From the Hill – Spring 1999

President’s budget would cut FY 2000 R&D spending by $1 billion

Although the Clinton administration is projecting big surpluses in the federal budget in the coming years, President Clinton’s proposed fiscal year (FY) 2000 budget includes only modest increases in spending. Federal R&D, which did so well last year, would actually receive $1.3 billion, or 1.8 per cent less, than in FY 1999.

In drafting its budget proposals, the administration was constrained by caps on discretionary spending that were enacted in 1997. Most federal R&D funds reside in the discretionary portion of the budget, which is the one-third of the budget subject to annual appropriations.

The administration’s budget actually exceeds the FY 2000 cap by $18 billion. The president is proposing to offset this spending with a 55-cent-a-pack increase in the cigarette tax and other measures, including a one-year freeze on Medicare payment rates to hospitals.

Some R&D programs would receive cuts in their budgets; others, small or moderate increases. Despite the tight spending, the budget proposal includes significant increases for a few priority programs and some new initiatives.

The administration’s Information Technology for the 21st Century (IT2) initiative would receive $366 million for long-term fundamental research in computing and communications, development of a new generation of powerful supercomputers and infrastructure for civilian applications, and research on the economic and social implications of information technology. The National Science Foundation (NSF), the Department of Defense (DOD), and the Department of Energy (DOE) would be the lead agencies in this effort.

For the first time since the Carter administration, nondefense R&D would exceed defense R&D, fulfilling a Clinton administration goal. Nondefense R&D would increase by $1.3 billion or 3.5 percent to $39.4 billion, or 51 percent of total R&D. Defense R&D would decline by $2.7 billion or 6.6 percent to $38.5 billion. Basic research continues to be a high priority and would increase by $816 million or 4.7 percent to $18.1 billion. Applied research funding would remain flat at $16.6 billion. The National Institutes of Health (NIH) budget, including non-R&D components, would increase by $318 million or 2.1 percent to $15.3 billion, far less than the 15 percent FY 1999 increase. Most institutes and centers would receive increases between 2 and 3 percent. The Center for Complementary and Alternative Medicine, established in the FY 1999 budget, would receive $50 million.

NSF’s R&D budget would increase by 6.5 percent to $2.9 billion. The total NSF budget request is $3.9 billion. The Directorate for Computer and Information Science and Engineering (CISE) would receive $110 million in new funds for IT2, for a total CISE budget of $423 million, an increase of 41.5 percent. Another $36 million for IT2 would come from a major research equipment account for the development of terascale computing systems. The Integrative Activities account, which was established last year to support emerging cross-disciplinary research and research instrumentation, would receive $161 million, including $50 million for a biocomplexity initiative.

DOD’s R&D would decrease by 7.7 percent or $2.9 billion to $35.1 billion, mostly because of cuts in weapons development activities. Although DOD’s total budget would increase, the additional spending would be largely for military salaries and weapons procurement. DOD basic research would total $1.1 billion, only $6 million above FY 1999, while applied research would fall by 6.1 percent to $3 billion. The Defense Advanced Research Projects Agency’s research budget for biological warfare defense would nearly double to $146 million.

The National Aeronautics and Space Administration’s (NASA’s) R&D budget would increase slightly to $9.8 billion, while NASA’s total budget would decline to $13.6 billion. The International Space Station project would receive $2.5 billion, up $178 million or 7.7 percent. It includes $200 million to ensure that Russian components for the station are completed on schedule. Space science would receive a 3.7 percent increase to $2.2 billion, and Earth science would receive a 3.2 percent increase to $1.5 billion. However, the budget proposes a steep 25 percent cut in aerospace technology programs, which fund NASA’s aeronautics R&D and new space vehicles development.

DOE’s nondefense R&D budget of $4 billion (up 6.4 percent) includes $70 million for the Scientific Simulation Initiative, DOE’s contribution to IT2. The Accelerated Strategic Computing Initiative (ASCI) would also receive a significant increase (13 percent to $341 million). The budget also includes $214 million for the Spallation Neutron Source and operating funds for a large number of scientific user facilities slated to come on line in FY 2000. Solar and renewables R&D and energy conservation R&D would each receive 20 percent increases.

Legality of federal funding for human stem cell research debated

A new debate has broken out on whether federal funding of human stem cell research would violate a congressional ban on federal funding for human embryo research. The debate has been spurred by the announcement by privately funded scientists at the University of Wisconsin and Johns Hopkins University that they had successfully isolated and cultured human stem cells.

The heart of the debate centers on whether a stem cell is an “organism” and thus falls under the ban, which is designed to prevent any federal funding of research that would lead to the creation of a human embryo or that would entail the destruction of one. The debate is complicated by the fact that stem cells come in two forms: totipotent and pluripotent. Totipotent stem cells have “the theoretical and perhaps real potential to become any kind of cell and under appropriate conditions, such as implantation in a uterus, could become an entire individual,” according to testimony given by Dr. Lawrence Goldstein of the San Diego School of Medicine at a hearing of the Senate subcommittee that appropriates funds for medical research at NIH. On the other hand, pluripotent stem cells that have been obtained from early stage embryos have only limited potential and “can form only certain kinds of cells, such as muscle, nerve or blood cells, but they cannot form a whole organism,” Goldstein said. Scientists believe that pluripotent stem cells have the greatest potential for producing major breakthroughs in medical research.

Although the scientific definition of pluripotent stem cells may be clear, the legal, moral, and ethical issues surrounding human stem cell research are being vigorously debated. At one of a series of hearings that the Senate panel held on this issue, a representative of the National Conference of Catholic Bishops argued that obtaining pluripotent stem cells would still require the destruction or harming of a human embryo and thus should be included in the ban.

On January 19, 1999, the Department of Health and Human Services (HHS), which oversees NIH, released a ruling concluding that “current law permits federal funds to be used for research utilizing human pluripotent stem cells.” In the ruling, however, HHS said that NIH plans to “move forward in a careful and deliberate fashion to develop rigorous guidelines that address the special ethical, legal, and moral issues surrounding this research. The NIH will not be funding any research using pluripotent stem cells until guidelines are developed and widely disseminated to the research community and an oversight process is in place.”

Whether Congress will honor NIH’s interpretation is uncertain. A letter protesting the ruling and signed by 70 members of Congress, including Republican leaders Rep. Richard Armey (R-Tex.) and Rep. Tom Delay (R-Tex.), was sent to HHS Secretary Donna Shalala on February 11, 1999. The letter states that “the memorandum appears to be a carefully worded effort to justify transgressing the law” and it “would be a travesty for this Administration to attempt to unravel this accepted standard.”

Bill loosening encryption software controls gains support

Republicans and Democrats in the House are uniting behind a bill that would virtually eliminate restrictions on encryption software. However, the Clinton administration is strongly opposed to the measure.

The Security and Freedom Through Encryption Act (H.R. 850), introduced by Rep. Bob Goodlatte (R-Va.) and Rep. Zoe Lofgren (D-Calif.), has 205 sponsors, as compared to 55 sponsors for a similar bill that the two House members introduced last year. Included among the 114 Republicans and 91 Democrats supporting the legislation are House Majority Leader Richard Armey (R-Tex.), House Minority Leader Richard Gephardt (D-Mo.), House Majority Whip Tom DeLay (R-Tex.), and House Minority Whip David Bonior (D-Mich.).

“Every American is vulnerable online…all because of the Administration’s current encryption policy,” Goodlatte said in a press release. “Strong encryption protects consumers and helps law enforcement by preventing crime on the Internet.” H.R. 850 has three purposes. First, it would allow Americans to purchase any type of encryption software. Currently, federal law only permits the sale of 56-bit encryption products, which are far less complicated and secure than products that can be bought from overseas manufacturers. Second, it would end most restrictions on encryption software sales by U.S. companies. Third, it would prohibit access to such software by any third party, including law enforcement officials.

At a March 4, 1999, House hearing, several administration officials opposed the legislation, arguing that the proposed relaxation of export controls goes too far and that the lack of access by law enforcement officials to the software would hurt national security. William A. Reinsch, the Department of Commerce’s undersecretary for Export Administration, said that H.R. 850 “proposes export liberalization far beyond what the administration can entertain and which would be contrary to our international export control obligation.” He added that the bill “would destroy the balance we have worked so hard to achieve and would jeopardize our law enforcement and national security.” Some members of Congress share the administration’s national security concerns. Senator Bob Kerrey (D-Neb.), who formerly was a stalwart supporter of current restrictions but who now favors loosening U.S. policy, said in an interview with the National Journal’s Technology Daily that H.R. 850 is “a very blunt instrument” that could endanger public safety and national security.

The departure from Congress of key opponents of the bill increases the likelihood that H.R. 850 can pass this session. Last year’s bill was passed by several committees but failed on the House floor. “It is a common sense issue,” Bonior said. “It makes no sense to stay out of the [encryption] market. Our country can and should compete.”

Supporters of the bill point out that key U.S. allies and economic competitors have begun loosening restrictions on encryption software. Plans by France to ease controls have prompted a review by the European Union, and Britain has dropped its plans to require third-party access to the software.

“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.