The Federal R&D Budget: Process and Perspectives

1. The Federal R&D Budget: Process and Perspectives Matt Hourihan October 27, 2016 AAAS R&D Budget and Policy Programhttp://www.aaas.org/program/rd-budget-and-policy-program

2. The Federal Budget is Kind Of a Big Deal • “Politics is who gets what, when, and how.” - Harold Lasswell • “Budgeting is about values, and it’s about choices.” – Rep. Rosa DeLauro • Every dollar in the budget has its claimants! • The budget process represents negotiation between competing values and interests (and their proxies) in a decentralized system • Major impact for R&D and innovation: most basic research, and most university research, is federally funded

5. A Typical Federal Budget Process:Three Years, Four Phases Phase 4: Execute the fiscal year’s budget (not shown) Arranged by fiscal year (October to September)

6. The Federal Budget Cycle • Phase 1: Internal agency discussions and planning • Strategic plans, staff retreats, program assessments • OMB is present throughout • Agencies deliver budget justifications to OMB (early fall)

7. Agency Budgeting Coordination and Top-Down Guidance One Agency’s R&D Budget Decentralized planning and scientific input

8. The Federal Budget Cycle • Phase 2: OMB performs multi-stage review, responds to agencies (“passbacks”) • Agencies and agency heads can and do negotiate • Budget proposals are finalized in January • President presents the proposed budget to Congress early February

10. The Federal Budget Cycle • Phase 3: Congress gets involved • Receives and reacts to President’s budget, holds hearings • Approves budget resolution (simple majority) • Writes and passes appropriations

11. And many others… • Also revenue (tax) committees (House Ways and Means, Senate Finance)

12. Budget Committees

13. The Budget Resolution Established by 1974 Congressional Budget Act Overall framework Discretionary spending Also revenue, deficit, and total spending targets Also non-binding recommendations from majority Isn’t law and can’t change law, but can set up reconciliation instructions The budget resolution is a politicaldocument (and therefore, often not passed!)

15. Appropriations Committees

16. From Budget to Appropriations Committees • Budget Resolution limits  Approps Committees  Subcommittees [302(b) allocations] • These caps remain in place all the way to floor, but can be revised as needed • Twelve Appropriations Subcommittees • Eight subcommittees responsible for at least $1 billion of R&D • Approps led by “Cardinals” • Committee Chairs: Rep. Hal Rogers (KY), Sen. Thad Cochran (MS) • Ranking Members: Rep. Nita Lowey (NY), Sen. Barbara Mikulski (MD) • Appropriators will often have their own priorities • Parochial; national interest (health, security, competitiveness, etc); governance • “President proposes, Congress disposes”

17. Defense • Over $500 billion • Tradeoffs: balancing force modernization, readiness, personnel costs, RDT&E (and medical research) • Offset Strategy • War funding

18. Energy & Water • ~$40 billion • Tradeoffs: Balancing basic research and facilities, DOE technology portfolio, NNSA; also Army Corps, Bureau of Reclamation • Highly partisan debates over energy technologies (renewables vs. nuclear vs. fossil) • Have mostly embraced new research and innovation models at DOE

19. Labor, HHS, Education • >$150 billion • Deep divisions – especially Obamacare • Usually one of the hardest to pass, thus usually one of the last out of the gate • Everybody likes NIH lately • Especially Alzheimer’s research • Cancer moonshot? • Success rates?

20. Commerce, Justice, Science • ~$55 billion • Tradeoffs: Balancing Depts. of Justice and Commerce, NASA, NSF • NSF: social and geo science funding? Facilities? • NASA: planetary exploration, climate research, human spaceflight (and where do we fly to?) • Commerce: NOAA climate research and NIST industrial technology programs can be controversial

21. Agriculture • ~$20 billion • Funds most USDA (but not Forest Service); also FDA • Balancing between conservation, public assistance, food safety • Research activities often take secondary prominence • Fragmented? Formula funds or competitive grants? • Once a big source of pork via earmarks

22. Interior & Environment • ~$30 billion • Includes: Dept. of the Interior, EPA; also Forest Service; small bit goes to NIH • Another divisive bill: environmental protection, land use, emissions regulation, wildfire management and response • Again, science funding tends to take secondary prominence (U.S. Geological Survey, EPA S&T)

23. Other Legislative Appropriations Tools • Continuing Resolutions • …with depressing regularity • Uncertainty? New starts? • Omnibus • Or minibus, or megabus, or cromnibus, or… • Supplementals • i.e. Zika, Ebola, Hurricane Sandy • Also war funding • Not subject to spending caps

24. The Federal Budget Cycle • Gov’t is usually working on 3 budgets at any given time

25. Looking Ahead • Good approps progress but regular order broke down, because of course it did • CR through Dec. 9 • Included Zika funding • And full-year MilCon • Next: omnibus (?) negotiations, to lead to legislation in late fall • March: Debt ceiling. Ugh. • FY 2018: Sequester-level spending returns, maybe

31. For more info… mhouriha@aaas.org 202-326-6607 @MattHourihan http://www.aaas.org/program/rd-budget-and-policy-program