Well worth reading till the end

[Dave Farber <farber () central cis upenn edu>]

Joel Widder
Acting Director
Office of Legislative and Public Affairs
National Science Foundation
before
the Committee on Science
American Chemical Society
April 2, 1995


I very much appreciate the opportunity to speak with you today.  I
stepped into my current position as the Acting Director of the Office
of Legislative and Public Affairs around Labor Day.  I have been part
of the team representing the Foundation before the Congress for the
past 12 years, so when the Director asked me to step in and help hold
down the fort while the agency conducted a national search for a new
office director, I figured -- no sweat. I knew most of the staff.  I
had worked with the committees and the various chairmen and had a good
grasp of the major players and the issues -- no problem.


Then came Nov 8 and the whole world as I knew it on the Hill changed.
In a heartbeat, all of the chairmen were changed.  All the key staff
members changed.  And the membership of the committees that oversee
the Foundation were dramatically re-arranged.  And before I could even
think straight, I get a phone call from the NSF Director first thing
in the morning on the day after the election asking me the same
question I had been asking myself....now what the hell do we do?


Well, I believe I can report that, with all things considered, the
Foundation has come through the current Congressional reorganization
in very good shape.


NSF and the New Congress


The historic bipartisan support for the Foundation remains intact.
The Congressional leadership has re-affirmed the Congress'
long-standing support for basic research. NSF, unlike some of the
other federal R&D activities, is not being subjected to major
philosophical battles.  But we are concerned about the challenges
confronting our R&D colleagues in the other agencies such as:


     ATP program within the Commerce Department's Technology
Administration;


     TRP program within the Defense Department;


     National Biological Survey within the Interior Department;  and


     the discussions going on about the elimination of the Energy
Department and the Education Department.


But even though NSF is not finding itself in the midst of these
battles, we, like all the federal agencies, are not immune from the
ever tightening constraints of the budget environment.  And it is my
contention, that the budget constraints were are just starting to deal
with would have been present regardless of which party controls the
Congress.  The need to get a handle on reducing the deficit by cutting
spending pervades the public policy process in an overwhelming way.


So as we come to the end of the first 100 days of this new Congress --
it is a good time to look at where we are and what we can expect in
the coming weeks and months.


The Budget Environment -- Challenges and Constraints


The balanced budget amendment may have been defeated by one vote, but
the budget environment created by that debate is still going strong in
both the House and Senate.  Let me give you sense of the problem with
the following overhead graphic.


FY 1996 Budget Picture


[Federal Spending for FY96 vu-graph]


This is a snapshot of the entire Federal budget for fiscal year 1996.
The column on the left shows the different categories of Federal
spending in the President's budget, which calls for total spending of
$1.6 trillion.


The first category is net interest, meaning interest payments on the
national debt.  It will cost roughly $257 billion in 1996.


Second is the category known as entitlements, which comes in at
roughly $450 billion in federal spending.  This consists primarily of
the large health care programs, Medicare and Medicaid.


The third category is Social Security, accounting for around $350
billion in federal spending.


Fourth is defense spending, coming in at just over $260 billion.


And fifth and finally is the category known as non-defense
discretionary spending, which includes NSF, the Park Service, highway
construction, student loans, NIH research, and just about the rest of
the government.  It totals about $290 billion and represents about 18%
of the total budget.


The right hand column displays the budget deficit, shown in red of
course.  According to current estimates, the deficit for 1996 will be
about $197 billion.


I put these columns next to each other to make one simple point.  In
all of the recent discussions in Washington about ways to reduce the
deficit, virtually all of the top four categories have been placed
"off the table."  This means they are not subject to cuts, except in
selected smaller areas like perhaps welfare reform.


Most of the budget cutting attention has been focused on the fifth
category -- non-defense discretionary spending.  Any significant
deficit reduction would likely take a very large chunk out of
discretionary spending.


Beyond The FY 1996 Budget Picture -- Reinvention Process


The picture only gets more disturbing when we look beyond 1996.  The
outyear projections developed by OMB for NSF's budget follow the path
of a mathematical progression.  We call it the 3/5/7/9 scenario.  This
means a 3% decrease in 1997, a 5% decrease in 1998, and so on, all
measured against our 1996 level of $3.4 billion.


These outyear reductions for NSF are part of the government-wide
reinvention exercise being led by the Vice President.  The budget
reductions are part of the President's plan to reduce spending,
improve the delivery of government services and programs to citizens,
and help finance the middle class tax cut proposed by the President --
and all the while, continuing with efforts to get control of the
deficit.


This is a picture not seen by NSF or the research community in a very
long time.  It represents an outright decline in our resources.  The
effects of inflation compound the reductions.  We are actually facing
at least a 20% drop in our purchasing power by the year 2000.


Magnitude of the Potential Reductions


Even more disturbing is that the 3/5/7/9 scenario might prove to be
overly optimistic.  It is based on the President's spending
assumptions, which do not assume a balanced budget by the year 2002 --
which, if you are reading the newspapers -- you know the Congressional
leadership has much larger cuts in mind as it intends to show how it
will move towards a balanced budget by the year 2002.


Speaking at the AAAS meeting in February 1995, Rep George Brown,
former chair and now ranking minority member of the House Science
Committee offered the following assessment:


     "The magnitude of the cuts that are looming boggles the
mind...The Republicans intend to not only balance the budget, but also
offset a tax cut that has been conservatively estimated to cost $200
billion over the next five years.  This will require about a trillion
dollars more in cuts than the President is proposing.  What this will
mean to federal R&D funding is anyone's guess.


Well, one very recent analysis [House Science Committee Democratic
response to the Republican Views and Estimates Report to the House
Budget Committee, March 1995] says that if you want to balance the
budget by the year 2002, hold defense spending constant, and pay for
the tax cuts suggested in the Contract with America -- then
non-defense discretionary spending [which includes civilian R&D] will
drop by 33% by the year 2000.


Rescission Process


And we are already seeing the first signs of this happening.  The FY95
rescission bill proposes to significantly scale back the TRP program
by either $500 million or $200 million.  The Commerce Department's
Advanced Technology Program and NOAA's global change program are also
in line for significant reductions in the current year's budget.


Discretionary Spending Limitation Bill


As for FY1996 -- the bill recently reported out by the House Budget
Committee to lower and extend discretionary spending ceilings through
the year 2000 cuts an estimated $100 billion out of discretionary
spending over the next five years.  The $100 billion cut comes with a
list of "illustrative examples", which include such items:


     Save $2 billion by eliminating NIST's ATP program, the
Manufacturing Extension program, and the information infrastructure
program within the NTIA;


     Save $4 billion by reducing or eliminating the Department of
Energy.  Of this amount, $2.3 billion is targeted by cutting back
energy supply R&D activities;


     NASA will be reorganized to save close to $5 billion as a result
of its reinvention exercises;


     Eliminate the EPA environmental technologies program and save
some $273 million; and


     Even NIH is listed as absorbing a 5% reduction to help it
re-focus its priorities.


But wait, there's more.


Most budget analysts see this $100 billion as only a downpayment or
first step.  In May, when the budget committees report out their
budget resolution -- a multi-year macro spending blueprint -- we could
see additional reductions in non-defense discretionary spending by
anywhere from $100 billion to $400 billion depending on the level of
tax cuts and reductions in entitlement programs the Congress
ultimately goes forward with.


So it will be getting worse before it gets better.  How much worse?
Wait there's more.


House Appropriations Hearing -- FY1996


In hearings before our House Appropriations Subcommittee, the chairman
asked NSF how it would absorb or adjust to a 20% cut in its FY96
budget.


Where does the 20% figure come from?


It comes out of the subcommittee's expectation that it will have fewer
resources for its FY96 appropriation bill than it had in FY95.  How
much less?  Hard to say at this point but given the pressure to reduce
discretionary spending and the competition within this subcommittee
for the scarce resources it will have -- competition that includes
such popular functions as VA medical care, EPA, NASA, and housing --
some kind of major reduction is a distinct possibility.


But wait, there's more.


I touched on the reinvention activities that NSF and all the other
agencies are going through.


Well there are those in the Congress making even more dramatic and far
reaching plans for Executive Branch re-organization.  Members are
looking at the termination of such departments as Energy, Education,
Commerce, and Housing.  And with all this talk of departmental
elimination, we are seeing the revitalization of the proposal to
create a department of science take on new and serious life.


Necessity to Communicate More Effectively


So there's a lot going on. It's clearly a time of upheaval as well as
a time of opportunity.


It has never been more important for the S&T community to communicate
with today's policy makers about the importance of investing in
science and technology.  It is important that the community find new
ways to convey to the public and policy makers the contributions
science and technology has and will continue to have towards improving
our quality of life and economic competitiveness of the nation.


The community must stop talking to itself and learn how to interact
more effectively with officials at the state, local, and federal
level.


Keep in mind, that over half of the Members of the House of
Representatives have four years or less of experience in the Congress
-- that's a lot of people making important decisions that need to be
informed and educated.


And the community must -- it its to be effective in its communication
efforts -- must relate its activities in terms that Members and their
staffs can understand and appreciate.


Again, let me quote from Rep George Brown's speech at the 1995 AAAS
meeting:


     "...if early trends continue, basic research will become
isolated, and this will be more true in the physical and mathematical
sciences, with fewer dollars and fewer publicly-funded, applied
research programs to help address calls for increased accountability
from a results oriented political system.  In the end, basic research
will still have to justify its existence to the public and its elected
representatives, but will have to do it largely on its own..."


The community has to find ways to better inform the public about the
value they get by investing their tax dollars in the conduct of
science and engineering -- particularly within the academic
enterprise.


Recognize that most people get the information they use to form
judgments and opinions from TV news, radio news and newspapers -- not
from Science Magazine.  That means we have to find ways to communicate
with the public through the mediums they use to get their information.


I know this is not easy, but we are in a tough budget environment that
will test everyone.  Science has lots of good stories to tell and
people are generally disposed to support science and technology.  We
just have to make a concerted effort, as a community, to spend more
time and effort in effectively and continuously communicating with the
audiences that have to provide their support in order for the research
enterprise to flourish.


Thank you.