February 17, 2006    Volume 13, No. 4

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Bush Boosts Budget For Science & Tech, But Skeptics Abound; AAAS Says It's A Budget Decrease

BY KEN JACOBSON ken@manufacturingnews.com

The Bush administration is touting its proposed budget for fiscal year 2007 as the first step in a 10-year plan to "increase investments in R&D, strengthen education, and encourage entrepreneurship and innovation" to the tune of $136 billion under its American Competitiveness Initiative (ACI).

The ACI's "centerpiece," is the president's proposal to "double, over 10 years, priority basic research in the physical sciences and engineering," says the Bush administration. To this end, its $137.2 billion in R&D funding for next year includes a combined increase of $910 million, or 9.3 percent, for the National Science Foundation (NSF), the Department of Energy's Office of Science and the laboratories of the National Institute of Standards and Technology (NIST).

The administration's critics, however, claim that its upbeat posture masks what is in fact a proposed decrease of 1 percent in the overall federal science and technology budget for next year. "The large proposed increases for physical sciences and engineering research are not enough to keep the federal investment in basic and applied research (excluding development) from declining for the third year in a row after peaking in 2004," states a report by the American Association for the Advancement of Science (AAAS).

In short, welcome to another federal budget season, in which no number will escape analysis and no claim will go unchallenged. Here are some of the issues being debated, as seen from clashing perspectives:

ACI Funding Increase. The administration says that doubling the budgets of NSF, DOE's Office of Science and the NIST labs in the next decade will mean "$50 billion in new investments in high-leverage innovation-enabling research that will underpin and complement shorter-term R&D performed by the private sector."

Skeptics counter that, to name one example, the NIST labs' projected $72 million increase this year, an 18.6 percent jump, is more than offset by the proposed reduction of $137.3 million in funding for two NIST-managed programs, the Manufacturing Extension Partnership (MEP) and the Advanced Technology Program (ATP). Argues Rob Atkinson of the Progressive Policy Institute (PPI): "This is a budget that robs Peter of two dollars to pay one dollar to Paul."

Secondly, filling the gap between the $50 billion cited above and the ACI's $137 billion total is the sum of $86.4 billion that, according to projections by the Office of Management & Budget, would be yielded between 2007 and 2016 by making the Research & Engineering Tax Credit permanent. Critics suggest that, since Congress has renewed the credit consistently over the past two decades, counting the $86 billion as new investment under ACI is something of a stretch.

The FY2007 budget. The administration presents its proposed R&D budget of $137.2 billion as "a record" and says it represents "an increase of $3.4 billion over this year's (2006) R&D funding level."

While acknowledging the increase, AAAS notes that "in a repeat of past budgets, the continuing administration priorities of weapons development and space vehicles development would take up the entire increase and more." As a result, it adds, "the federal investment in basic and applied research (excluding development and R&D facilities) would decline 3.4 percent" under the 2007 budget -- before correcting for inflation.

Earmarks. "If you account for the earmarks," Presidential Science Adviser John Marburger said at a budget briefing last week, "then the federal science & technology budget is not down but up."

Administration officials point to such egregious examples as the $127 million in earmarks Congress inserted into the 2006 NIST account for construction of research facilities in arguing that the budget's direction should be ascertained by comparing the president's requests from year to year rather than by comparing a given year's request to the previous year's budget as enacted by Congress.

But when Congress restores budget cuts proposed by the administration, the difference is considered by the White House to be an earmark, critics contend. Charging that it treats earmarks "hypocritically," the House Science Committee Democrats' budget analysis declares: "When it suits the administration to count earmarks (e.g., when calculating budget increases from 2001-2007), they do so. When it doesn't suit them to count earmarks (e.g., when claiming that one of their budget cuts isn't a real cut when the earmarks are left off), they don't."

Additionally, as PPI's Atkinson contends, "even 'traditional earmarks' -- such as funding to a particular university in a member's district to create a nano center -- cannot be counted as worthless, which is what the administration is implying. Maybe that funding would be better spent if it went through the regular peer-reviewed process, but earmarked S&T funding still produces important innovation benefits for the economy."

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