From the Hill – Winter 2000

Big increase for NIH boosts R&D spending in FY 2000 budget

Bolstered by the largest-ever dollar increase in R&D spending for the National Institutes of Health (NIH), total federal support for R&D as well as basic research will increase substantially in the fiscal year (FY) 2000 budget.

President Clinton signed an omnibus bill incorporating the remaining unsigned appropriations bills into law on November 30. He did so only after extensive negotiations with a Congress that used various budgetary tricks to keep spending technically below self-imposed budget caps and to make it seem that Social Security money was not being used. One consequence of this maneuvering, however, is that $3 billion of NIH’s $17.1 billion budget will not be appropriated until September 29, 2000, a day before the end of FY 2000, in order to shift spending to FY 2001. Upshot: NIH will effectively have to operate for nearly all of FY 2000 on less than its FY 1999 budget.

Total federal support for R&D in FY 2000 will increase to $83.3 billion, which is $4 billion or 5 percent more than in FY 1999. NIH received the biggest chunk, a nearly $2.2 billion or 14.4 percent increase. The Department of Defense’s (DOD’s) R&D spending will climb by $1.1 billion, a 3 percent increase, to $39.1 billion. Other agencies received only modest or slight increases; several suffered cuts.

Nondefense R&D spending will total $40.9 billion, up 7.1 percent or $2.7 billion, with nearly all of this increase accounted for by the NIH spending boost. Excluding NIH, nondefense R&D will rise only 2.4 percent, or $555 million, to $23.7 billion, barely ahead of the expected inflation rate of 2 percent.

Basic research will increase to $19.1 billion in FY 2000, an increase of $1.8 billion or 10.6 percent. But again, the increases will go mostly to NIH-funded life sciences and medical research. However, the National Science Foundation (NSF), the second largest supporter of basic research and the largest supporter of most non-life science research, received a basic research increase of 6 percent to $2.5 billion. The National Aeronautics and Space Administration’s (NASA’s) basic research will increase by 18 percent to $2.5 billion, mostly because of a reclassification of existing work from applied to basic research. The Department of Defense (DOD), the primary supporter of basic research in engineering, mathematics, and computer sciences, will see its basic research (the 6.1 account) rise by 5.4 percent to $1.2 billion.

The Clinton administration, which made information technology (IT) research a high priority, received a large part of what it had requested. The administration proposed $366 million for a new six-agency Information Technology for the 21st Century (IT²) initiative to support long-term fundamental IT research. Though Congress did not label the program as such, it appropriated $235 million in new research money, including $126 million for NSF and $60 million for DOD.

Here is more information on how the major R&D agencies fared:

DOD. In addition to a 5.4 percent basic research increase, DOD received a 7.5 percent boost in applied research (the 6.2 account) to $3.4 billion. DOD science and technology programs will increase by 11 percent to $8.7 billion. However, the Defense Advanced Research Projects Agency (DARPA) budget was cut by $82 million, or 4.2 percent, to $1.8 billion.

NIH received a big increase for the second year in a row, keeping the agency on course toward doubling its budget in five years. Spending will be up at every institute by more than 12 percent. Five institutes will have more than 20 percent more to spend. NIH will receive $20 million to fund cooperative R&D between NIH and the biotechnology, pharmaceutical, and medical device industries.

NASA. NASA’s total budget will be $13.6 billion in FY 2000, 0.5 percent less than in FY 1999. Total NASA R&D, which excludes the Space Shuttle and its mission support costs, will increase slightly by 0.6 percent to $9.8 billion. Of this, the Science, Aeronautics, and Technology account will receive $5.6 billion, down 1.2 percent but $161 million more than the president’s request. Although Space Science spending will increase by 2.7 percent to $2.2 billion, less funding was provided for future Discovery and Explorer missions, which could result in fewer spacecraft launches than NASA had planned over the next few years. Life and Microgravity Sciences and Applications will receive $275 million, an increase of 4.3 percent. Much of this increase is targeted for a dedicated shuttle science mission by 2001. NASA spending also will include $2.3 billion for continued development and construction of the International Space Station, which is $70 million or 3.1 percent more than in FY 1999 but $161 million less than the request.

Department of Energy (DOE). In the wake of congressional anger over allegations of security breaches and mismanagement at DOE laboratories, Congress recently moved the weapons-related activities to a new semiautonomous agency within DOE called the National Nuclear Security Administration. DOE’s R&D budget will be $7.2 billion, up $258 million or 3.7 percent. Its Science account will total $2.6 billion for R&D, down 0.3 percent. Fusion Energy Sciences will receive a 11.2 percent boost to $246 million, and Nuclear Physics will increase by 3.9 percent to $347 million. Congress declined to fund the Scientific Simulation Initiative, part of the proposed IT2 initiative. Funding for the Spallation Neutron Source was reduced to $117 million. DOE’s investments in energy R&D will all receive substantial increases: nuclear energy ($91 million, up 19.3 percent), fossil energy ($330 million, up 11.9 percent), and energy conservation ($440 million, up 10 percent). In defense R&D, the Stockpile Stewardship program was funded at $2.2 billion, which is $126 million or 5.9 percent more than last year.

NSF. NSF’s total budget will rise by 5 percent to $3.9 billion. R&D funding, which excludes its education and training activities and overhead costs, will total $2.9 billion, up 5.2 percent.

Department of Commerce. Total Commerce R&D will be $1.1 billion, up 2 percent. The National Institute of Standards and Technology (NIST) will receive a 1 percent increase, or $5 million, to $473 million. NIST’s Advanced Technology Program (ATP) was cut by 27 percent to $130 million. The budget for the mostly intramural Construction of Research Facilities program was nearly doubled to $108 million. The National Oceanic and Atmospheric Administration’s programs for natural resources and environmental R&D will increase by $17 million, or 2.8 percent, to $617 million.

U.S. Department of Agriculture (USDA). USDA’s R&D budget will rise to $1.7 billion, up 3.4 percent. The final legislation blocked a nonappropriated competitive agricultural research grants program from spending a planned $120 million in FY 2000. The existing competitive grants program, the National Research Initiative, received $119 million, the same as last year but far less than the request of $200 million. The Agricultural Research Service received $903, up 4.2 percent.

Department of the Interior. Interior’s R&D budget will decline by 0.9 percent to $562 million. The U.S. Geological Survey (USGS) received $496 million, 0.2 percent less than in FY 1999, partially because of a major restructuring of USGS activities.

Environmental Protection Agency (EPA). EPA’s R&D budget was cut by 3.5 percent to $645 million, although that amount is what the president requested. In order to make room for congressionally designated projects, Congress trimmed the request for R&D related to the Climate Change Technology Initiative and other R&D programs.

Department of Transportation (DOT). DOT received $643 million, up 6.7 percent. Because of a multiyear reauthorization of transportation programs in May 1998 that significantly boosted funding for highways, the total DOT budget will climb $2.1 billion to $50.1 billion. DOT R&D will share in these gains.

White House revamps export control policy on encryption products

Bowing to congressional pressure, the Clinton administration has drastically revamped its export control policy on encryption products. Despite the reversal in course, proponents of more liberalized export controls still are not completely happy with the administration’s position.

The proposed changes conform to a much more significant extent with the goals of House bill H.R. 850, the Security and Freedom through Encryption (SAFE) Act, which has strong support in Congress. They include easing export restrictions on retail products, allowing a higher bit standard for encryption exports, and supporting decryption technologies for law enforcement agencies.

The proposal would decontrol the sale of 64-bit encryption products (the existing standard is 56 bits), which would bring U.S. policy into compliance with the Wassenaar Agreement, a multinational treaty on export controls. In addition, 64-bit encryption products could now be imported under a license exception after only a one-time technical review, a proposal that is also included in the SAFE Act. However, encryption products could not be exported to the so-called “Terrorist 7” nations that support terrorism. Finally, foreign nationals would no longer need an export license to do encryption work for U.S. firms. The administration announced its changes in September 1999 and said it would unveil draft export control regulations by mid December.

In addition to the changes in export control policy, the administration also proposed legislation aimed at dealing with the concerns raised by law enforcement and national security officials about the liberalization of the sale of encryption products. The Cyberspace Electronic Security Act would create a mechanism by which government officials could obtain access to data protected by encryption products while providing greater protection of the rights and privacy of data holders. The bill would require that officials first obtain a court order before they could obtain the key to an encryption system. Currently, keys can be accessed with a simple grand jury subpoena. The bill would also provide protection for the techniques used by law enforcement officials for decoding encrypted material.

Reaction to the administration’s new policy was cautious at best. Proponents of the SAFE Act say it is a significant step towards achieving their goals, but they are waiting to see if truly substantive changes are implemented. “This announcement is long on potential but short on detail, and Congress will be watching carefully to make sure that the regulations issued in December match the policy announced today,” said Rep. Bob Goodlatte (R-Va.).

Thomas J. Donahue, president of the U.S. Chamber of Commerce, said in a letter to Goodlatte that the SAFE Act addresses several issues that the new policy does not, including such issues such as codifying the policy, providing a time frame for technical review, preventing the government from mandating the use of certain types of encryption products, and prohibiting mandatory key escrow accounts. “We are concerned that loosening export controls on encryption products through the regulatory process without the legislative safeguards contained in H.R. 850 could be detrimental to the long-term interest of the business community,” he said.

The administration counters that the new policy properly balances the interests of all parties involved by trying to meet the privacy and security concerns of the public while allowing law enforcement officials to do their jobs. Attorney General Janet Reno called the new policy “a balanced approach which will encourage the use of encryption but protect national security and public safety.” One of the SAFE Act’s most ardent supporters, Americans for Computer Privacy, seems to concur with the attorney general. “This development is the new policy America needs to maintain its technological leadership, strengthen the government’s abilities to protect our critical infrastructure, and fight crime in the Information Age,” said the group in a statement.

At least one member of Congress, however, questioned whether the administration was caving in to the demands of the high-tech industry and sacrificing national security needs. Rep. Curt Weldon (R-Penn.) said he believed that the United States may be giving up its edge in information security. “I’m not convinced that what we’re doing here is necessary and logical,” Weldon said. “I want to be absolutely certain that we maintain our information superiority.”

“From the Hill” is prepared by the Center for Science, Technology, and Congress at the American Association for the Advancement of Science in Washington, D.C., and is based on articles from the center’s bulletin Science & Technology in Congress.