Kevin Casey & Jon Groteboer, NCURA Region I RADG Meeting, February 26, 2009

1. NCURA Region I RADG Meeting:“Faith , Hope, and Charity: A new administration in Washington, a financial crisis and unprecedented investment losses. What does the future hold for federal research policy and federal and foundation research funding?” WASHINGTON UPDATE Kevin Casey & Jon Groteboer, NCURA Region I RADG Meeting, February 26, 2009

2. The President articulated support for research and universities “The state of the economy calls for action, bold and swift, and we will act - not only to create new jobs, but to lay a new foundation for growth. We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We will restore science to its rightful place, and wield technology's wonders to raise health care's quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age. All this we can do. And all this we will do.” – President Barack Obama, Inaugural address, January 20, 2009

3. $1,000 Stimulus Plans Science Initiatives Economic Recovery Plans Wars and Conflicts $787 $800 $700 $686 $648 $600 $400 $320 $253 $197 $200 $145 $112 $27 $4 $0 TARP American Recovery & Reinvestment Plan Human Genome Project* Manhattan Moon Race Marshall Plan S&L Crisis World War I Korean War Iraq War** Vietnam Stimulus expenditures in historical context Cost of the Stimulus Plans versus the Costs of Selected Science Initiatives, Economic Recovery Plans, and Wars and Conflicts (2008 Dollars in Billions) Dollars in Billions * Human Genome Project includes costs accrued for genomics research between 1990-2003. ** Iraq War costs from beginning of 2008 through July 2008.

4. Impact on federal budget FY09 United States Budget with the Stimulus Plan 100%=$4.3 trillion FY09 United States Budget without the Stimulus Plan 100%=$3.5 trillion Net Interest Stimulus Plan Non-Defense Discretionary Spending Social Security Net Interest Medicare and Medicaid Defense Discretionary Spending TARP and Fannie Mae/Freddie Mac Subsidies Other Mandatory Spending Income Security Source: Congressional Budget Office

5. FY09 Appropriations

6. Trends in Federal Science Appropriations, FY04 – FY09Nominal Year-to-Year Changes as a Percent for Select Federal Science Agencies * FY09 Omnibus figures released February 23, 2009

7. American Recovery & Reinvestment Plan • President Obama signed the two-year, $787 billion economic stimulus package into law on February 17. The bill makes significant investments in biomedical research and the physical sciences and marks a notable acknowledgement by Capitol Hill of the critically important role university-based research plays as an economic driver and catalyst for solving public sector challenges.

8. Breakout of how the new money will be allocated among a number of major federal sponsors ofresearch at Harvard • National Institutes of Health • • Receives $10.4 billion overall • $8.2 billion to the Office of the Director • $7.4 billion to the Institutes, Offices and the Common Fund • $800 million for the Office of the Director • $1.3 billion to the National Center for Research Resources • $1 billion for competitive construction and renovation awards of extramural research facilities • $300 million for shared instrumentation and capital research equipment • $400 million for comparative clinical effectiveness research (transferred from the Agency for Healthcare Research and Quality) • $500 million for intramural facilities construction and renovation

9. Breakout of how the new money will be allocated among a number of major federal sponsors ofresearch at Harvard National Science Foundation • Receives $3 billion overall o $2.5 billion for research and related activities 􀂃 $300 million for major research instrumentation o $200 million for academic research facilities modernization o $400 million for major research equipment and facilities construction The NSF is directed to submit a spending plan detailing its intended allocation of funds within 60 days of the enactment of the bill. Department of Energy • Receives $2 billion overall o $1.6 billion for the Office of Science o $400 million for ARPA-E

10. Breakout of how the new money will be allocated among a number of major federal sponsors ofresearch at Harvard NASA • Receives $1 billion overall o Science: $400 million 􀂃 To accelerate the development of the tier one set of Earth science climate research missions recommended by the National Academies’ Decadal Survey 􀂃 To increase the agency’s supercomputing capabilities o Aeronautics: $150 million o Exploration: $400 million o Cross-agency: $50 million NASA is directed to submit a spending plan detailing its intended allocation of funds within 60 days of the enactment of the bill.

11. Timeline - Milestones at a glance • FEBRUARY 2009 • - 13th: H.R. 1 passed by the House of Representatives; H.R. 1 passed by the Senate • 17th: H.R. 1 signed into law, and site goes live • 19th: Federal Agencies to begin reporting their formula block grant awards • MARCH 2009 • 3rd: Federal Agencies to begin reporting use of funds • Dialogue between agencies and OMB continues on government-wide requirements for obligating funds • MAY 2009 • - 3rd: Federal Agencies to make Performance Plans publicly available and will begin reporting on their allocations for entitlement programs • - 15th: Detailed agency financial reports to become available • - 20th: Federal Agencies to begin reporting their competitive grants and contracts • JULY 2009 • 15th: Recipients of Federal funding to begin reporting on their use of funds • SEPTEMBER 2010 • -Funding authority expires

12. What reporting will be collected from recipients of Federal funding for reporting on Recovery.gov? As required by Section 1512 of the Recovery Act and this guidance, each recipient, as described above, is required to report the following information to the Federal agency providing the award 10 days after the end of each calendar quarter, starting on July 10th. These reports will include the following data elements, as prescribed by the Recovery Act: (1) The total amount of recovery funds received from that agency; (2) The amount of recovery funds received that were obligated and expended to projects or activities. This reporting will also included unobligated Allotment balances to facilitate reconciliations. (3) A detailed list of all projects or activities for which recovery funds were obligated and expended, including-- (A) The name of the project or activity; (B) A description of the project or activity; (C) An evaluation of the completion status of the project or activity; (D) An estimate of the number of jobs created and the number of jobs retained by the project or activity; and (E) For infrastructure investments made by State and local governments, the purpose, total cost, and rationale of the agency for funding the infrastructure investment with funds made available under this Act, and name of the person to contact at the agency if there are concerns with the infrastructure investment. (4) Detailed information on any subcontracts or subgrants awarded by the recipient to include the data elements required to comply with the Federal Funding Accountability and Transparency Act of 2006 (P.L. 109-282), allowing aggregate reporting on awards below $25,000 or to individuals, as prescribed by the Director of OMB.

13. $0 -$161 -$248 -$400 -$318 -$455 Dollars in Billions -$800 -$1,200 -$1,233 -$1,404 Actual Projection -$1,600 2005 2006 2007 2008 2009 2010 Deficits pose a challenge for programs not supported through the stimulus plan United States Budget Deficit 2005-2010 “The question we ask today is not whether our government is too big or too small, but whether it works - whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified. Where the answer is yes, we intend to move forward. Where the answer is no, programs will end. Those of us who manage the public's dollars will be held to account - to spend wisely, reform bad habits, and do our business in the light of day - because only then can we restore the vital trust between a people and their government.” – President Barack Obama Source: Congressional Budget Office

14. The President’s plan for renewing science and innovation • Restoring integrity to U.S. science policy • Doubling over a 10 year period the federal investment in basic research • Making a national commitment to science education and training • Encouraging American innovation to flourish • Addressing the “grand challenges” of the 21st century through accelerating the transition to a low-carbon, oil-free economy, enabling all Americans to live longer and healthier lives, and protecting our country from emerging threats to our national security.

15. Investing in research strengthens the economy • “Research is the basis of virtually every improvement in health and medicine. The impact of scientific research, however, extends far beyond disease. Throughout history, advances in science and technology strengthened our economy, raised our standard of living, enhanced our global leadership, and lengthened and improved our lives.” –Elias Zerhouni, Former Director of NIH • “A variety of studies have concluded that between 50 and 85 percent of the growth in America’s Gross Domestic Product over the past half-century has its root in advancements in science and engineering. Correspondingly, it has been estimated that two-thirds of the increase in productivity in America in recent decades is also attributable to advancements in science and engineering.” – Norman Augustine, Retired Chairman & CEO, Lockheed Martin Corp

16. “NIH pays real dividends…” • In FY07, NIH awarded approximately $22.846 billion in grants and contracts to universities and other research institutions in 50 states. • The value of NIH state awards ranged from $3.493 billion (California) to $7 million (Wyoming) • Seven states received more than $1 billion in funding from NIH: California ($3.493 billion), Massachusetts ($2.339 billion), New York ($2.005 billion), Maryland ($1.566 billion), Pennsylvania ($1.436 billion), Texas ($1.128 billion), and North Carolina ($1.088 billion) • NIH funding creates jobs and supports wages. • In fiscal year 2007, NIH grants and contracts created and supported more than 350,000 jobs that generated wages in excess of $18 billion in the 50 states. The average wage associated with the jobs created was $52,000. • NIH funding stimulates business activity. • In FY07, every $1 million that NIH invested generated $2.21 million in new state business activity. • An overall investment of $22.846 billion from NIH generated a total of $50.537 billion in new state business activity in the form of increased output of goods and services. Source: “Inside Your Own Backyard: How NIH Funding Helps Your State’s Economy, 2008”

17. NSF Investments create Economic Benefits and Jobs • NSF invests 94% of its budget directly into support for research at universities and colleges, in all 50 states. Much of this leads directly to job creation in the short-term, and innovation in the long-term. NSF supports over 2,000 institutions and reaches nearly 200,000 researchers, postdoctoral fellows, trainees, teachers, and students every year. • Various studies have shown increased economic activity (wages paid) of about 2.5 dollars for every dollar of NSF investment, with associated tax revenue benefits to state and federal governments. Thus, a $600 million increase in NSF’s budget eventually will result in approximately $1.5 billion in added economic activity to the U.S. economy. • Roughly 200 direct and indirect jobs are created at universities and research institutions for every $1 million invested by NSF. So, $1 billion translates into 200,000 new jobs (both direct and indirect). Source: AAU White Paper, February 2009

18. Role beyond the sciences • “The common thread linking these challenges is the fundamental reality that in the 21st century, our destiny is shared with the world’s from our markets to our security. From our public health to our climate, we must act with that understanding that now more than ever, we have a stake in what happens across the globe.” -- President Barack Obama • “The fate of our nation and the future of our children will be forged in the crucible of these global challenges. America cannot solve these crises without the world, and the world cannot solve them without America.” -- Hillary Clinton, Secretary of State

19. Health care reform poses a challenge to the new administration • In charting a new fiscal course, we need to be clear in diagnosing the problem. The single most important thing we can do to improve the long-term fiscal health of our nation is slow the growth rate in health care costs.  Health care is the key to our fiscal future. So to my fellow budget hawks in this room and in the rest of the country, let me be very clear: health care reform is entitlement reform. The path of fiscal responsibility must run directly through health care.   -- Peter R. Orszag, OMB Director • “It is estimated 75% of today’s healthcare expenditures relate to chronic diseases. The emergence and consequences of chronic conditions -- like obesity, diabetes, or Alzheimer’s disease -- are examples of the challenges we face. Healthcare costs are rising exponentially. We must continue our focus on not only how we best deliver healthcare, but more importantly, what healthcare we deliver.” --Elias Zerhouni, Former Director of NIH

20. The health care challenge: closing thoughts “We cannot afford to stand still—the demographics are against us. There is an impending increase in cancer due to the baby boomers aging into their cancer-prone years, which has been referred to as an impending tsunami…. But unlike a real tsunami, which comes unexpectedly with no time for preparation, we are well aware of this impending crisis. And we know that the Congressional investment in basic and cancer-focused research has positioned the cancer research community to make more rapid progress in translating basic discoveries into the diagnosis, treatment, and eventually, prevention of cancer. We owe it to the public to capitalize on these investments…. We are all in this together.” -- Joan Brugge, Cancer Researcher