Federal R&D spending to rise by 4.8 percent; defense dominates

Issues in Science and Technology, Winter 2005

The federal R&D budget for fiscal year (FY) 2005 will rise to $132.2 billion, a $6 billion or 4.8 percent increase over the previous year. Eighty percent of the increase, however, will be devoted to defense R&D programs, primarily for weapons development. The total nondefense R&D investment will rise by $1.2 billion or 2.1 percent to $57.1 billion, better than the 1 percent increase overall for domestic programs but far short of previous increases.

Perhaps the biggest surprise was a cut in the budget of the National Science Foundation (NSF). This comes just two years after Congress approved a plan to double the agency's budget over five years.

Most R&D funding agencies will see modest increases in their budgets. The National Institutes of Health (NIH) budget will increase by 2 percent. Although the National Aeronautics and Space Administration (NASA) budget will increase by 4.5 percent to $16.1 billion, the bulk of the increase will go to returning the space shuttle to flight, leaving NASA R&D up just 2 percent.

There are some clear winners in the nondefense R&D portfolio. U.S. Department of Agriculture (USDA) R&D received a 7.8 percent boost to $2.4 billion because of new laboratory investments and R&D earmarks. R&D in the National Oceanic and Atmospheric Administration will climb 10.7 percent to $684 million because of support for the U.S. Commission on Ocean Policy's recommendation to boost ocean R&D. The National Institute of Standards and Technology's (NIST's) support of its intramural laboratory R&D will increase 16.2 percent to $328 million. NIST's Advanced Technology Program won another reprieve from administration plans to eliminate it.

R&D earmarks total $2.1 billion in FY 2005, up 9 percent from last year, according to an American Association for the Advancement of Science analysis of congressionally designated, performer-specific R&D projects in the FY 2005 appropriations bills. Although these projects amount to only 1.6 percent of total R&D, they are concentrated in a few key agencies and programs. Four agencies (USDA, $239 million; NASA, $217 million; Department of Energy, $274 million; and Department of Defense, $1 billion) will receive 85 percent of the total R&D earmarks, whereas NIH, NSF, and the new Department of Homeland Security remain earmark-free. In some programs, earmarks make up one out of every five program dollars.

FY 2005 R&D earmarks are up more than a third from 2002 and 2003 after a dramatic jump last year. The total number of earmarks is increasing faster than dollar growth, suggesting that the size of the average earmark is shrinking in an era of tight budgets but increasing constituent demand.