Presentation to the National Science Board
Symposium on International Models for R&D Budget Coordination and Priority Setting
November 18, 1999
Building on the work of my distinguished predecessor - Walter Massey - we wrote the first NSF Strategic Plan, at least in a long time, and that provided the basis for us to deal with the Government Performance and Results Act. Indeed, NSF became the model for strategic planning in research. And my distinguished successor, Rita Colwell, working with you is continuing the planning effort. I appreciate the opportunity - at the close of another crazy budget appropriations cycle and entering the final stages of preparing the FY 2001 budget - to reflect on the tools the US Government uses to set priorities for Federal investments in research and development. I want to acknowledge the presence of Elgie Holstein and to thank him for his hard work on behalf of S&T and NSF.
My remarks will be brief. However, I did prepare them with the
thought that at least some of the symposium participants would be unfamiliar
with our system, so my apologies if I say things you know. To be
completely candid, I'm not sure any of us truly understands how our system
works - but bear with me. I will touch on 5 main topics: 1)
the goals for federal investment in research and development; 2) the context
in which those investments are made; 3) the process the Executive branch
uses to establish R&D budget requests to Congress; 4) some of the problem
areas that have cropped up in recent years; and 5) some of the measures
we've adopted to address those problems.
In 1994, President Clinton and Vice President Gore established five goals for this country's stewardship of science in the national interest:
· Maintain leadership across the frontiers of scientific and technological knowledge. (e.g. LiGO)
· Enhance connections between research and national goals.
(e.g. USGCRP, plant genome project, IT)
· Stimulate partnerships that promote investments in science and technology and effective use of physical, human, and financial resources. (e.g. ERC's, S&T Centers)
· Produce the finest scientists and engineers for the 21st century.
(Excellence in university-based research and integration of research and education are essential to producing the future S&T workforce.)
· Raise scientific and technological literacy of all Americans.
(e.g. NSF's systemic reform in K-12 education. NSF plays a major role in the efforts of the Federal government to improve education.)
My NSF and Board colleagues will recognize these goals - you and your
predecessors helped to develop them and they have helped to shape strategic
planning in R&D across government. These goals - hammered together
in cooperation with representatives from all of the stakeholders in the
U.S. science and technology enterprise - guide all of the Administration's
The goals guide, but do not control, our investment decisions, which are made in the context of a funding system that many people - from around the world and right here at home - consider a little strange. I want to talk about three things that can confound the best-laid plans for national S&T priorities.
First, we have a distributed system of research and development in which agencies' missions are paramount to other considerations. Agencies set their R&D priorities - often with the help of advisory councils and broad consultation throughout the scientific community - by assessing the potential contributions of research to their mission needs, e.g. health, energy, defense, agriculture, commerce, transportation, space etc. Sometimes agency missions explicitly include advancement of science and technology; sometimes they don't. But in most cases, S&T goals are part of a delicate balancing act, rather than the primary focus of agency executives.
Second, we have committed ourselves to a balanced budget in a nation that remains intransigent in its distaste for taxes. Most Americans applaud the President's work on balancing the budget and other fiscal policies that helped produce the economic boom we are enjoying today and that promise future prosperity. Most economists agree that funding for R&D, particularly long-term research, should be counted as investment - investment with tremendous paybacks - and not viewed solely as an expense. But that is a very difficult argument to sell when overall government spending is declining and some of our citizens, or at least their elected representatives, are clamoring for tax cuts.
Last, but not least, we have Congress. Congress conducts an annual
appropriations cycle, which favors the short-term over the long-term for
the simple reason that their constituents want to see results - and soon.
The American public supports spending tax money on research. But,
when that research funding goes head-to- head with veterans, pre college
education, and many other people - focused programs, research funding has
a hard time. Moreover, committee jurisdictions make for
some strange pairings - where NSF and NASA vie for the same pot of money
as housing and veterans, and NIH competes with Labor and Education.
I truly believe there is bipartisan support for science and technology
in Congress, which we should strive to nurture, but their rules and customs
create a harsh environment for attention to the overarching needs of the
nation's S&T portfolio.
Process and Priority Setting
We have not allowed the difficulties of preparing and passing a prioritized federal science and technology budget dissuade us from trying. I have grouped the principal tools we use to set priorities –some historical and some introduced by this Administration - into three categories.
First, the Executive Office of the President issues guidance to help the agencies develop their budgets according the President's priorities. The Office of Management and Budget issues agency-specific guidance that covers S&T priorities to a greater or lesser degree, depending on the agency. OMB and my office also work together to prepare separate guidance on R&D priorities - currently we call this the "Lane-Lew" memo, and I will return to it in more detail in just a moment - that reiterates our national goals for S&T investment and identifies interagency areas of special emphasis.
Second, OMB holds hearings on agency budget submissions and on the interagency initiatives. These hearings, are followed by the passbacks to the agencies - directions on how they should modify their requests to better reflect Presidential priorities and budget realities. The passbacks provide a second chance for adjustments, up or down, to the overall S&T portfolio, although it is still effected agency-by-agency.
Finally, there is White House review of a budget proposal submitted by OMB to the President. My first opportunity to engage in that process occurred last year, and it is an eye-opening, somewhat mind-boggling experience. Agency-by-agency, initiative-by-initiative, the "big picture" emerges for Presidential approval. Many priorities compete for scarce dollars, but still the process provides an opportunity for top-down consideration of a national R&D portfolio.
I would like to review the R&D priorities guidance memo - the Lane-Lew memo - in a bit more detail now because it is a key part of the priority-setting process and it influences how competing budget requests are sorted out. It is prepared under the auspices of the National Science and Technology Council - a group chaired by the President that includes the Cabinet Secretaries and Agency heads of all departments and agencies that conduct R&D, and the cross cutting, multiagency initiatives highlighted in the guidance memo represent the work of program staff in all the agencies involved.
The Lane-Lew memo includes a reiteration of the national goals for all our S&T investments. For example, it explicitly calls out the agencies' responsibilities for stewardship of critical research fields. The memo also describes the Administration's expectations regarding the agencies' management of the R&D funds they receive, calling out the importance of peer review and, again, calling on the agencies to establish a desirable balance among fields of science. I will not try to cover these topics in detail but it is important to note that the general funding principles e.g. peer review, apply to all agencies that support R&D and to their entire R&D budgets, not just the activities they conduct on an interagency basis.
The cross cutting interagency activities that are called out in the memo are the real grass-roots effort of the NSTC to identify the top priorities for research that depends on the particular talents of many agencies to succeed. Through a "bottom up" consultative process run by the five NSTC committees and their subcommittees, we identify a select group of interagency R&D initiatives with great promise to advance the President's priorities and national goals. For FY 2000 we identified 10 priorities - which were well-funded in the President's request but this year have not fared so well in Congress - and for FY 2001 we identified about the same number of priorities.
Our system is imperfect, but there is a method to our madness. It will be interesting to see over the next day and half whether models from other countries can help improve our system - because, unquestionably, there is room for improvement.
I am concerned, for example, by the stagnation of civilian agency R&D budgets other than at NIH. NSF does pretty well, but not nearly what is needed. At least partly as a result of this trend, only biomedical sciences are keeping pace with GDP growth, and that threatens national prosperity as well as national leadership in S&T. Harold Varmus, distinguished outgoing Director of NIH is the first to point out how important the physical sciences, math and engineering are to biomed research and medicine. I am also concerned about the falloff in DOD basic research, which poses an immediate threat to engineering fields and a longer-term threat to our national security as well as our science base.
The Clinton Administration has taken steps to address these trends. We have, for example, established the 21st Century Research Fund - which strongly resembles the FS&T (Federal Science and Technology) budget proposed by the National Academy of Sciences and endorsed by the Board. It helps us track the research budget and much of the Development budget - that can be considered "advanced technology" through the appropriations process, where the President's priorities sometimes get waylaid by Congressional priorities.
We have also developed some broad-based interagency initiatives that can help develop or maintain strength in many fields of science. Nanotechnology, for instance, requires R&D in physics, chemistry, materials, molecular biology and several fieldss of engineering.
The United States does not have a Ministry of Science and Technology or a Department of Science and Technology. Nor are we likely to have one in the foreseeable future. We have, instead, a federal S&T enterprise, a distributed system, where S&T is integrated into the agendas of the mission agencies. That has its advantages (couples S&T with larger needs) and obvious disadvantages. But it has served us well.
Whatever system we have for S&T, we still have to set priorities
and coordinate R&D activities. And we are eager to find ways
to improve that process.
Thank you for inviting this overview this evening. I look forward to the results of your coming discussions.
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