The Federal R&D Budget: Process and Perspectives Matt Hourihan November 17, 2014 For the AAAS S&T...
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Transcript of The Federal R&D Budget: Process and Perspectives Matt Hourihan November 17, 2014 For the AAAS S&T...
The Federal R&D Budget: Process and Perspectives
Matt HourihanNovember 17, 2014For the AAAS S&T Policy Leadership Seminar
AAAS R&D Budget and Policy Programhttp://www.aaas.org/spp/rd
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 Put another way: budgeting is a manifestation of politics Negotiation between competing 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
Two Spending Categories: Discretionary vs. Mandatory
Mandatory Spending (aka Direct Spending) Mostly entitlements, mostly on “autopilot” Potential for high political sensitivity = “third rail”
Discretionary Spending: Adjusted annually Easy (nondefense) targets?
i.e. Sequestration Vast majority of federal R&D is discretionary
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)B
udge
t R
elea
se
Oct Nov Dec J an Feb Mar Apr May J un J ul Aug Sep Oct Nov Dec J an Feb Mar Apr May J un J ul Aug Sep
Phase 1: Planning within Agency w/ OMB and OSTP oversight
Phase 2: OMB Review
Phase 3: Congressional budget and appropriations
Bud
get
Rel
ease
Oct Nov Dec J an Feb Mar Apr May J un J ul Aug Sep Oct Nov Dec J an Feb Mar Apr May J un J ul Aug Sep
Phase 1: Planning within Agency w/ OMB and OSTP oversight
Phase 2: OMB Review
Phase 3: Congressional budget and appropriations
The Federal Budget Cycle
Phase 1: Internal agency discussions and planning Strategic plans, staff retreats, program assessments More bottom-up than top down
OMB is present throughout Early spring: guidance memo Science & Tech: Joint guidance memo from OMB / OSTP (midsummer)
Agencies deliver budget justifications to OMB (early fall)
What Drives Presidential R&D Budget Formulation?
Top-down and bottom-up priorities and politics OMB oversight and OSTP
input
Technical and political judgment
Expert and community input
Congressional legislation Big (fiscal) picture Incrementalism
One Example The Human Genome Project
Science community takes early interest in sequencing
Senior DOE Science personnel conceive plan, work their way up the hierarchy:Elicit support from DOE superiors, OMBEndorsements, guidance from advisory panels,
other outside expertsAppropriators and authorizers on board
Separately and slightly behind, NIH sets up its own program Interagency rivalry evolves to collaboration
Bud
get
Rel
ease
Oct Nov Dec J an Feb Mar Apr May J un J ul Aug Sep Oct Nov Dec J an Feb Mar Apr May J un J ul Aug Sep
Phase 1: Planning within Agency w/ OMB and OSTP oversight
Phase 2: OMB Review
Phase 3: Congressional budget and appropriations
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
Administration R&D Priorities Department of Energy: NNSA, renewables and efficiency, ARPA-E Neuroscience NASA: industry partnerships Transportation: highways and high-performance rail Extramural ag research Advanced Manufacturing Environmental research?
COMPETES Agencies: $11 billion for R&D (+1% from FY14) Treading water Research budget hit?
(not really)
Bud
get
Rel
ease
Oct Nov Dec J an Feb Mar Apr May J un J ul Aug Sep Oct Nov Dec J an Feb Mar Apr May J un J ul Aug Sep
Phase 1: Planning within Agency w/ OMB and OSTP oversight
Phase 2: OMB Review
Phase 3: Congressional budget and appropriations
The Federal Budget Cycle
Phase 3: Congress gets involved Receives and reacts to President’s budget, holds hearings IN THEORY: Approves budget resolution (simple
majority) 302(b) allocations to the 12 appropriations subcommittees
The Budget Resolution
Overall spending framework
Discretionary spending figure is divvied up by appropriations committees
Budget resolution is a political document (which is why they
can’t seem to pass one?)
Bud
get
Rel
ease
Oct Nov Dec J an Feb Mar Apr May J un J ul Aug Sep Oct Nov Dec J an Feb Mar Apr May J un J ul Aug Sep
Phase 1: Planning within Agency w/ OMB and OSTP oversight
Phase 2: OMB Review
Phase 3: Congressional budget and appropriations
The Federal Budget Cycle
Approps committees write/approve 12 appropriations bills Bills have to pass both chambers Differences are resolved in conference committee Can be filibustered
“President proposes, Congress disposes”
Congressional Budget Decisions “All politics is local” Distributed responsibility:
Nine subcommittees responsible for at least $1 billion of R&D
No concerted assessment of full R&D portfolio
Limited avenues for formal S&T advice
Concerns over balance, duplication, competitiveness, role of government
Reactive; incrementalism? The “Annual Miracle”
More examples… Dept of Agriculture research grants
USDA research regular source for earmarks Outside calls for increased competitive grants
(versus formula funds) over 30+ years Competitive programs phased in slowly
Health Research and Congress DOD health program: breast cancer advocacy NIH doubling was a Congress-led initiative
Authorizations vs. Appropriations Authorization
Creates and modifies programs Sets funding ceilings Under the jurisdiction of the topical legislative committees
Appropriations Permits funding (power to incur obligations) Under jurisdiction of Approps Committees Can be multiyear or advance appropriations (i.e.
Veterans) >$250 million in unauthorized appropriations in 2012 (per
CBO)
House
BudgetCmte
Senate
The Federal Budget Cycle
Gov’t is working on 3 budgets at any given time. Right now: FY 15 “started” FY 16: OMB passbacks should arrive soon…? Some starting to think about FY 17? (though focus is on FY 15-
16)
FY 2015
FY 2016
Bud
get
Rel
ease
FY 2017
Bud
get
Rel
ease
Oct Nov Dec J an Feb Mar Apr May J un J ul Aug Sep Oct Nov Dec J an Feb Mar Apr May J un J ul Aug Sep
Phase 4: Spend the Fiscal Year Budget
Phase 2: OMB Review
Phase 3: Congressional budget and appropriations
Phase 1: Planning within Agency w/ OMB and OSTP oversight
Phase 4: Spend the Fiscal Year Budget
Phase 2: OMB Review
Phase 3: Congressional budget and appropriations
Looking ahead… Omnibus negotiations underway Discretionary spending in FY 2015
has already been agreed 21% of sequester reductions
rolled back But 302(b)s to be determined Beyond FY 2015: back to
sequester levels; debt limit
Big-picture fiscal challenges remain largely unchanged
Can R&D stay ahead of the curve?
60%
70%
80%
90%
100%
110%
120%
Dept. ofDefense S&T
Commerce,Justice,Science
Energy &Water
Agriculture Interior andEnvironment
Labor, HHS,Education*
FY 2015 R&D Appropriations by Select Spending BillEstimated funding as a percent of FY 2012, in constant dollars
2012 2013 2014 2015 Request 2015 House 2015 Senate
*Not yet introduced in House. Source: AAAS analyses of agency budget documents and appropriations bills and reports. FY 2014 figures are current estimates. R&D includes conduct of R&D and R&D facilities. © 2014 AAAS
$70
$75
$80
$85
$90
$95
$100
$105
$110
Federal S&T Spending Under Various Scenariosbillions of constant 2014 dollars
Actual Spending (BA) Actuals Minus Recovery Act Original BCA/ATRA CapsPost-Sequestration Ryan/Murray Deal Changes Constant as a Share of GDPPresident's Request
*2014 figures are current estimates."Federal S&T" here includes nondefense R&D; Department of Defense S&T spending ,including health research; and NNSA R&D. Source: AAAS R&D reports and analyses of agency and legislative budget documents. GDP figures and deflators are from the FY 2015 request. R&D includes conduct of R&D and R&D facilities. © AAAS | October 2014
For more info…
202-326-6607
www.aaas.org/spp/rd/