Federal R&D Shows Real Dollar Drop

Whichever version of the H.R. 1, the American Recovery and Reinvestment Act (ARRA), emerges from conference committee would provide a significant reversal to the direction spending has gone for the past four years for federal research and development, based on data released by the National Science Foundation during the past week.  From FY 2005 through FY 2008, federal R&D obligations decreased 7.8 percent in constant dollars. Between FY07 and FY08 alone, total federal R&D spending dropped $3.5 billion or 4.8 percent of the $116.7 billion total in FY07 once adjusted for inflation.

In constant 2000 dollars, projected obligations for FY08 approximate the FY03 spending levels.  Potentially more troubling for sustaining the nation's innovation edge are the disproportionate drops in basic and applied research versus development. Basic research spending in constant dollars has not been as low as FY08 levels since FY2002; applied research levels set innovation back to 2001.

Federal investment in R&D plant for each of the three fiscal years 2006, 2007, and 2008 are the three lowest years of investment, in constant dollars, since at least 1990, the earliest year presented in the NSF issue brief.

ARRA would provide what could be a one-time reversal of these trends if the increases are not sustained in the final FY09 budget or in the Obama Administration's first budget request, which will be for FY10.

The NSF Issue Brief, FY 2008 Data Show Downward Trend in Federal R&D Funding (NSF 09-309), also breaks down spending trends by agency for the three most recent fiscal years. The report is available online at: http://www.nsf.gov/statistics/infbrief/nsf09309/?govDel=USNSF_178.