From the Hill – Fall 2003

Big R&D spending increases slated for defense, homeland security

Congress appears poised to substantially increase overall R&D spending for fiscal year (FY) 2004. However, virtually all of the increases would go for defense, homeland security, and health spending.

As of the August congressional recess, the House had approved 11 of the 13 appropriations bills; the Senate, only four. In the House plan, the federal R&D portfolio would increase by $8.4 billion, or 7.2 percent, to $125.9 billion, which is $3.6 billion more than the Bush administration’s request. About 99 percent of the increase would go to the Department of Defense (DOD), the Department of Homeland Security (DHS), and the National Institutes of Health (NIH). Spending would be flat overall for all other R&D agencies, with modest increases for some offset by cuts in others.

The House would boost DOD R&D by $7.2 billion, or 12.3 percent, to $66 billion, with weapons systems development accounting for $6.1 billion of the increase. DOD’s science and technology (S&T) account would be increased by 9.7 percent to $12.3 billion. DHS would see its R&D portfolio surge by $385 million, or 57.5 percent, to $1.1 billion, as the new department ramps up its S&T capabilities.

After five years of annual 15 percent increases, NIH budget growth would slow considerably in FY 2004. The House would match the president’s request with a 2.7 percent increase in R&D spending—a $702 million addition.

The National Science Foundation (NSF) R&D budget would increase by 6.2 percent to $5.6 billion under the House plan. But that would be about $1 billion less than is needed to fulfill the House’s pledge to double NSF’s R&D budget between FY 2002 and 2007.

The Department of Energy’s (DOE’s) Office of Science would receive a 4.3 percent boost to $3.2 billion, and the National Aeronautics and Space Administration’s R&D portfolio would edge up 0.9 percent to $11.1 billion. There would be steep cuts in R&D spending in the U.S. Department of Agriculture (9.8 percent), the Department of Transportation (15 percent), and the Department of Commerce (21.5 percent).

The House’s focus on defense and homeland security means that after several years of near-parity between defense and nondefense R&D spending, the defense share of federal R&D spending would rise to 56 percent.

In the limited numbers of agencies on which the Senate has taken action, its proposed funding levels differ only modestly from those of the House. The Senate would provide a 3.8 percent increase for NIH, a 4.7 percent increase for DOD S&T, and a 1.2 percent increase for DOE’s Office of Science.

DOE to compete Los Alamos National Laboratory contract

In the wake of several years of controversy about the national weapons labs, DOE has said that for the first time, competitive bidding will be used when the contract with the University of California (UC) to manage and operate Los Alamos National Laboratory expires in 2005. In addition, the House has added a rider to an appropriations bill that requires competition for some other DOE labs as well.

A host of problems has resulted in intense scrutiny of the labs. Allegations of espionage; lost hard drives containing classified information; and, most recently, accusations of financial mismanagement have hit Los Alamos. Lawrence Livermore National Laboratory, also managed by UC, has faced controversy over alleged security lapses and cost overruns during construction of the National Ignition Facility.

In an attempt to shore up the security of classified weapons programs, Congress in 2000 created the National Nuclear Security Administration, a semi-autonomous agency within DOE, to oversee the nation’s nuclear weapons complex, including Los Alamos and Livermore. However, the reorganization failed to quell controversy about the labs, and criticism flared up late last year when allegations of financial abuses at Los Alamos prompted the resignation of the lab’s director and management reviews by UC and DOE.

The origin of the relationship between UC and DOE dates to 1942, when Los Alamos was founded by J. Robert Oppenheimer, a UC Berkeley physicist who led the Manhattan Project, the secret federal research program to develop an atomic bomb. The following year, UC agreed to manage the facility for the federal government. Thus, a partnership was created to run Los Alamos as a government-owned contractor-operated (GOCO) laboratory. The partnership allowed the lab to benefit from the university’s ability to draw talent, even as it worked on such an inherently governmental function as nuclear weapons development. The GOCO model was adopted at numerous other government labs.

Ever since UC took over Los Alamos in 1943 and Livermore in 1952, the management contracts between the university and the government have always been renewed. But in the aftermath of each scandal, critics have called for opening the contracts to competition.

“Periodic competition should be normal,” said Rep. Billy Tauzin (R-La.), the chairman of the House Energy and Commerce Committee, at a May 1 hearing. “But the pressure of competitive bidding, one of the most powerful cleansers of management problems, has never really bore down on those responsible for the [Los Alamos] lab’s contract.”

Sen. Pete Domenici (R-N.M.), a staunch supporter of the labs, has also expressed support for competition. “We all know that the present manner in which the laboratory is managed must change in ways that are inevitable,” he said in an April speech at Los Alamos. “I worry that the attacks on Los Alamos will only intensify if we do not take dramatic action to improve the lab’s management and reputation.”

Others, however, worry that the uncertainty surrounding competition and the possibility of losing UC’s generous employee benefits could lower morale at the lab and cause a wave of retirements, hindering the lab’s scientific work. Recognizing these concerns, Domenici said he would support competing the contract only if all current employees, except for the most senior officials, are retained and current compensation and retirement benefits are kept in place.

On April 30, Energy Secretary Spencer Abraham announced DOE’s intention to compete the Los Alamos contract in 2005, while endorsing conditions similar to Domenici’s.

UC has expressed reluctance about participating in the competition. “We want to compete and we want to compete hard,” UC President Richard C. Atkinson said in testimony before the Energy and Commerce Committee. “We believe, with every fiber of our institutional being, that continued UC management is in the absolute best interests of the nation’s security.” But he added that, “It is one thing to manage the national weapons laboratories at the request of the federal government because of the unique scientific capabilities of the university, and quite another to actively pursue what could now be interpreted as a business venture. I am not sure our faculty or the people of California would support such action.”

Some observers have expressed concern about the overall health of DOE’s GOCO partnerships. Siegfried Hecker, a former director of Los Alamos, recently lamented the lack of trust that has grown between DOE and its contractors. Speaking at a June 24 hearing before the House Energy and Natural Resources Committee, he said that DOE’s relationship with the laboratories, driven to a large extent by pressure from Congress, “has changed from one of partnership to an arms-length government procurement.” DOE has appointed a blue-ribbon commission to study these concerns, which is expected to issue a report in the coming months.

The decision by the House to add language regarding lab management to the DOE FY 2004 funding bill has added a new element to the debate. The clause, proposed by Rep. David Hobson (R-Ohio), requires a competitive bidding process for all DOE contracts that have not been competed in the past 50 years. This would affect several labs, including Los Alamos and Livermore; Lawrence Berkeley, which is also operated by UC; Argonne, which is run by the University of Chicago; and Ames, which is managed by Iowa State University.

Although the clause appears to be designed primarily to force competition at Livermore, which just celebrated its 50th anniversary, the other labs cited have generally received good grades for their operations, and some critics argue that competing such contracts would cost more money than it would save. In the case of Ames, the lab contract may be unattractive to other potential bidders because it is located on the Iowa State campus. Opponents of Hobson’s rider argue that DOE should retain the authority to make competition decisions on a case-by-case basis.

The language in the bill also includes a requirement that no conditions be imposed “that may have the effect of biasing the competition in favor of the incumbent contractor.” According to report language accompanying the bill, this provision is intended to prevent Abraham from requiring that the existing Los Alamos workforce be protected.

White House proposes standardizing peer review process

On August 29, the Office of Information and Regulatory Affairs (OIRA) in the White House Office of Management and Budget (OMB) issued a draft proposal to standardize the process that federal agencies use when conducting peer review of scientific information that will be used in setting regulations and policies. The proposal has been met with both praise and concern.

In announcing the standards, OIRA administrator John D. Graham stated, “Peer review is an effective way to further engage the scientific community in the regulatory process. A more uniform peer review policy promises to make regulatory science more competent and credible, thereby advancing the administration’s smart-regulation agenda. The goal is fewer lawsuits and a more consistent regulatory environment, which is good for consumers and businesses.”

The draft guidelines attempt to establish a process by which federal agencies would select peer reviewers, manage the review process, and access scientific information used in setting regulations or policies. For example, OMB recommends that agencies scrutinize scientists for “real or perceived conflicts of interests” in order to ensure that the individual can approach the subject in an “open-minded and unbiased manner.” In this regard, federal agencies should consider whether the individual “(i) has any financial interests in the matter at issue; (ii) has, in recent years, advocated a position on the specific matter at issue; (iii) is currently receiving or seeking substantial funding from the agency through a contract or research grant (either directly or indirectly through another entity, such as a university); or (iv) has conducted multiple peer reviews for the same agency in recent years, or has conducted a peer review for the same agency on the same specific matter in recent years.”

In a Washington Post article, a representative of the Center for Regulatory Effectiveness (CRE) said the OMB proposal would “put additional teeth in what is meant by peer review.” CRE further suggested that this would provide an opportunity to require federal agencies to reevaluate environmental and dietary guidelines.

The guidelines state that, “Agencies need not, however, have peer review conducted on studies that have already been subjected to adequate peer review.” Further, they state that when considering significant regulatory information, “peer review undertaken by a scientific journal may generally be presumed to be adequate.” However, they also note that, “This presumption is rebuttable based on a persuasive showing in a particular instance,” leaving a window of opportunity open to a reevaluation as suggested by CRE.

OMB Watch, a nonprofit organization that follows public right-to-know, budget, and regulatory issues, expressed concern that the proposal could create a centralized system “dangerously vulnerable to political manipulation.” For example, it cites a clause in the guidelines that would allow federal agencies to retain an outside entity to manage peer review. OMB Watch said that such direct control over the peer process by a nongovernmental organization could result in undue influence over regulations by industry groups.

The draft proposal, which was not published in the Federal Register but issued as an OMB Bulletin, is open for public comment until October 28, 2003, and is to take effect in January 2004.

Moderate Republicans ask Bush to revise stem cell policy

New research results have prompted moderate Republicans in the House and Senate to focus attention on the issue of federal funding for human embryonic stem cell research. In March, Johns Hopkins University researchers announced the discovery of a promising new way of growing stem cell lines. Until now, stem cells have been produced with the use of mouse cells as “feeder cells” to keep the stem cells from differentiating into more specialized tissue. However, cells that come into contact with mouse cells can be contaminated with animal viruses, presenting a danger to potential patients. The new technique uses human bone marrow cells instead of mouse cells, eliminating a potential obstacle from scientists’ long-term goal of using stem cell transplants to treat conditions such as diabetes and Parkinson’s disease.

President Bush’s stem cell research policy, announced on August 9, 2001, allows federally funded stem cell researchers to work only on cell lines already created at the time of the announcement, making research on lines created with the new method ineligible for federal funding.

Initially, the administration compiled a list of 78 eligible cell lines, but to date only 11 of these lines have been made available to researchers. Thus, many scientists had been pressing the president to revisit the policy even before the Johns Hopkins discovery.

In response to the concerns of stem cell researchers, 11 moderate House Republicans sent a letter to President Bush on May 15 urging him to review his stem cell policy to determine whether enough lines have been made available and whether changes should be made to allow for the creation of new lines such as those produced at Johns Hopkins. The letter’s signatories included Rep. Michael N. Castle (R-Del.), a leader of the Tuesday Group, an informal coalition of Republican moderates and Rep. Sherwood Boehlert (R-N.Y.), chairman of the House Science Committee.

In the Senate, meanwhile, Sen. Arlen Specter (R-Pa.), the chairman of the Labor, Health and Human Services (HHS) Appropriations Subcommittee, held a May 22 hearing on the issue at which he sharply questioned NIH Director Elias Zerhouni. Zerhouni defended the administration’s policy and insisted that scientists are moving as fast as possible. He argued that there is no current need for new cell lines, while acknowledging that such a need may arise in the future. However, James Battey, the chair of the NIH Stem Cell Task Force, testified that currently the limiting factor in the progress of stem cell research is a lack of scientists trained in the techniques needed to work on stem cells. Specter criticized Zerhouni for failing to find a nongovernment scientist willing to back the administration’s position.

Specter also renewed longstanding complaints about communication problems with NIH after Zerhouni informed the subcommittee that 16 of the 78 cell lines eligible for federal funding have not been exposed to mouse cells. Specter contended that HHS Secretary Tommy Thompson had previously informed him that all of the eligible lines had been exposed to mouse cells, and he sharply rebuked Zerhouni for this “flat-out contradiction.” In the past, Thompson has faced criticism from Specter for allegedly allowing his staff to edit communications from NIH scientists to Specter’s subcommittee. The 16 uncontaminated lines are not among the 11 cell lines currently available.

One witness, John Kessler of Northwestern University Medical School, confronted Zerhouni’s statements head on. He argued that scientists should work on different techniques for developing stem cells “in parallel” but that the administration was forcing scientists to proceed “serially.” Both the technique used to derive stem cells and their genetic makeup can alter the cells’ properties in important ways, he said, creating a need for the derivation of new lines.

The administration’s stem cell policy applies only to federally funded research, so whether or not President Bush agrees to revisit the issue, privately funded researchers, such as those that produced the recent discoveries at Johns Hopkins, may continue to study new cell lines. As these researchers and scientists abroad report new discoveries, policymakers will face the continuing challenge of ensuring that U.S. policy stays up to date.

Congress considers ethical, social impact of nanotechnology research

House and Senate bills promoting nanotechnology R&D have highlighted differences in Congress concerning the ethical, legal, and social implications (commonly referred to as ELSI) of the emerging technology.

Nanotechnology research involves manipulating matter at the atomic and molecular levels. (One nanometer is a billionth of a meter.) Researchers foresee promising applications in an array of fields, including electronics, medicine, and environmental technology. Proponents of nanotechnology envision everything from improved water filtration devices for cleaning the environment to nanosized robots that can be injected into the body and deliver drugs to targeted cells. Others, however, express concern that unleashing these promising products prematurely could unintentionally lead to new health and environmental hazards that science and society will be ill-prepared to handle.

During the House Science Committee debate on the House bill, the Nanotechnology Research and Development Act of 2003, which would authorize $2.4 billion in research funds through FY 2006 in support of interagency nanotechnology activities, Reps. Brad Sherman (D-Calif.) and Chris Bell (D-Tex.) proposed devoting 5 percent of the total federal nanotechnology budget to research into ELSI issues. The 5 percent allocation mirrors a similar set-aside for ELSI programs in the interagency Human Genome Project established in 1988.

Opponents to the Sherman/ Bell amendment, including House Science committee Chairman Sherwood Boehlert (R-N.Y.) and Rep. Brian Baird (D-Wash.), argued that such a percentage was arbitrary and unnecessary in light of language in the House bill that federal programs include activities that “ensure that societal and ethical concerns will be addressed as the technology is developed.”

Other House members, including Reps. Dana Rohrabacher (R-Calif.) and Joe Barton (R-Tex.), raised the specter of establishing a “social elite” of Ph.D.s analyzing societal implications that, in their view, should be assessed by the public at large. “We don’t need a bunch of pontificators,” Rohrabacher said. He argued that it is the role of Congress to debate and determine ethical issues.

Baird, who is a Ph.D. psychologist, quickly came to the defense of social scientists. “I’d like to disassociate myself from my colleague’s comments,” he stated. “We need bright people” in order to realize the full potential of this burgeoning field. Baird said that as members of the House Science Committee “we should not demean the contributions of scientists.”

Although the Sherman/Bell amendment failed to pass, the bill as a whole passed the House 405 to 19.

Whereas the House bill gives the responsibility for defining and managing ELSI issues to the participating agencies, with coordination by an interagency committee, the Senate bill would elevate the ethical and societal components of the federal program.

The 21st Century Nanotechnology Research and Development Act, introduced by Sens. Ron Wyden (D-Ore.) and George Allen (R-Va.), would create a separate American Nanotechnology Preparedness Center funded through NSF at $5 million annually. The center would conduct studies to help decisionmakers better anticipate ELSI issues that are likely to arise as the field matures.

Another key difference between the House and Senate bills is the management and composition of an external advisory committee to provide oversight and assessment of the progress of the interagency research programs. The House bill would give responsibility to the existing President’s Council of Advisers on Science and Technology (PCAST), which would tap nanotechnology and ethical experts as appropriate. The Wyden bill, on the other hand, would create a separate stand-alone National Nanotechnology Advisory Panel, which would include such experts as part of its membership.

PCAST has already taken steps to establish its role as an oversight committee. At a June 10 meeting, it discussed a Nanotechnology Work Plan. The plan includes the creation of three task forces composed of PCAST members, each to explore a special topic: Materials/Electronics/Photonics, Energy/Environment, and Medical/Bio/Social.

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