From the Hill – Summer 2004

Most R&D agencies prepare for budget cuts in fiscal year 2006

The Bush administration’s plan to reduce the federal deficit in half over the next five years would mean cuts in funding for most R&D funding agencies, with the steepest cuts coming in fiscal year (FY) 2006 after this year’s elections. Only defense, homeland security, and space would be spared.

A May 19 Office of Management and Budget (OMB) memo, which was leaked to the media in early June, told federal agencies to begin planning for budget cuts in most domestic programs. Although the FY 2005 budget process is proceeding at a snail’s pace in Congress, federal agencies have already started formulating their FY 2006 budget requests.

For FY 2006, the OMB memo means that all R&D funding agencies except the Department of Defense (DOD), the National Aeronautics and Space Administration (NASA), the Department of Energy (DOE), and the Department of Homeland Security (DHS) must plan for cuts to their R&D portfolios. The National Science Foundation (NSF) and the National Institutes of Health (NIH), which would receive small increases in the administration’s proposed FY 2005 budget, would see their gains reversed in FY 2006.

Below are some budget projections for FY 2006 made by the American Association for the Advancement of Science that are based on the OMB directive.

NIH will have to plan for a 2 percent or $600 million cut in FY 2006 after a 2.6 percent increase in FY 2005, leaving the agency with a total budget of $28.2 billion, barely above this year’s $28 billion budget. After factoring in expected inflation, NIH’s FY 2006 budget would be 2 percent below this year’s funding level.

NSF would see its proposed gains in FY 2005 reversed with a 2 percent or $85 million cut for its R&D programs in FY 2006, leaving NSF R&D below this year’s funding level after adjusting for inflation.

Although DOE would see a gain in its R&D budget in FY 2006 because of projected increases for its defense and energy R&D portfolios, the budget for its Office of Science would fall 2.4 percent or $81 million in FY 2006 following a proposed cut in FY 2005. This amounts to a 5.4 percent cut in two years after adjusting for inflation.

Other R&D funding agencies would see further cuts in FY 2006 after proposed cuts in FY 2005. Total cuts over two years after inflation are projected as follows: Department of Agriculture (8.3 percent), the Environmental Protection Agency (11.6 percent), the Department of Commerce’s National Oceanic and Atmospheric Administration (6.2 percent), Commerce’s National Institute of Standards and Technology (13.8 percent), and the Department of the Interior (8.4 percent).

Although R&D budgets in DOD, DHS, and NASA would increase every year during the next five years, some of their programs would not be as fortunate. DOD would cut its support of “S&T” (basic and applied research plus technology development) steeply in FY 2005 and by another percentage point in FY 2006, leaving the DOD S&T portfolio 18 percent smaller after inflation than in FY 2004. And although NASA R&D would increase overall in FY 2006 to ramp up its moon and Mars activities, funding for biological and physical research and earth science would fall steeply in FY 2006.

Congress probes outside earnings of NIH employees

A Congressional committee has begun investigating possible problems stemming from the involvement of employees of the National Institutes of Health (NIH) with outside organizations. The congressional interest was prompted by negative stories in the media, including a December 2003 Los Angeles Times article, which reported that high-level NIH scientists have received large payments from their activities with biotechnology firms and drug companies.

Under current policies, NIH employees are able to accept compensation from awards or private-sector consulting while retaining federal employment. But there is concern that financial ties between federal scientists and outside pharmaceutical or biotech firms may introduce bias into the research process.

In response to the initial outcry over the agency’s ethics rules, NIH Director Elias Zerhouni formed a blue-ribbon panel to analyze conflict-of-interest policies and offer recommendations. The panel’s report, released in early May, recommends improving the transparency of outside activities and banning the use of stock options for compensation. It also would completely prohibit some high-level employees from consulting activities.

In May, the House Energy and Commerce Subcommittee on Oversight and Investigations held two hearings on the issue. At a May 12 hearing, several members indicated that they were unsatisfied with what they considered the perceived leniency of the panel’s recommendations and concerned over possible loopholes in the proposed new guidelines.

At both hearings, former and current NIH administrators defended the practice of outside consulting. They argued that compensation from and interaction with the private sector is crucial to recruit and retain top scientific talent. Norman Augustine, a member of the blue-ribbon panel, said that without outside income, NIH scientists would be underpaid compared to their private-sector colleagues and more likely to leave federal employment. But this argument didn’t satisfy some members of the committee, including Rep. Diana DeGette (D-Col.), who said that she, like other members of Congress, earn much less than private colleagues with the same experience.

Zerhouni and others asserted that public-private collaborations are essential to the advancement of public health and the translation of knowledge into medical practice. Although members of the committee acknowledged the necessity of some level of private-sector interaction, they cited Cooperative Research and Development Agreements, the formal partnering mechanism between the federal government and industry or academia, as a method for external collaborations.

At a second hearing, the committee examined a specific conflict-of-interest case involving two scientists, one from the National Cancer Institute (NCI) of the NIH and the other from the Food and Drug Administration (FDA). The NCI and the FDA had worked in formal collaboration with a private bioscience firm to develop and commercialize an ovarian cancer screening tool. The two federal scientists, who acted as co-principal investigators for the public-private partnership, were recruited for outside consulting purposes by a competitor of the private partner. The scientists’ requests to consult with the competing firm, which also developed technology to detect biomarker patterns, were approved by the FDA and NCI. After learning that the scientists were involved with its competitor, the private partner brought the issue to the NCI’s attention.

Arguing that they were unaware that the firms would be regarded as competitors, the NCI and FDA scientists told the subcommittee that they had recently ceased their relationship with the competing firm. Members of subcommittee felt that even the appearance of ethical improprieties in this case, and in other cases discussed at the hearing, merits changes to NIH policies. Rep. James Greenwood (R-Penn.) said that when comparable situations occur, damage is done both to the partnership and to public trust of the agency.

Although acknowledging the good intentions of Zerhouni and the panel, subcommittee members at the conclusion of the hearings remained concerned about the conflicts-of-interest regulations. Rep. DeGette suggested that the situation may warrant a “ban on outside compensation,” although that outcome appears to be remote at this time. Subcommittee members said they will continue to press for even greater transparency in private-sector activities and to require a larger number of employees to report financial disclosure than the blue-ribbon panel advocated.

Subsequent to the NIH hearings, the FDA announced plans for a comprehensive assessment of its policies regarding employee involvement with outside activities. Although the FDA has more stringent regulations concerning its employees’ interactions with firms in the industries it regulates, the NIH case indicates that the FDA may be in need of a policy review as well.

White House, Congress promote efforts to boost supercomputing

A White House task force released a report in early May concluding that current federal efforts in supercomputing are inadequate. Meanwhile, several bills have been introduced in Congress to bolster U.S. R&D on supercomputing.

In its Federal Plan for High End Computing, the White House High End Computing Revitalization Task Force reports that scientists lack access to the latest, cutting-edge, high-performance computers (HPCs). It asserts that the private sector’s current focus on developing computers for personal and business applications has led to a dearth of investment in scientific computing resources. This has resulted in the creation of a high-cost, low-volume market that provides economic disincentives for industry to devote scarce resources to develop HPCs. Thus, HPCs today, especially those made from commercial off-the-shelf components, lack sufficient computing ability to solve complex scientific challenges, ranging from weapons simulation and satellite data processing to aircraft engineering and atmospheric modeling.

In Congress, Rep. Judy Biggert (R-Ill.) has introduced two bills: the High Performance Computing Revitalization Act of 2004 (H.R. 4218) to coordinate agencies and leverage HPC investments, and the Department of Energy (DOE) High-End Computing Revitalization Act of 2004 (H.R. 4516) to support a project at the Oak Ridge National Laboratory.

The House Committee on Science, which shares the concerns expressed by the White House task force, held a hearing on May 13 to address H.R. 4218. Rick Stevens, director of the National Science Foundation’s Teragrid Project and the Mathematics and Computer Science Division at Argonne National Laboratory–located in Biggert’s district–warned that without additional federal action, the United States will be unable to maintain its leadership status in the future. He stressed that many of the sciences, including materials science, genomics, astrophysics, climate modeling, high-energy physics, and cosmology, rely on access to supercomputers for progress and advancement. Stevens added that U.S. dominance in scientific research is directly proportional to supercomputer investment and availability.

H.R. 4218 would amend the High-Performance Computing Act of 1991 to create an HPC R&D program under the leadership of NSF and DOE. It is aimed at advancing the capacity and capability of HPCs and networks for use by researchers through R&D targeted to systems, networks, and network applications relevant to the public and private sectors. It establishes security standards and practices for systems and mandates an increase in the number of graduates and undergraduates studying software engineering, computer science, computer and network security, applied math, library science, and information and computational sciences.

Although H.R. 4218 has been endorsed by the Bush administration’s top science advisor, Jack Marburger, director of the Office of Science and Technology Policy, Stevens expressed concern that an overemphasis on research instead of deployment would allow firms to comply without actually providing new hardware. Stevens nonetheless voiced support for the overall goals of the bill.

H.R. 4516, a companion to S. 2176 introduced by Senators Jeff Bingaman (D-N.M.) and Lamar Alexander (R-Tenn.), calls for R&D in computing architectures and software development; sustained access to HPCs by the research community; technology transfer to the private sector; and coordination with other federal agencies. The bill allocates $50 million in FY 2005 and increases funding to $60 million in FY 2007.

Finally, the bill would give $25 million to the Oak Ridge National Laboratory to build a supercomputer capable of 50 trillion floating point operations per second (teraflops), at an estimated cost of between $150 million and $200 million. It would be faster than the Earth Simulator, a supercomputer developed by Japan in 2002. The development of the Japanese computer has served as a catalyst for renewing U.S. leadership in supercomputing.

“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.

Cite this Article

“From the Hill – Summer 2004.” Issues in Science and Technology 20, no. 4 (Summer 2004).

Vol. XX, No. 4, Summer 2004