SSTI Digest

Pennsylvania Governor Tom Ridge has promoted Tim McNulty to the new position of Deputy Chief of Staff for Technology Initiatives.

The Bush Administration's first budget request offers a mixed bag for state, local, and non-profit practitioners and policymakers in tech-based economic development. In research categories, the budget reflects the Administration's research emphasis in defense, biotechnology, and life sciences. The budget also reorganizes the nation's energy research priorities. Most other research categories were held at FY 2001 funding levels or received modest increases or cuts. Most notable exceptions are the Department of Commerce's Advanced Technology Program (ATP) which is slated for a two-year hiatus from funding new projects while the program is reviewed, and the industrial research programs in the Department of Energy's Office of Industrial Technologies. Some discussion of these shifts are presented below.

Research funding levels, with the exception of $150 million in Congressional earmarks, remain relatively flat between FY 2001 appropriations and the President's FY 2002 request. Economic development and Digital Divide programs, on the other hand, take several hits. Selected agency program highlights include:

The total agency budget request is $4.8 billion, $300 million less than the FY 2001 appropriation level. The majority of the reduction is absorbed by elimination of new project funding for the Advanced Technology Program, a 67 percent cut or $30 million for the Technology Opportunities Program, and a $77 million cut in Economic Development Administration programs. Selected Commerce program highlights include:

The Administration budget request calls for a $2.6 billion increase for missile defense alternatives and new technology development. The President plans to increase military research by $20 billion over the next five years. Research, Development, Testing & Evaluation (6.1, 6.2, and 6.3 spending categories) would grow by only two percent in FY 2002, however. The American Institute of Physics reports the final Defense budget request will be released on May 15.

The agency's total FY 2002 budget request of $19.2 billion reflects a drop of 2.3 percent. The DOE science budget would increase to $3.16 billion, representing an increase of one-tenth of one percent. Shifts within the R&D budget reflect the President's priorities in fossil fuel research: $150 million in new matching federal funds will support the Clean Coal Power Initiative. Funding for Biological and Environmental Research, on the other hand, falls by more than eight percent. Energy Conservation research drops 46.3 percent over FY 2001 and funding for Renewable Energy Resources would drop by 36.4 percent, although the Administration has committed to introduce a budget amendment adding $39 million for hydrogen related research and restoring 9 percent of the FY 2001 energy conservation research funding level. An additional $1.2 billion in FY 2004 funding for alternative energy development is promised contingent on royalties from oil and gas drilling in the Artic National Wildlife Refuge.

The Administration's FY 2002 budget request of $7.3 billion is $56 million, or 0.08 percent, higher than the FY 2001 appropriation. Funding for EPA science programs would be cut by $27 million or nine percent. Highlights of specific programs within the science budget include:

The Administration’s budget request includes a 13.8 percent increase of $2.8 billion in biomedical research within the National Institutes of Health. Not to be outdone, the Senate has already passed a budget resolution calling for an additional $700 million in NIH funding for FY 2002.

Total funding for the Community Development Block Grant (CDBG) program is reduced by $9.7 million or 0.3 percent over FY 2001 levels. A new $80 million Community Technology Centers initiative within the CDBG program budget will provide competitive grants to support the development and expansion of technology centers in high poverty urban areas. The budget request says the new centers will enhance the Dept. of Education's Community Technology Centers program and will build off of the 680+ Neighborhood Networks, a community-based HUD program that encourages the development of resource and computer learning centers in privately owned HUD-assisted and/or -insured housing. Budget language has been deleted that required $44 million of CDBG funding go toward initiatives to stimulate investment and encourage economic diversification and community revitalization in distressed neighborhoods.

The Administration's $14.5 billion request for NASA reflects an increase of just under two percent over the FY 2001 appropriations. While funding for the Science, Aeronautics and Technology unit of the budget would grow from $7.067 billion in FY 2001 to $7.192 billion in FY 2002, the distribution of funding across areas within the unit shifts:

NSF would receive $4.47 billion dollars in FY2002, up $56.1 million (or 1.3 percent) from FY2001 under the President’s budget request. S&T highlights are:

The Administration's budget request eliminates the New Markets Venture Capital Program, the New Markets and the Venture Capital Technical Assistance Grants. The programs are designed to increase access to equity capital and technical assistance to women, minorities and to businesses located in low- and moderate-income rural areas and inner cities. The SBA budget also eliminates BusinessLINC, a New Markets initiative linking large and small businesses in mentoring and direct technical assistance relationships. Other potentially technology-relevant highlights include: