FY13 Federal Budget Request Overview

Each year, SSTI provides Digest readers with a comprehensive review of technology-based economic development spending in the the president's federal budget request. The year's edition includes proposed FY13 spending on R&D, STEM education, manufacturing, broadband, small business support, technology transfer, entrepreneurship, innovation workforce initiatives and more. The full report is available for download in pdf format (561 kb).

President Barack Obama's FY13 budget request includes few major changes from FY12 due to the spending cap agreed upon in the Budget Control Act. Funding for most, but not all, TBED-related programs would maintain nearly level funding. The White House is accentuating the budget's generous support for advanced manufacturing, clean energy and STEM education, and again is asking that the R&D tax credit be made permanent.

Comparisons to the previous year's funding level are made against the FY12 budget as enacted, unless otherwise noted.

Entrepreneurship, Regional Innovation and Capital Access
Funding for Economic Development Administration programs would be $182 million (17.3 percent decrease) under the proposed budget. A new initiative, Regional Innovation Strategies, would receive $25 million to encourage regional clusters and innovation and to administer the i6 and Jobs Accelerator Challenges. Funding for EDA's other TBED-related grant programs includes:

• Economic Adjustment Assistance — $65.2 million (17 percent increase)
• Partnership Planning — $27 million (6.9 percent decrease)
• Trade Adjustment Assistance — $15.8 million (0.3 percent decrease)
• Technical Assistance — $12 million (3.9 percent decrease)
• Research and Evaluation — $1.5 million (2.4 percent decrease)

The Small Business Administration's (SBA) Regional Innovation Clusters program, which supports a number of public-private partnerships to promote development in tech-based industries across the country, would receive $3.4 million (30 percent decrease).

The Department of Treasury's New Markets Tax Credit program would be allocated $7 billion in credit authority to help attract private sector capital to low-income communities. A portion of these credits would be reserved for a Manufacturing Communities Tax Credit, which would focus on investment in communities affected by military base closures or mass layoffs.

The budget would make up to $16 billion available in Section 7(a) loan guarantees through SBA, including $13.7 billion in term loans and $2.3 billion in revolving lines of credit. The two SBA Small Business Investment Company (SBIC) programs associated with the Startup America initiative both would have $200 million in debentures to assist high-potential companies. This includes the Impact Investment Fund, which provides a match for private investment capital in underserved communities, and the Early Stage Innovation Fund, which matches private investment capital for early stage seed funds.

Manufacturing
The administration has emphasized the importance of advanced manufacturing in the proposed budget, claiming $2.2 billion in support for manufacturing research and development. This figure includes, among other investments:

• DOE Office of Energy Efficiency Advanced Manufacturing program - $290 million (150.9 percent increase over the former Industrial Partnerships program)
• NSF Advanced Manufacturing program - $148.9 million (35.5 percent increase)
• NIST Advanced Manufacturing Consortia program - $21 million (new program)

In addition, the budget would provide $1 billion for a new National Network for Manufacturing Innovation, administered as a collaboration among NIST, NSF and the Departments of Defense and Energy. The effort would support manufacturing technology commercialization and support local manufacturing ecosystems.

The Hollings Manufacturing Extension Program (MEP) would receive $128 million, a 2.3 percent decrease that would not affect MEP Center Renewals in FY13.

Science and Technology
The budget would provide only minimal increases for the federal government's key science agencies. A release from the Office of Science and Technology Policy notes that the budget includes $140.8 billion for research and development across all agencies, almost the same as FY12. While the White House is still committed to the goal of doubling the budgets of the National Science Foundation, the Department of Energy (DOE) Office of Science, and National Institute of Standards and Technology (NIST) laboratories over the next decade, the budget increases requested for those agencies in FY13 fall short of the seven percent needed to achieve that goal.

While funding essentially would stay level for the major science agencies, several smaller research agencies would receive significant increases. NIST Scientific and Technical Research and Services would receive an $81 million increase for new initiatives, including $45 million for advanced manufacturing research. ARPA-E would receive an additional $75 million to increase its research on transportation systems, stationary power and clean energy. The Department of Agriculture's (USDA) Agriculture and Food Research Initiative would expand its renewable energy and nutrition studies.

Research agency highlights include:

• National Institutes of Health — $30.7 billion (>0.1 percent increase from FY12 estimated)
• National Science Foundation — $7.4 billion (4.8 percent increase from FY12 estimated)
• DOE Office of Science — $5 billion (2.4 percent increase)
• NASA Science — $4.9 billion (3.2 percent decrease)
• Defense Advanced Research Projects Agency — $2.8 billion (negligible increase)
• Environmental Protection Agency Science and Technology — $807.2 million (1.7 percent increase)
• NASA Space Technology — $699 million (21.8 percent increase)
• NIST Scientific and Technical Research and Services — $648 million (14.3 percent increase)
• DHS Research, Development and Innovation — $478 million (79.8 percent increase)
• Advanced Research Projects Agency-Energy — $350 million (27.3 percent increase)
• USDA Agriculture and Food Research Initiative — $325 million (23.1 percent increase)

Funding for multi-agency initiatives includes:

• Networking and Information Technology Research and Development - $3.8 billion (1.8 percent increase)
• U.S. Global Change Research Program - $2.6 billion (5.6 percent increase)
• National Nanotechtechnology Initiative - $1.8 billion (4.1 percent increase)

STEM Education
The new Effective Teaching and Learning: STEM program would replace the Department of Education's (ED) current Mathematics and Science Partnerships program. Within the program's $149.7 million allocation, $80 million would be used for STEM teacher and leader training and professional development in support of the president's goal of preparing 100,000 STEM teachers over the next decade. Another $30 million in ED funding, together with $30 million from the National Science Foundation boost government efforts to support STEM education.

The budget includes funding for the Community College to Career Fund, a three-year, $8 billion collaboration between the Departments of Labor (DOL) and Education (ED). The initiative would support state and community college partnerships with businesses that deliver training in emerging fields such as healthcare, clean energy and advanced manufacturing. Grants from this fund would help expand training and internships in local, high-need areas and launch a nationwide, online entrepreneurship course. In FY13, both DOL and ED would contribute $1.3 billion to the effort.