IP: AAAS - Future R&D Cuts

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

FYI
The American Institute of Physics Bulletin of Science Policy News
Number 71: May 2, 1996


Numbers Crunch: AAAS Calculations Project Cuts in R&D Spending    


An analysis by the American Association for the Advancement of
Science finds that the Clinton Administration's plan to balance the
federal budget by 2002 entails significant reductions in future
federal R&D spending.  Following a requested increase in FY 1997
R&D spending, funding would decline in the following three years.


Making projections a year ahead is uncertain; making them through
the year 2002 is even more difficult.  Yet, with Congress and the
Administration responding to the public's clamor for a reduction in
the federal deficit and a balanced budget, the numbers given in
this year's budget submission about future spending patterns cannot
be ignored.  


Much of this discussion revolves around what Washington calls
"outyears," and what everyone else would more simply call the
future.  A 1974 law requires the president and Congress to prepare
projections of future, or outyear, spending.


Balancing the budget by the year 2002 requires projections about
federal spending, taxation and the assumptions about the nation's
economy.  If the nation's economy is strong, tax revenue will
increase, and government spending on unemployment benefits and
other programs will decline.  Add to this estimates about
inflation.  It all becomes very tricky.


AAAS looked at the administration's figures in the budget
submission to Congress, and then adjusted them for expected
inflation.  AAAS calculates that total nondefense R&D expenditures
would change as follows:   


FY 1996 to FY 1997:  Up 3.3% after inflation
FY 1997 to FY 1998:  Down 5.2% after inflation
FY 1998 to FY 1999:  Down 5.7% after inflation
FY 1999 to FY 2000:  Down 4.9% after inflation


AAAS found that "In FY 2000, total nondefense R&D would be 17.9%
below the original FY 1995 level after inflation."


Administration estimates about subsequent R&D spending are less
clear.  If everything goes as hoped, spending could increase in FY
2001 and FY 2002.  The projected cumulative reduction over 7 years
in nondefense R&D funding under this scenario would be 11.7%.  If
conditions are not favorable, additional cuts would have to be made
to achieve a balanced budget by FY 2002.


Projected R&D reductions are not uniform.  AAAS calculates total
Department of Energy nondefense R&D would decline 18.3% between FY
1995 and 2002 (all figures in constant dollars.)  DOE's "General
Science (Physics)" would decline 13.8%, from $974 million in FY
1995 to $751 million in FY 2000.  General Science spending would
then increase to $977 million in FY 2002 "if the economy performs
according to OMB projections." 
 
Total NASA R&D spending would decline 16.9% between FY 1995 and FY
2002.  Science, Aeronautics and Technology R&D (Space) would
decline 12.5% in the same period, dropping from $5,072 million in
FY 1995 to $4,394 million in FY 2000, before rebounding to $5,163
million in FY 2002 if the economy behaves.


The National Science Foundation projections are a mixed bag.  Total
NSF R&D would decline by 10.8% between FY 1995 and FY 2002.  The
projection for Research and Related Activities spending is more
positive, increasing by 1.7% in the same period (with no
year-to-year declines.)  "R&D in Education and Human Resources"
would decline 19.4% between FY 1995 and 2002.


NIST Scientific and Technical Research Service spending would
decline a projected 7.5% during the FY 1995 - 2002 period.  The
Advanced Technology Program budget would decline 23.2%.


This is not favorable news, and the Clinton Administration urges
that the science community not get too excited about these
projections.  OSTP Director John Gibbons addressed an AAAS R&D
colloquium the day this analysis was released, and he spent quite
a few minutes discussing these calculations.  Among his remarks:
"What I'm wary of in this forum today, though, is the temptation to
be drawn into discussion of theoretical events in a distant future
-- and anyone who's ever worked on the Federal budget-setting
exercise knows that the year 2002 might as well be a century away
for all our ability to accurately predict the details of federal
spending that far out....  Friends, I'm honestly much more worried
about what we'll be able to do in FY 97 than I am about FY 2002.... 
I don't know what 2002 will bring -- neither does the Congress,
neither does AAAS.  I'll be happy to have the debate over the out
years when we know more about them."


Last year, AAAS used the same methodology to project a
much-discussed 33% cut in federal nondefense R&D contained in the
Congressional Budget Resolution.  AAAS states that the two studies
are "not directly comparable."  Inflation estimates have become
more favorable since then, the AAAS stating, "If the congressional
analysis were to be recalculated using this year's deflators, the
outlook for nondefense R&D would be more favorable than reported
last July."  In addition, the actual outcome of FY 1996 R&D
appropriations was different from that first suggested by the
budget resolution.


AAAS readily acknowledges that outyear projections "have always
been unreliable."  Nevertheless, a senior OSTP official wondered
aloud at a recent PCAST meeting about new starts of large,
expensive facilities when the future seems uncertain.  Top
administration R&D officials indicated at this meeting that they
are readying themselves for "substantial reductions" between now
and FY 2000.
 
The AAAS analysis is available on the AAS R&D Budget and Policy
Project World Wide Web page at
http://www.aaas.org/spp/dspp/rd/rdwwwpg.htm


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Richard M. Jones
Public Information Division
American Institute of Physics
fyi () aip org
(301) 209-3095
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