After failing to meet the end-of-fiscal-year deadline on the annual appropriations bills necessary to keep the Federal government functioning, Congress and the Administration agreed on a stopgap funding measure in late September that will ensure that Federal science agencies in 2009 will face a fourth straight year of reduced budgets.

The stopgap measure, called a “Continuing Resolution” (CR), will fund government agencies through March 6, 2009—more than halfway into the new fiscal year—at the same funding levels they received in FY 2008. For agencies like the National Science Foundation, National Institute of Standards and Technology, and Department of Energy Office of Science, this steady-state start to FY 2009 represents a cut in funding when taking into account the effects of inflation. In fact, because the CR references the funding levels contained in the FY 2008 Omnibus Appropriations and not the increased funding levels the agencies received as the result of a mid-year “emergency supplemental” appropriation, it represents a considerable cut compared to those FY 2008 final budgets.

Unless funding for science agencies is increased significantly after the current CR expires in March, the agencies appear to be headed for a fourth straight year of declines in constant-dollar funding. According to NSF, after adjusting for inflation, federal research and development funding fell 0.2 percent between FY 2005 and FY 2006, and fell an additional 1.6 percent from FY 2006 to FY 2007. NSF has not released figures yet for FY 2007 to FY 2008, but CRA’s own analysis of the numbers shows a likely decrease of greater than 1.0 percent after adjusting for inflation.

The fact that Congress ended up passing a stopgap CR was not a surprise to many in the science advocacy community. On the Computing Research Policy Blog, discussions of the likelihood of a CR or other related appropriations meltdown have been posted since February 2008 (see, for example, our first analysis of the FY 2009 Budget Request: http://www.cra.org/govaffairs/blog/archives/000652.html).

After the FY 2008 appropriations process broke down over a failure to agree on an overall spending level, it seemed clear that a similar outcome was likely for FY 2009. After all, the dynamics of the process had not changed: a Democratic majority in Congress not quite large enough to overcome a Presidential veto, and a President with allies in Congress who pledged to veto any spending over his requested limit.

When the President threatened in his State of the Union Address in January 2008 to veto any appropriations bill sent to his desk that did not cut FY 2008 earmark levels in half, he virtually assured that he would not be around to see any of the final appropriations bills. Cutting spending levels by the amount the President requested would require significant cuts to Democratic priorities. With a new Administration guaranteed to be in place in late January 2009, it seemed highly likely that the Democratic leadership in Congress would simply delay passage of appropriations bills until after the November election at the earliest and reassess the funding landscape then. And indeed, that is essentially what they have done.

Predicting what might happen by the March 2009 expiration of the CR is made very difficult by the large number of variables in play. As we go to press in early October, the most significant is the impact of a potentially $700 billion+ federal bailout of the financial sector. It is not exactly clear how such a large expenditure—$700 billion exceeds the total size of the Department of Defense budget, or total spending on Medicare or Medicaid or Social Security in a single year—will be accounted for in Congress and what impact it might have on the discretionary spending numbers. It is also not clear what impact it will have on the attitudes of policymakers towards discretionary spending for other priorities like science funding. At a minimum, it seems likely that such a large payout may amplify so-called “deficit politics,” perhaps making policymakers less inclined to see Federal discretionary spending rise at all and creating an environment where it may be hard to realize hard-won commitments to increase funding for science agencies.

The other unknown is how the new Administration will approach funding for federal science agencies. The good news for those in the science community is that both major candidates have committed to following the funding recommendations approved by Congress as part of the America COMPETES Act, which called for doubling the budgets of NSF, NIST and DOE Office of Science over seven years. However, how both candidates approach this commitment varies somewhat—and both will be affected significantly by the outcome of the Congressional election.

Sen. Barack Obama (D-IL) has indicated that, should he win, he intends to follow the funding recommendations contained in COMPETES. If the current Democratic majority in Congress holds or is increased, his ability to follow through on that commitment will be greatly enhanced. If, however, the Democratic majority shrinks, or if they lose control of one or both chambers, the calculus changes dramatically and science funding may once again find itself competing with more partisan priorities. (In a closely divided Congress that is not the party of the Administration, the fact that science funding is a priority for both parties can actually be a disadvantage, as neither party really gets to claim credit for any progress.)

Sen. John McCain (D-AZ) has also indicated his support of the funding levels recommended in the COMPETES Act. However, he would hold off on starting the doubling process until his Administration enacts a one-year discretionary spending “freeze” for all federal agencies. According to Ike Brannon, an economic and senior policy advisor to McCain, the purpose of the freeze would be to give the new Administration an opportunity to review every federal program to “find the ones that work and eliminate the ones that don’t.” This freeze would also apply to federal science agencies, ensuring that they would suffer that fourth year of reduced funding.

There is one bright spot in the federal R&D portfolio in FY 2009, however. As part of the CR, Congress did enact new spending for operations of the Department of Defense. Included in that new spending was an increase of $270 million to the DOD basic research (or 6.1) accounts, an increase of 12.7 percent over FY 2008. The increase comes after Secretary of Defense Robert Gates used some of his own political capital to place a priority on buttressing DOD’s basic and university research efforts in the DOD budget. As this article goes to press, we still do not have the full details of the increase, but for the latest analysis on the DOD numbers—and, indeed, all the federal science agencies—check the Computing Research Policy Blog at http://cra.org/blog.