April 26, 2004
Bush Administration To Cut Many Categories Of Research Spending

Kei Koizumi, US federal R&D budget analyst for the American Association for the Advancement of Science (AAAS), claims that most categories of research and development spending will see inflation-adjusted declines in the Bush Administration's long-term budget plan through FY2009.

The president has proposed budget decreases at nine of the 12 federal agencies with the largest R&D portfolios, with only the Department of Defense (DOD), the Department of Homeland Security (DHS), and the National Aeronautics and Space Administration (NASA) staying ahead of inflation. Large projected increases in NASA and DHS obscures the steep cuts in all other nondefense agencies. In fact, DHS will see a $100 million increase from FY2004 to FY2005, with small increases projected each following year, culminating in a 25 percent boost and record-breaking funding levels over five years after adjusting for inflation.

Although the space exploration programs at NASA will benefit from large funding increases, all other R&D areas will decline dramatically over the next five years, including Earth Science (down 15.9 percent), aeronautics (down 16.2 percent), and Biological and Physical Research (down 11.8 percent).

AAAS analysis shows that even a past favorite like the National Institutes of Health (NIH) is susceptible to cuts. Over the next five years, NIH's $27 billion portfolio will see a modest rise due to increases in biodefense research. But funding for non-biodefense programs will fall by seven percent.

Many R&D funding programs face steep cuts over the next five years:

  • Department of Energy (DOE) programs will see dramatic decreases such as: energy R&D (down 21 percent by FY2009), fossil energy R&D (down 22 percent), and energy conservation (down 26 percent).
  • Department of Agriculture (USDA) intramural research will decline by 19 percent and extramural research grants will see a 28 percent cut.
  • At the Department of Commerce, the Bush Administration would eliminate the Advanced Technology Program (ATP), as well as cut the budgets of the National Oceanic and Atmospheric Administration (NOAA) and the National Institute of Standards and Technology (NIST) by 10.5 percent and 17.3 percent respectively by FY 2009.

"In order to meet deficit reduction targets, even agencies receiving modest increases like NIH and NSF will see their R&D funding fall beginning in FY 2006," Koizumi said.

Why does Bush think the US can not afford to spend more on science? Lots of reasons. Bush has signed into law a prescription drug benefit that is going to cost $534 billion over the next decade (and that estimate is probably low if past Medicare entitlement spending estimates are indicative). This is especially worrisome because as government spending on drugs increases the pressure to implement drug price controls will increase as well. By reducing the profitability of new drug development and price controls would lead to a drop in private sector funding of medical research. Other entitlements for the elderly are set to grow. The Iraq war and occupation are adding hundreds of billions of more costs. Bush is effectively robbing the future to pay for more immediate demands of various interest groups and for his expensive foreign policy pursuits. See the chart at the bottom of the AAAS full report for how the projected changes in R&D fuding break out through fiscal year 2009. See here for other formats for the same AAAS report.

Not surprisingly the White House is spinning the R&D numbers in a much more positive light.

With the President's FY 2005 budget proposal, total federal R&D investment during the first term will be increased 44%, to a record $132 billion in 2005, compared to $91 billion in FY 2001.

President Bush's 2005 budget request commits 13.5% of total discretionary outlays to R&D - the highest level in 37 years. Not since 1968 and the Apollo program have we seen an investment in science of this magnitude.

Of this, the Bush budget commits 5.7% of total discretionary outlays to non-defense R&D. This is the third highest level in the last 25 years.

Funding for Basic Research, the fuel for future technology development, is at an all-time high of $26.8 billion in FY 2005, a 26% increase from FY 2001.

The President has completed the doubling of funding for the national Institutes of Health (NIH). Funding for NIH during the four years of this Administration is increased more than 40% since FY 2001 to $28.6 billion.

Funding for NSF during the four years of this Administration is increased 30% over FY 2001 to $5.7 billion.

The White House leaves out the fact that most of the NIH budget doubling occurred during Clinton's term in office and was done in large part because some Republican and Democratic party US Senators decided it was a wise thing to do. Some of those Senators have since left office and NIH budget growth doesn't appear to be as well supported politically at this point. Sorry I don't have a URL for this brief aside on NIH budget politics but I read an account of how it happened a couple of years ago.

The White House also ignores what it intends to do in specific categories and what it intends to do out beyond FY2005. The growth in NASA spending and Department of Homeland Defense spending is hiding cuts in other areas.

In my view most of the increase in NASA spending is a waste. The only exception is the plan to develop a nuclear powered space probe which will help to enable the development of defenses against asteroids. There are higher science priorities with much bigger financial and quality-of-life payoffs than a mission to the Moon and Mars.

Biological research can lengthen our lives, make us healthier, smarter, and generally more capable. The biological research will eventually produce treatments that will extend youth and middle age. This will increase the length of time that people can work and therefore would allow us to entirely avoid the financial catastrophe of tens of billions of dollars of unfunded liabilties for care for the elderly that is looming as a growing fraction of the population becomes too old to work. The acceleration of anti-aging and rejuvenation research is the best way to solve the demographic problem of aging populations. See Aubrey de Grey's writings on strategies of engineered negligible senescence for a roadmap of the types of research we ought to be pursuing that could save us tens of trillions of dollars in money that will otherwise have to be spent on the aged. The ability to reverse aging will also unleash huge increases in productivity and economic growth that would produce orders of magnitude more wealth than the cost of the research spent to make it possible.

Energy research in another area which can pay itself back many times over. Newer energy technologies will reduce trade deficits, make our air healthier to breathe, and reduce the threat of terrorism by reducing the financial flows to the Middle East. Another benefit will be greatly reduced defense costs. Instead of cutting energy research we ought to launch a major effort at an additional $10 billion dollars per year aimed at obsolescing oil by pursuing research into a number of alternatives. While Bush purports to be big on national defense he misses the obvious point that energy policy is an essential element of national security policy and energy policy is going to become more important for national security in the future.

The Bush Administation's plans for research and development spending are short-sighted. Scientific advances can solve problems in ways that pay back orders of magnitude more than the original research will cost to fund. Budget deficits and huge unfunded liabilities for those who are going to become elderly in the coming decades combined with the threat of terrorism and the greater globall competition for a limited supply of oil call for mammoth attempts to research and innovate our way to solutions.

Share |      Randall Parker, 2004 April 26 01:25 PM  Policy Science

Stefan Jones said at April 26, 2004 5:34 PM:

Awww, giving money to scientists just encourages them to find out uncomfortable stuff about ourselves and the universe.

* * *

The president's science advisor, Dr. John Marberger, was the head of SUNY Stony Brook while I was attending. A nice guy who not only supported the SF convention my friends and I ran, but gave a science lecture or two. (He worked with lasers, don't remember the details.)

I had hope that he might bring some sense to the Administration, but he just sort of disappeared after 9/11. He only resurfaced a few months back, after the Union of Concerned Scientists raised a stink, and then only to issue a denial and give some interviews.

If he had any gumption he'd resign and write a book. I'd love to hear about his conversations with Bush on topics scientific. ("Really? Round? How can it have four corners, then?")

Froth said at April 26, 2004 9:54 PM:

Yeah, nothing says far-sighted innovation like tons and tons of government spending. I'd love to hear about Stefan's conversations with someone who'd read a newspaper in the last several decades. "Really? Big government is ineffective at just about anything it does? Won't that delay the communist utopia?" Wipe the drool off your chin, boy!

Fly said at April 27, 2004 5:29 PM:

“Yeah, nothing says far-sighted innovation like tons and tons of government spending.”

In many areas I’d agree that government spending is bad. But who else funds basic research? Even company research and development is often augmented by government grants and contracts. (A friend’s company has developed a portal battlefield high tech stretcher. Too risky a venture for standard funding, government grants and contracts made it possible.)

Randall Parker said at April 27, 2004 5:58 PM:

Not surprisingly I agree with Fly. There really are such things as public goods which markets have little incentive to provide. The vast bulk of scientific knowledge is not patentable or otherwise usefully ownable. Without government funding for basic science the rate of scientific advance would be much slower.

Reason said at April 27, 2004 7:18 PM:

Hmm. Well, the rejoinder to that is that if the government had been left to its own devices with the Human Genome Project (which I think fits the category of "basic research" very well), we'd a) still be waiting for it to finish and b) still be paying for it.

Randall Parker said at April 27, 2004 7:48 PM:

Reason, I read a recent book called Digital Code of Life : How Bioinformatics is Revolutionizing Science, Medicine and Business by Glyn Moody. Moody's book has chapters on the race to sequence the human genome and he interviewed many of the principal figures involved in that effort. Well, to make a long story short Venter made some useful contributions but the Celera Genomics sequencing effort was overhyped in contrast to what Celera actually accomplished. Read the book and form your own conclusions. I came away from reading it with a distrust of the accuracy of media accounts of high profile big science when skilled promoters are involved.

What made the human genome sequencing possible was advances in the sequencing technology. Granted, later generations of the sequencing machines were and still are developed by private companies. But the story is more complicated than that. The first machine was developed by Leroy Hood, then at Cal Tech. He used a mass spectrometer that JPL had developed for the Mariner mission to make the first automated sequencer and he did it with government money (I think NSF).

The private development of sequencing machine technology was made possible by government funding that gave the researchers the money to buy successive generations of the sequencing machines. The revenue from those machine sales funded each round of technological development to build better machines.

The Venter "whole genome shotgun" sequencing technique helped some. But it was hardly decisive and it is less useful for large genomes than for small genomes. Absent Venter's involvement the ABI sequencing machines still would have advanced thru succcessive generations. The human genome sequencing probably would have advanced at about the same rate.

froth said at April 29, 2004 6:23 PM:

Randall, your ideology is working you like a puppet. "The vast bulk of scientific knowledge is not patentable or otherwise usefully ownable" is a fatuous statement. How disappointing. You seem like a fast reader. Read some Hayek, some Coase, some Friedman, some Becker, some Buchanan. They've all won Nobel prizes. Go for it.

Business (the part of the economy that isn't the government) is largely about finding ways to usefully own things and ideas. Competition works. Government lacks it.

Randall Parker said at April 29, 2004 7:32 PM:

Froth, Ive read most of those economists you list. I have no ideology at this point. I outgrew my beliefs in Objectivism and Libertarianism and am now much more empirical.

There are many ideas that businesses can find no way to hide. It takes the power of government to enforce intellectual property rights. Intellectual property rights law has limits because of transaction costs and other problems. Intellectual property is also not respected in much of the world. Look at China today with its rip-offs of software, media products, and various other kinds of business intellectual property. Or look at India with its large scale ripping off of pharma intellectual property.

To deny the practical limits of systems of intellectual property and the existence of types of knowledge that are public goods is an ideological position obviously contradicted by huge amounts of empirical evidence.

Froth said at April 29, 2004 11:04 PM:

Your ideology shines through in your interpretations, then. I look at the empirical evidence from China, India and endless, tragic others and conclude that only an ideological stance in favor of systems that protect intellectual property raises people from poverty to wealth. Only India's move from socialism to systems that protect and encourage private property has finally allowed them to prosper. I also believe, with an ideology firmly grounded in empiricism, that the same will hold for China, et. al. The huge amounts of empirical evidence don't favor knee-jerk woe at any "cut to many categories of [government] spending."

Of course these systems have practical limits, and it is the work of liberal democracy to educate and build. Their very practicality makes over-reliance on impractical government the anti-empirical ideology. It's a lot of work, much more work than passing yet another law with unintended consequences opposite to their intent. Hayek and the other liberal (small "l") economists were/are not anarchists. Establishing property rights is often expensive, takes decades, is not foolproof, requires innovation and perseverance. And a vigilant eye on well-intentioned government. Looking at India and China empirically is no reason to "outgrow" libertarianism (by which I think you mean liberal democracy, since none of the named economists called/calls themselves "Libertarians"). Serfdom sucks.

Randall Parker said at April 29, 2004 11:38 PM:

Froth, The United States did quite well for itself ripping off intellectual property from Britain by not having a treaty respecting British patents for most (all?) of the 19th century. China is also doing well ripping off intellectual property from abroad and so is India. That is empirical evidence.

As for cutting categories of government spending: Whether there is a net harm or benefit depends on the categories. Cut prison spending by 90% and see what life is like the next day. Cut police spending and ditto.

There really are such things as public goods that can not be conceived by the market. Do you deny this? Are you an L. Neil Smith variety of "we can privatize everything" libertarian?

Also, where do you come down on the question of environmental regulation? For or against?

Froth said at April 30, 2004 1:16 AM:

The British had a patent for most of the 19th century? That doesn't seem right... Just kidding, but I'm not sure whether you're arguing for or against intellectual property rights. I'm for 'em, without nuance. I think any country that doesn't respect them is losing more than they're gaining. That's empirical evidence plus judgment. I think judgment is important and is inevitably based on some ideology or other. I'm sure you can name a hundred instances where somebody has prospered from theft, but I'll stand by my belief that a system which doesn't punish it is suboptimal in obvious ways.

I had to google up "L. Neil Smith," but don't have time to read one of his books. I don't think you should privatize an entity with a monopoly on violence, i.e. government itself. I do like the US Constitution's approach, which is very suspicious of concentrated government power, but still allows for a lot of it, including police, prison and military spending. I think government is often a necessary evil, but would prefer a market-based and competitive alternative where possible. Prisons have been privatized in many states for decades, by the way, often at substantial (but probably not 90%) savings.

Of course there are public goods. Architecture is an example of something generally "non-excludable and non-rival in consumption." There is probably less spent on it than would be if building owners could charge people for enjoying it. Doesn't mean government should be spending a ton of money on it. That would almost certainly cause more harm than good. I'm not sure why you think that's a slam dunk for you.

If you've read Ronald Coase, then you know the basis for free-market environmentalism, which concerns itself very much with establsihing property rights over externalities (e.g., trading rights to pollute, with government setting total allowable pollution, and with the option for either government or private parties to retire those rights and to diminish the total). The US has had surprisingly good results with it.Innovation has helped here tremendously, and I'll bet dollars to donuts that you've blogged about it. I also know that environmental polution has been steadily and inexorably improving in the richer developed countries for decades, and that most of the sound and fury in that area of debate comes from people looking for an excuse to grow government. But there are some still negative externalities there that we haven't solved. Sometimes government can do more good than harm. But sometimes, like with my noisy and obnoxious neighbor, I just put up with it and don't think calling the cops on him would help.

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