1. The Federal R&D Budget: Process and Perspectives Matt Hourihan March 16, 2015 For the Mirzayan S&T Policy Fellows AAAS R&D Budget and Policy Program http://www.aaas.org/program/rd-budget-and-policy-program http://www.aaas.org/program/rd-budget-and-policy-program

2. The Federal Budget is Kind Of a Big Deal “Politics is who gets what, when, and how.” - Harold Lasswell “Budgeting is about values, and it’s about choices.” – Rep. Rosa DeLauro Every dollar in the budget has its claimants! Negotiation between competing interests (and their proxies) in a decentralized system Major impact for R&D and innovation: most basic research, and most university research, is federally funded

3. Broad Qualities of the System Decentralization “Embeddedness” Incrementalism

5. Two Spending Categories: Discretionary vs. Mandatory Mandatory Spending (aka Direct Spending) Mostly entitlements, mostly on “autopilot” Potential for high political sensitivity = “third rail” Discretionary Spending: Adjusted annually Easy (nondefense) targets? i.e. Sequestration Vast majority of federal R&D is discretionary

8. A Typical Federal Budget Process: Three Years, Four Phases Phase 4: Execute the fiscal year’s budget (not shown) Arranged by fiscal year (October to September)

9. The Federal Budget Cycle Phase 1: Internal agency discussions and planning Strategic plans, staff retreats, program assessments OMB is present throughout Early spring: guidance memo Science & Tech: Joint guidance memo from OMB / OSTP (midsummer) Agencies deliver budget justifications to OMB (early fall)

10. Agency Budgeting One Agency’s R&D Budget Coordination (?) and Top-Down Guidance Decentralized planning and scientific input

11. One Example The Human Genome Project Science community takes early interest in sequencing Senior DOE Science personnel conceive plan, work their way up the hierarchy: Elicit support from DOE superiors, OMB Endorsements, guidance from advisory panels, other outside experts Appropriators and authorizers on board Separately and slightly behind, NIH sets up its own program Interagency rivalry evolves to collaboration

12. The Federal Budget Cycle Phase 2: OMB performs multi-stage review, responds to agencies (“passbacks”) Agencies and agency heads can and do negotiate Budget proposals are finalized in January President presents the proposed budget to Congress early February

14. Major Funding Priorities Advanced Manufacturing Low-carbon energy Climate research and earth observation Agricultural R&D Infrastructure R&D Antibiotic Resistance* Precision Medicine* Discovery Science: Life sciences and neuroscience Advanced computing COMPETES Agencies R&D: $12.1 billion, +6.6% *New for FY16

15. The Federal Budget Cycle Phase 3: Congress gets involved Receives and reacts to President’s budget, holds hearings IN THEORY: Approves budget resolution (simple majority) 302(b) allocations to the 12 appropriations subcommittees

16. The Budget Resolution Overall spending framework Discretionary spending figure is divvied up by appropriations committees Budget resolution is a political document (which is why they can’t seem to pass one?) Reconciliation instructions?

18. The Federal Budget Cycle Approps committees write/approve 12 appropriations bills Bills have to pass both chambers Differences are resolved in conference committee Can be filibustered “President proposes, Congress disposes”

19. Congressional Budget Decisions “All politics is local” Distributed responsibility: Nine subcommittees responsible for at least $1 billion of R&D No concerted assessment of full R&D portfolio Limited avenues for formal S&T advice Concerns over balance, duplication, competitiveness, role of government, broader fiscal context Reactive; incrementalism? The “Annual Miracle”

20. More examples… Dept of Agriculture research grants USDA research regular source for earmarks Outside calls for increased competitive grants (versus formula funds) over 30+ years Competitive programs phased in slowly Health Research and Congress DOD health program: breast cancer advocacy NIH doubling was a Congress-led initiative

21. Authorizations vs. Appropriations Authorization Creates and modifies programs Sets funding ceilings Under the jurisdiction of the topical legislative committees Appropriations Permits funding (power to incur obligations) Under jurisdiction of Approps Committees Can be multiyear or advance appropriations (i.e. Veterans) >$250 million in unauthorized appropriations in 2012 (per CBO)

22. House Budget Cmte Natural Resources Cmte Approps Cmte Subc on Interior + Env Subc on Energy + Water Energy + Commerce Cmte Senate Budget Cmte Energy and Nat Res Cmte Env and Pub Works Cmte Approps Cmte Subc on Energy + Water Subc on Interior + Env

23. The Federal Budget Cycle Gov’t is working on 3 budgets at any given time. Right now: FY15 in progress FY16: Heading for budget resolutions, approps to follow FY17: Agencies probably ramping up

24. Looking ahead… Budget resolutions coming soon Size and composition of the discretionary budget? Can R&D stay ahead of the curve? Deficits have fallen, but big-picture fiscal challenges remain largely unchanged Debt limit, entitlement growth Reconciliation strategy?

34. 3. agency notes R&D STEM

35. For more info… mhouriha@aaas.org 202-326-6607 http://www.aaas.org/program/rd -budget-and-policy-program