Federal Funding at a Time of Budget Austerity

I served as chair of a committee of the National Academies of Sciences and Engineering that released a report last December entitled "Allocating Federal Funds for Science and Technology" [National Academy Press, 1995; Carlowicz, 1995]. The report had at least one salutary effect: it triggered a lively national discussion of science policy, much of it useful but some occasionally uninformed. The report was issued in an environment that can be characterized by the end of the Cold War, changing national needs, and the restructuring of research and educational institutions. It is also a stressful time when extraordinary opportunities for scientific progress are constrained by a future of austere R&D funding as both political parties struggle to honor their commitments to balance the federal budget in 7 years. In the interest of furthering debate, I will summarize the premises of the report, the principal recommendations, the main objections that have arisen, and our responses to them.

Premises

1. It is in the national interest that the United States should continue to occupy a world leadership role in fundamental science and technology.
2. The nation is in a period of severe budget stringency; therefore, to preserve scientific enterprise, the R&D budget allocations must be optimal as measured by quality, productive use of funds, and responsiveness to national needs.

There have been objections to both premises. Some objectors believe that projections of future budgets have been notoriously inaccurate, so why should we use them as a basis for formulating a new science and technology policy? They argue that the scientific enterprise is of singular importance to the nation and that the committee should not have accepted a future of decreased budgets across the board. In our response, we note that the 7-year goal of balancing the budget is an affirmed policy of both political parties. Never before have we witnessed paralysis of the government to the extent seen in recent months over debates on how to achieve a balanced budget.

Professional organizations, government officials, and experienced observers generally agree that although the prospects of individual agencies are difficult to foretell, overall science and technology funding will be constrained under any realistic forecast. NSF Director Neal Lane commented at the AAAS 1996 annual meeting, "In essence this nation is getting ready to run an experiment it has never done before -- to see if we can reduce the federal investment in non-defense R&D by one-third and still be a world leader in the 21st century." At a hearing on the Academies' report, Chairman Robert Walker (R-Pa) of the House Science Committee supports the recommendation that the U.S. "achieve preeminence in a select number of fields and...perform at a world-class level in other major fields." However, Walker added, "there will be no more blank checks...it is time for the science community to provide us with guidance and priorities."

The committee's judgment was to produce a report that would be useful however the budget future unfolds, a report that would be credible because it recognizes the fiscal stringency of the times. The committee was counseled by the Republican and Democrat senators who sponsored the study, both friends of science, to find a way to maintain the leadership position of the United States in science but not to simply propose increased funding as a principal recommendation.

Some scientists found it discomforting to speak of world leadership when the ethic of international cooperation and free exchange of information is so important to their practice. Nevertheless, the United States has invested large sums to build its capacity in science and technology. It has shared the results of its research and its training facilities freely with other countries. Strength in science and technology may be the nation's primary comparative advantage as it faces the economic exigencies of the future. And the United States is the only remaining superpower to which the democratic world turns at times of economic, medical, and security crises. The committee found much to justify its premise of maintaining a leadership role in fundamental science and technology for the United States.

The committee describes fundamental science and technology as typical of the activities carried out in the science, social science, and engineering departments of our research universities. It is a portfolio that is well known and is generally viewed as appropriate for government support. Some of the examples provided in the report follow:

• Basic Science - exploring the chemistry of photosynthesis at many university and federal laboratories with support from the National Science Foundation (NSF) and the Department of Agriculture; studying the physics of cloud formation at universities and the National Center for Atmospheric Research, sponsored by the NSF and NOAA
• Applied Science - predicting ground motion and landslides caused by earthquakes - research at universities and federal laboratories sponsored by the NSF and the USGS
• Fundamental Technology - building a prototype gene sequencing machine at Caltech, supported by the National Science Foundation

With these definitions and examples, the committee hoped to sidestep the ideological debate in Congress about whether the government role should include applied research and technology. Our view is that the boundaries between basic and applied research, and between science and engineering are eroding. Federal Science and Technology (FS&T) also encompasses the work in many federal laboratories.

The premise of world leadership needs to be defined. The committee adopted a definition proposed in an earlier recommendation of the Academies' Committee on Science Engineering and Public Policy (COSEPUP) [National Academy Press, 1993]:

• The United States should perform at the world level in the major fields of Science and Technology, so that the nation is positioned to seize opportunities that arise from new discoveries wherever they may occur. Performance at the world level implies a capacity equivalent to the top few nations, though not necessarily being the best among them. This is a "poised to pounce" strategy. It keeps in place the ability to respond rapidly to important future discoveries wherever they may occur.
• The United States should strive for preeminence in a smaller number of fields selected on the basis of well defined criteria. Such criteria might include economic importance, national security, an unusual opportunity in a field, global resource or environmental issues, control of disease, mitigation of natural disaster, food production, opportunity for international cooperation and cost-sharing, a presidential initiative (such as human space flight), or an unanticipated crisis.

Recommendation: The Federal Science and Technology Budget

Federal R&D spending totals are conventionally given as about $73 billion. However, this figure is a fiction because about half of that money is mostly spent on such things as product engineering and manufacturing setup of large-scale weapons and space systems in the Defense Department and NASA. Defense and space industrial contractors are the largest recipients (45%) of the conventional R&D budget, another indication that much of it is not true R&D. Although clearly of importance to the national interest, these activities do not represent long-term investments in obtaining new knowledge or investments in creating substantially new applications; that is, they do not fit conventional definitions of R&D in this country and abroad [OECD, 1994]. If they were excluded, the real government investment in R&D becomes $35-40 billion. The FS&T pool is what really supports fundamental science and technology in the universities and most federal laboratories. Under the FS&T budget, federal laboratories and universities become the largest recipients of R&D funds (70%), as would be expected for fundamental science and technology.

However, the FS&T concept makes sense at a time of austerity only if it embodies more than numbers and definitions. It is a disciplined process for upgrading the science and technology portfolios of federal agencies by forcing tradeoffs - transfers of funds from poorly evaluated or obsolete programs to those of higher quality or to programs that are more responsive to social and economic exigencies and opportunities in science. In this way, if austere budgets are to come, government agencies could still improve the performance of their intramural and extramural programs. Since it is difficult to predict achievements of projects, it may be wise to follow the advice of Sir Rudolph Pierls in The Times of June 6, 1985: "support more people and more institutions than would be necessary if there were a sure way of predicting the winners. By all means, study the form of your horses and back the ones that seem promising, but keep your stable broad." This approach also means that the broad support of merit-selected scientists and engineers in universities and federal laboratories - so important to maintaining the standing of American science and technology - could continue. The FS&T budget is an instrument that looks at the real R&D pool, moves funds around within it, and keeps a running score on what is happening. Without something like it, we will see worthy programs picked off in the budget debates, mindless decisions made without coordination and knowledge that everything connects, and great damage done to the S&T enterprise. An example of how the process might work is illustrated in the following extract from a hypothetical budget message from a President to the Congress.

The Federal Science and Technology Budget is $42 billion. Although it represents an increase over last year for inflation only, international comparisons show that it will enable us to maintain a world class position in fundamental science and technology, and a leadership position in the select fields of A, B, and C. The budget is adequate because we have terminated a number of projects and laboratories no longer necessary or of poor quality. Within this budget I am recommending increasing in funding for the physical sciences at the National Science Foundation; material sciences in federal laboratories and university materials research centers; research on the causes of violence at the National Institutes of Mental Health; research on newly emerging diseases at the National Institutes of Health; and microelectronics and sensor development in Department of Defense programs. These initiatives will meet mission needs and contribute to the nation's overall strength in science and technology...

The report was written in the form of a practical manual, describing how an FS&T budget would be developed in the Executive Branch and how agency science managers would be involved. It describes a process whereby Congress could consider the overall FS&T budget before it is disaggregated and sent to the 25 or so separate committees that consider it.

Although they concur with most of the recommendations in the report, President Robert Schrieffer and President-elect Allen Bromley of the American Physical Society have criticized the FS&T concept on the grounds that the conventional $73 billion R&D budget is a larger pool within which administrators and Congress can reallocate resources from one set of activities to the other as defense and civilian requirements vary [American Institute of Physics, 1996] . The committee responds that the $73 billion figure is an artificial number, an aggregation at the end of the budget process having no policy relevance. As one senior DoD official commented to us, [the flow] "is all one way," that is, from the fundamental science and technology categories to weapons development projects.

Vernon Ehlers is a physicist and a member of Congress. He is worried that the FS&T budget would become a political target and commented about the report: "It's very logical and rational, but I have to worry about its political ramifications." We are heartened by the former part of his statement, and we anticipated the latter in the preface of our report where we wrote: "Some will think us politically unwise that we recommend a process and guidelines for identifying activities that can be reduced or eliminated and for reallocating the savings to ones more essential to preserving U.S. leadership in science and technology. We have been told that ...the cuts will be made but not reallocated to federal science and technology. Perhaps. But we seen no alternative."

Recommendation: FS&T Allocations Generally Favor Universities

Other Recommendations

Clearly, broad support by the scientific and technical community is critical to achieving the goal of our report - that of maintaining the excellence of American science and technology in the face of severe budget pressures and changing national needs. Doing so means making choices, which means provoking disagreements. That has certainly been the case with this report.

Editor's Note: The NAS report is available on the World Wide Web at
http://www.nap.edu/nap/online/fedfunds/

References

Committee on Criteria for Federal Support of Research and Development, Allocating Federal Funds for Science and Technology, National Academy Press, Washington, D.C., 1995.

Carlowicz, M., NAS Calls for Comprehensive Science Budget, Eos Trans. AGU, 76, 525, 1995.

Committee on Science Engineering and Public Policy, Science, Technology and the Federal Government: National Goals for a New Era, National Academy Press, Washington, D.C., 1993.

OECD, Frascati Manual 1993: "Proposed Standard Practice for Survey for Research and Experimental Development," OECD, Paris, 1994.

FYI, The American Institute of Physics Bulletin of Science Policy News, 37, March 5, 1996.

¹ Carnegie Institution of Washington, 5241 Broad Branch Rd., N.W., Washington, D.C. 20015. Frank Press is a Past President of the AGU (1974-1976), Special Assistant to the President for Science and Technology (Carter Administration, 1979-1981), and President of the National Academy of Sciences (1981-1993). He is currently a Senior Research Fellow at the Carnegie Institute of Washington, D.C.

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