1. The Federal R&D Budget Process 101
Matt Hourihan
November 7, 2017
For the UNC-Chapel Hill Science Policy Advocacy Group
AAAS R&D Budget and Policy Program

2. The Federal Budget is Kind Of a Big Deal
Major impact for R&D and innovation: most basic research, and most university research, is federally funded
“Politics is who gets what, when, and how.” - Harold Lasswell
Public dollars are scarce resources
The budget process is ultimately a negotiation between competing interests (and their proxies) in a decentralized system
Budget choices are influenced by many things at every step:
values; politics and political constituencies; power and control; tradeoffs; incrementalism; rules and institutions; and even merit!

3. The Budget Process at a Glance
Executive Branch
Legislative Branch
White House
Budget Committees
Budget Resolution
OMB
Agencies
OSTP
February Budget Request
Appropriations Committees & Subcommittees
SPENDING BILLS (x12)
Timeline is 18 months or more from the start of agency planning to completion of appropriations and start of the fiscal year on October 1, however…
Congress hasn’t gotten appropriations finished on time since 1996

4. Formulation of the President’s Budget
Executive Branch
White House
POTUS first required to submit annual budget in 1921
Agencies work for the President, and thus the White House has final approval on what makes it into the budget request to Congress
Both top-down and bottom-up
OMB
Agencies
OSTP

5. Agencies in the Budget Process
Executive Branch
Agency process kicks off 18+ months in advance. Generally:
Developing strategic priorities, objectives (winter/early spring)
Then developing and iterating concrete, detailed program proposals and scenarios (spring/summer)
Often bottom-up: small units  larger units  agency leadership/CFO
Ingredients include:
Agency head and staff judgment
External input from advisory or review committees, workshops or meetings, NAS surveys, Congress, etc.
Incrementalism: last year’s budget influences next year’s
Performance metrics
White House
OMB
Agencies
OSTP

6. The White House in the Budget Process
Executive Branch
OMB = Office of Management and Budget
Spring: Guidance memo to agencies
Fall: Thorough, detailed review of agency budget submissions, followed by “passbacks” and appeals
OMB’s job is to constrain spending
OSTP = Office of Science and Technology Policy
Summer: joint memo with OMB outlining broad S&T priority areas for investment
Advice (with PCAST) and coordination to President, agencies, OMB, NSTC on science investments and strategies
High-level political, spending, or legislative priorities
Negotiation with agencies
Things must wrap in January
This is all truncated in transition years
White House
OMB
Agencies
OSTP

11. The Budget Process at a Glance
Executive Branch
Legislative Branch
White House
Budget Committees
Budget Resolution
OMB
Agencies
OSTP
February Budget Request
Appropriations Committees & Subcommittees
SPENDING BILLS (x12)
Congress has the Power of the Purse
Does the President’s Budget even matter? Only as much as Congress lets it

12. Appropriations Committees & Subcommittees
The Budget Resolution
Legislative Branch
Established by 1974 CBA
Intended to reassert legislative control
Overall framework:
Revenue, deficit, and total spending targets
Non-binding recommendations
Key for science: discretionary spending limit to govern appropriations
Isn’t law and can’t change law, but can set up reconciliation instructions (i.e. tax reform this year)
Best seen as a political document as much as a governing document
Partly because it isn’t always adopted…
Budget Committees
Budget Resolution
Appropriations Committees & Subcommittees
SPENDING BILLS (x12)

18. Enter the Appropriators
Executive Branch
Legislative Branch
White House
Budget Committees
Budget Resolution
OMB
Agencies
OSTP
February Budget Request
Appropriations Committees & Subcommittees
SPENDING BILLS (x12)
Budget resolution discretionary target  spending caps for each appropriations bill
Twelve appropriations subcommittees = twelve spending bills

19. From Budget to Appropriations
Budget Resolution limits  Approps Committees  Subcommittees
These caps remain in place all the way through floor consideration
Led by “Cardinals”
Committee Chairs: Rep. Rodney Frelinghuysen (NJ), Sen. Thad Cochran (MS)
Ranking Members: Rep. Nita Lowey (NY), Sen. Patrick Leahy (VT)
Appropriators will often have their own priorities
“All politics is local”
Merit, ideology, constituent needs, balance and tradeoffs, waste and good government
“President proposes, Congress disposes”
Key: Getting bills that can pass

20. Energy & Water Subcommittee
House
Senate
Chair
Mike Simpson (ID)
Lamar Alexander (TN)
Ranking Member
Marcy Kaptur (OH)
Dianne Feinstein (CA)
Tradeoffs: Balancing basic research and facilities, labs, tech portfolio, NNSA; also Army Corps, Bureau of Reclamation
NNSA prioritized
Office of Science: flat in House, +3% in Senate
ASCR boosted in both (exascale, facilities)
BES: facilities prioritized over research
Variation on Fusion Science
Applied tech: Mixed reductions
ARPA-E zeroed in House
Very mixed for EERE, Fossil, Nuclear, grid
Hubs, manufacturing institutes, other research centers mostly preserved

21. Labor, HHS, Education Subcommittee
House
Senate
Chair
Tom Cole (OK)
Roy Blunt (MO)
Ranking Member
Rosa DeLauro (CT)
Patty Murray (WA)
Deep divisions over public health programs, education, DOL
Everybody likes NIH lately
House: +3.2% (+$1.1 billion)
Senate: +5.6% (+$2.0 billion)
Especially Alzheimer’s research
F&A changes prohibited
Fogarty protected
Includes 21st Century Cures funding
Others:
BioShield and BARDA flat
IES flat or trimmed
CDC cut
Opioids

22. Commerce, Justice, Science Subcommittee
House
Senate
Chair
John Culberson (TX)
Richard Shelby (AL)
Ranking Member
Jose Serrano (NY)
Jeanne Shaheen (NH)
Tradeoffs: Balancing Justice, Commerce, NASA, NSF; smaller bills this year
NSF: Cut by ~2% in both
House: no funding for vessels; physical and biological disciplines targeted on floor
Senate: research, EHR trimmed
NASA: recent priority, but modest this year
Variation in Science Directorate funding; Exploration favored; Education protected
NOAA: Sea Grant, most research protected
Climate research cut by 19% in House
Major differences re: Polar Follow-On
NIST: Senate more generous; labs fare better than industrial innovation programs
Census: boosted by 4%, but is it enough?

23. The Budget Process at a Glance
Executive Branch
Legislative Branch
White House
Budget Committees
Budget Resolution
OMB
Agencies
OSTP
February Budget Request
Appropriations Committees & Subcommittees
SPENDING BILLS (x12)

24. The Budget Process at a Glance
Executive Branch
Legislative Branch
White House
Budget Committees
Budget Resolution
OMB
Agencies
OSTP
February Budget Request
Appropriations Committees & Subcommittees
SPENDING BILLS (x12)
“Please don’t veto us!”

25. Other Legislative Tools for Spending
Continuing Resolutions
…with depressing regularity
Uncertainty? New starts?
Omnibus
Or minibus, or megabus, or cromnibus, or…
Supplementals
i.e. Zika, Ebola, Hurricane Sandy
Also war funding
Not subject to spending caps

26. The Federal Budget Cycle
Gov’t is usually working on 3 budgets at a time
(However, presidential transitions complicate things)

27. Progress to Date On R&D-Relevant Spending Bills
House Floor
Senate Committee
Agriculture X
Defense
Commerce, Justice, Science
Energy & Water
Homeland Security
Interior & Environment
Labor, HHS, Education
Milcon, Veterans
State
Transportation, HUD

29. Looking Ahead FY18 spending caps: Where do we end up?
House and Senate have budget resolutions, but…
Will need to work with Senate Democrats on any deal to change the caps
FY18 appropriations:
CR in place until December
House finished, Senate close
Will the White House ultimately go along with any of this?
Signaled willingness to sign House omnibus
Implications of other policy issues: tax reform, border wall, healthcare, etc?

31. mhouriha@aaas.org 202-326-6607 http://www.aaas.org/rd
For more info…