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Appropriations Wrap-up: Congress, White House
Conclude Budget Deal for FY 2000, Agree on 0.38%
Across-the-Board Cut; R&D Funding to Grow 5%

The first session of the 106th Congress concluded as so many others have in recent years — amid rancorous debate over the fine details of the federal budget. While both the Congress and the President billed it as a struggle over the broad shape of fiscal policy, in reality the two sides were merely haggling over accounting gimmicks that would technically allow them to claim that they held overall spending below the budget caps thus preserving the Social Security Trust Fund.

Eight of the 13 FY 2000 appropriations bills were completed without major incident by the end of October. During negotiations with the Administration on the other five, about $8 billion in offsets had to be found to make way for spending increases in both sides' high-priority programs. For instance, much of the "savings" was achieved by pushing the last military payday of the year into FY 2001.

Another of the offsets agreed to was a 0.38 percent across-the-board cut in discretionary spending, applying to nearly all agencies, even those for which appropriations bills had already been passed. Republican appropriations had devised a larger across-the-board cut as a last-ditch effort to get all the spending bills passed while staying within the budget caps. When President Clinton opposed the indiscriminate budget reduction, calling it "mindless," the Republican leadership dug in and promoted it as a key element in their fight to reduce wasteful spending. The President made the symbolic concession, but pared the cut to about $1.4 billion and insisted that agency heads have maximum flexibility in implementing it.

After the agreement, Congress rolled the remaining five appropriations bills into a $385 billion "omnibus" package (HR 3194), stuffed it with goodies to placate Members who might otherwise vote against the measure, and passed it about seven weeks after the start of the fiscal year.

Both sides were able to declare victory and did. President Clinton, who obtained new funds for his high-profile police- and teacher-hiring programs, described the deal as a "hard-won victory for the American people." First-year Speaker of the House Dennis Hastert (R-IL), not usually known for hyperbole, said, "It changed the way that this town does business and it probably will put an indelible mark on how this country will see its fiscal and financial future." In addition to the across-the-board cut, the Republicans can claim they increased funding for defense, veterans programs, medical research, and education reform.

R&D Budgets Fare Well

In many ways, supporters of federal research and development programs can also claim victory in FY 2000, as Congress added $4 billion to the R&D budget request. Despite its self-imposed budget caps, the Congress is favorably disposed toward R&D spending, and the Republican leadership takes pains to outdo the Administration's attempts to emphasize its support for science. Many segments of the research community stand to benefit from this political competition.

According to an analysis by the American Association for the Advancement of Science, total federal support for R&D will come to an estimated $83.3 billion this year, 5 percent more than in FY 1999. However, three-quarters of the new funding is concentrated in the Department of Defense and the National Institutes of Health. Support for basic research is expected to total $19.1 billion in FY 2000, an increase of $1.8 billion or 10.6 percent over last year's levels and $1 billion more than requested. Here again, however, life sciences and medical research at NIH account for nearly all of the increase.

Following are budget summaries for key research agencies.

Department of Defense: For five years running, Congressional appropriators have added money to the DOD R&D budget request, though spending on defense R&D is still far below what it was in the 1980s. In FY 2000, funding for DOD R&D will rise by just over $1 billion to a total of $39 billion, about $4 billion more than DOD had requested. Basic research (6.1 research in DOD parlance) was funded at $1.2 billion, an increase of 5.4 percent over the FY 1999 level. Spending on applied research (6.2) is expected to be $3.4 billion, an increase of 7.5 percent above last year's level. Despite the overall increases, DARPA's request for new information technology research funding under the Administration's Information Technology for the 21st Century initiative (IT²) was cut by more than half, from $70 million to $30 million. Another $30 million is planned to be spent on IT² programs elsewhere in DOD.

Department of Energy: DOE spending on R&D will grow to $7.2 billion in FY 2000, an increase of $258 million or 3.7 percent. However, the $130 million budget for Computational and Technology Research, a civilian program, is down -- by $26 million compared to last year and $70 million compared to the request -- due to the rejection of DOE's proposed Scientific Simulation Initiative (SSI), another element of IT². Appropriators apparently felt that SSI duplicates DOE's Accelerated Strategic Computing Initiative (ASCI), a defense research program that also involves development of next-generation teraflop computers. ASCI was funded at $315 million in FY 2000, an increase of 4.6 percent above last year's level.

NASA: After House appropriators caught NASA off guard with a $1.4 billion cut, the space agency rallied its troops, supplicated its key champions in the Senate, and got the funding restored. However, the agency has seen better days. Neither the Administration nor the Congress has targeted NASA as a beneficiary of their surging support for science, the way they have with NIH, NSF, and other research agencies. The NASA budget for FY 2000 is $13.6 billion, down by $64 million or about a half a percent from the FY 1999 funding level but a bit more than what was requested.

National Institutes of Health: Appropriations for the NIH come from one of the five bills that was subject to negotiations over the omnibus budget package. In fact the Congress's insistence on adding $2.2 billion to the NIH budget was one of the reasons that offsets were needed to get back under the spending caps. The FY 2000 NIH budget totals $17.8 billion, 14.3 percent more than its FY 1999 budget and $1.9 billion more than the Administration had requested. There is a catch, however, as the omnibus appropriations bill restricts NIH from spending the last $3 billion of its budget until September 29, 2000, one day before the end of FY 2000. The Administration unsuccessfully contested this provision, an accounting trick that is not often imposed on research programs.

National Science Foundation: The NSF budget will grow by $240 million in FY 2000 to a total of $3.9 billion, 7 percent above funding in FY 1999. The increase includes $90 million for a new Information Technology Research (ITR) program and $36 million to develop a five-teraflop computing facility, which together comprise the NSF's contributions to IT². With the new ITR funding, the Computer and Information Science and Engineering directorate's budget will increase by 30 percent, to $390 million, in FY 2000. Two other priority research areas -- biocomplexity and plant genome -- will see expanded support in FY 2000.

Outlook for IT Research in FY 2001

Next month the President will release his budget request for FY 2001. It is expected to include second-year funding for the IT² initiative consistent with the recommendations made by the President's Information Technology Advisory Committee (PITAC). PITAC called for the expansion of support for fundamental computing and networking research by $1.37 billion over five years.

IT research will not be the only highlight of the science budget, however. The Administration is also expected to unveil a new initiative in nanotechnology, described as the creation and utilization of functional materials, devices, and systems through the control of matter on a scale of a fraction of a nanometer to tens of nanometers..

Although IT² was not implemented in its entirety during the first year of consideration, it fared relatively well for a new initiative, with the lead agency, NSF, obtaining nearly full funding for its components. Prospects for sustaining progress toward full implementation of a five-year IT research program are good and could be enhanced by further Congressional action on the Networking and Information Technology Research and Development Act (HR 2086), legislation to reauthorize the High Performance Computing and Communications program and implement the PITAC recommendations. (See the 1999 Legislative Wrap-up for further details on the status of NITR&D.)

But further success also depends on continued advocacy by the IT research community and on the strength of the coalition of university and industry organizations across the realm of computing, networking, and computational research that emerged in support of the PITAC proposal. CRA will continue to lead the charge in FY 2000 by providing information and recommendations to Congress and facilitating action among computing researchers.

prepared by Lisa Thompson, CRA Director of Government Affairs