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1. 2 An OMB Perspective on Federal Funding of Research Michael Holland Program Examiner Office of Management & Budget.

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Presentation on theme: "1. 2 An OMB Perspective on Federal Funding of Research Michael Holland Program Examiner Office of Management & Budget."— Presentation transcript:

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2 2 An OMB Perspective on Federal Funding of Research Michael Holland Program Examiner Office of Management & Budget

3 3 Outline Who or What is OMB? The Federal Budget and US R&D: the “Big Picture” The Budget Process Future Issues

4 4 “One of the interesting things about OMB is that it is unexplainable to everyone who lives outside of the Beltway and misunderstood by nearly everyone who lives inside the Beltway.” Paul O'Neill, Former Deputy Director, OMB Current Secretary of Treasury

5 5 The Mission of OMB OMB serves the Presidency as the primary agency for leading the coordination of policy development in the Executive Branch and for ensuring consistency, efficiency, and effectiveness in policy implementation. OMB prepares the President’s Budget OMB provides oversight of financial management, procurement, and information technology policies OMB reviews and clears proposed legislation, regulations, and executive orders OMB ensures continuity of these functions during the transition to new Presidential Administrations

6 6 Executive Office of the President (EXOP) White House Office Office of Management & Budget (OMB) Office of the Vice President (OVP) National Security Council (NSC) President’s Foreign Intelligence Advisory Board (PFIAB) Office of Policy Development (OPD) Council of Economic Advisors (CEA) Council of Environmental Quality (CEQ) US Trade Representative (USTR) Office of Administration (OA) Office of National Drug Control Policy (ONDCP) Office of Science & Technology Policy (OSTP) Mix of detailees, career, political Political Primarily career staff

7 7 DIRECTOR Deputy Director Deputy Director for Management Executive Associate Director General Counsel Legislative Affairs Communications Administration Economic Policy Legislative Reference Budget Review SUPPORT OFFICES Office of Federal Financial Management (OFFM) Office of Federal Procurement Policy (OFPP) Office of Information & Regulatory Affairs (OIRA) STATUTORY OFFICES ENERGY, SCIENCE & WATER  Energy  Science & Space  Water & Power NATURAL RESOURCES  Agriculture  Environment  Interior INT’L AFFAIRS  State/USAI  Economic Affairs NATIONAL SECURITY  C 4 Intelligence  Ops & Support  Force Structure & Investment  VA HEALTH  Health Financing  Public Health  HHS Branch EDUCATION & HR  Education  Income Maintenance  Labor  Personnel Policy TRANSPORTATION, COMMERCE, JUSTICE & SERVICES  Transportation  Commerce  Justice/GSA HOUSING, TREASURY & FINANCE  Financial Institutions  Treasury  Housing Resource Management Offices (RMOs) Natural Resource Programs National Security Programs Human Resource Programs General Government Programs Office of Management & Budget

8 8 DOE, NSF NASA, USDA USGS, EPA Smithsonian DOD VA NIH Ed NIST NOAA DOT Resource Management Offices (RMOs) Natural Resource Programs National Security Programs Human Resource Programs General Government Programs Office of Management & Budget SUPPORT OFFICESSTATUTORY OFFICES DIRECTOR

9 9 Outline Who or What is OMB? The Federal Budget and US R&D: the “Big Picture” The Budget Process Future Issues

10 10 Government Spending as a Share of GDP, 2000

11 11 Composition of Federal Revenues

12 12 FY 2002 Proposed Budget ($2.0 Trillion OL) R&D = 14% of discretionary spending

13 13 U.S. R&D Spending Growth Is Due Mostly to Private Sector

14 14 Increased U.S. R&D Spending Is Due Mostly to Private Sector (Cumulative “New Money,” ) Source: National Science Foundation All R&DBasic ResearchApplied Research Billions of Nominal Dollars Non-Federal Federal 94% 89% 64% 11% 36%

15 15 Federal R&D in 2002

16 16 FY 2002 Proposed R&D Budget ($98 Billion BA*) *Total includes additions resulting from Defense Budget Amendment

17 17 R&D Balance In Addition to Life Sciences, Some Other Disciplines Have Done Well

18 18 Historical R&D Priorities (obligations, in 1996 constant dollars) Source: National Science Foundation -5% 0% 5% 10% 15% 20% 25% 30% Average Annual Increases Space Energy Health Defense All Others All Others All Others All Others

19 19 Earmarks to Universities & Colleges Increasing and Undermining Competitive, Merit-Based Efforts in Some Fields Source: Chronicle of Higher Education , Millions of Nominal Dollars

20 20 Federal Science & Technology (F S&T) Budget

21 21 Outline Who or What is OMB? The Federal Budget and US R&D: the “Big Picture” The Budget Process Future Issues

22 22 The Budget Process Department of Energy Science Fossil Energy NNSA White House OMB Congress House Senate Approps

23 23 The Budget Process Department of Energy Science Fossil Energy NNSA White House OMB Guidance

24 24 The Budget Process Department of Energy Science Fossil Energy NNSA

25 25 The Budget Process Department of Energy Science Fossil Energy NNSA White House OMB Budget Request

26 26 The Budget Process Department of Energy Science Fossil Energy NNSA White House OMB Budget Request Passback

27 27 The Budget Process Department of Energy Science Fossil Energy NNSA White House OMB Budget Request Appeal Passback

28 28 The Budget Process Department of Energy Science Fossil Energy NNSA White House OMB Congress House Senate Approps President’s Budget Request

29 29 The Budget Process Department of Energy Science Fossil Energy NNSA White House OMB Congress House Senate Approps Budget Resolution 302(b) Allocation Subcommittee Markup Committee Markup Floor Vote Conference

30 30 The Budget Process Department of Energy Science Fossil Energy NNSA White House OMB Congress House Senate Approps Budget Resolution 302(b) Allocation Subcommittee Markup Committee Markup Floor Vote Conference Hearings SAPs

31 31 The Budget Process Department of Energy Science Fossil Energy NNSA White House OMB Congress House Senate Approps Bills

32 32 The Budget Process Department of Energy Science Fossil Energy NNSA White House OMB Congress House Senate Approps Apportionment $

33 33 The DOE/SC Budget Cycle FY 1999FY 2000FY 2001

34 34 R&D as a Percentage of OMB PAD $ 0% 20% 40% 60% 80% 100% NRPHRPGGPNSP % BA, FY 2001 F S&TOther R&DNon R&D $111.8B$90.5B$340.6B$80.7B FY 2001 est. BA per PAD Note: F S&T + Other R&D = Total R&D

35 35 R&D as % of Approp. Comm. $

36 36 Executive Office of the President (EXOP) White House Office Office of Management & Budget (OMB) Office of the Vice President (OVP) National Security Council (NSC) President’s Foreign Intelligence Advisory Board (PFIAB) Office of Policy Development (OPD) Council of Economic Advisors (CEA) Council of Environmental Quality (CEQ) US Trade Representative (USTR) Office of Administration (OA) Office of National Drug Control Policy (ONDCP) Office of Science & Technology Policy (OSTP) Mix of detailees, career, political Political Primarily career staff

37 37 Outline Who or What is OMB? The Federal Budget and US R&D: the “Big Picture” The Budget Process Future Issues

38 38 R&D Policy Issues for FY 2003 and Beyond The President’s Management Agenda includes government-wide and agency-specific management and performance initiatives. The R&D initiative stems from our concern that current methods used to set Federal R&D spending are inconsistent or otherwise insufficient. Without agreed-upon investment criteria, research funding decisions are often set based upon anecdotes and last year’s funding level. Can we make more informed decisions about research investments? Can we devise a set of rules for applied (and later basic) research programs?

39 39 Draft Criteria for Applied R&D at DOE Projects support work where the private sector cannot capture the benefits of developing the technology due to market failure, and in which there is a clear public interest Projects present the best means to support the Federal policy goals, compared to other policies Projects are subject to a competitive merit-based process, with external review when practical Project proposals are comprehensive, complete and include performance indicators and “off ramps,” and a clear termination point

40 40 Further Information OMB website President’s budget w3.access.gpo.gov/usbudget AAAS Science & Policy Programs DOE’s Office of Science NSF Science Resources Studies Shelley Lyne Tomkin, Inside OMB, ME Sharpe (1998).

41 41

42 42 Budget Issues Federal Budget Deficit/Surplus, FY in billions of dollars

43 Discretionary Spending ($ in billions) Additions Campaign initiatives+15.3 Pay & programmatic+19.0 National Emergency Reserve +5.6 Technical adjustments +5.6 Offsets Non-repetition earmarked funding -4.3 Non-repetition one-time funding -4.1 Program decreases-11.5 Net Increase+25.7 (4.0% increase) (further details in A Blueprint for New Beginnings)

44 44 FY 2002 R&D Budget Summary Spurs Private R&D investments -- R&E Tax Credit ($1.7 billion FY 2002; $9.9 billion FY ) Sets Federal R&D as Priority -- 6% growth (vs. 4% discretionary growth) Establishes commitment to health research -- Doubles NIH by FY 2003 Addresses Math/Science Education Needs -- at least $1 Billion over five years


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