated, according to a press release by the U.S Senate Committee on Small Business & Entrepreneurship.

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