2006 R&D Budget: Bush's Predictable Priorities
Mar 02 '05 (Updated Mar 05 '05)
The Bottom Line Flat R&D spending undermines our economic and technological leadership
Anticipated by science administrators and many practicing scientists throughout the country, the R&D proposed budget for 2006 was just released by the Bush administration. The winners and losers are as predicted.
Whereas US R&D spending has increased by a healthy 6% a year between 1994 and 2002, now it is time for belt tightening. Traditionally, industry has been contributing over 60% of the total spending (over $300 Bill), which is about as much as that of the other G-7 nations combined. Recently, industry has been suffering a serious downturn, and R&D spending has not kept up with that of previous years. Bush is honoring his promise to trim the Federal R&D budget, and has proposed another year of flat spending, at $132 Bill. The biggest chunk of this money will go, of course, to Defense R&D ($71 Bill, representing a 1% increase). Of this, >90% is for weapon testing and evaluation, i.e. activities whose benefits will not extend to the economy at large.
The National Institute of Health (NIH) will receive a paltry 0.5% increase. With $28.7 Bill, this agency's budget still represents a formidable commitment to health care and related areas. Of course, funds are targeted, and newly funded projects include biodefense and chemical defense. As predicted, fighting potential terrorism will now be a lucrative field for chemists and biologists.
The National Science Foundation (NSF), the agency responsible for funding much of basic science, will receive a 2.4% increase, barely enough to compensate for the disastrous cut in 2005. The pledge to double this agency's tiny $5.6 Bill budget in 5 years will not hold, given the need to deal with our budget deficit.
The Department of Energy will get a substantial cut (3.8%). Coal-related initiatives now receive $300 Mill, whereas renewable energy R&D will get a proportionally pathetic $350 Mill, highlighting the administration's lack of interest in leading the nation toward the future. Among the budget items which are worst hit are Environmental Cleanup R&D, slashed by 64%. No comments are needed here.
Homeland Security activities will be boosted by 8%, to be divided among a variety of agencies.
Agricultural Research (USDA) will be severely cut also (by 13%), whereas the EPA will receive a small increase. Finally, our spending in economic development, which is represented by NIST, with a pathetic $400 Mill budget, will increase substantially, by 12.6%, perhaps in response to the country's diminishing economic competitiveness.
In spite of our traditional reliance on our private sector for innovation, our government has spent vast sums in R&D over the last 50 years. The combined Federal and industrial spending places the US by far at the number one position in the world. Most economists believe that our R&D spending is directly responsible for our economic supremacy and for our growing GDP, also by far the largest in the world. Clearly, our budget deficit spells flat spending for all but a few lucky R&D agencies and the weapon developers. The 2006 shortchanges several research areas which desperately need a boost if the US is to maintain a position of leadership in science and technology.
It is instructive to compare our spending with that of other Western countries. This comparison highlights a dramatic difference: whereas the US spends more than half of his Federal R&D funds in weapons, two of our major competitors, Germany and Japan, spend less than 5% in this area. On the other hand, Japan and Germany spend >50% of their federal R&D budget in "knowledge creation", i.e. less targeted general funding of universities. This dwarfs our 6% spending in this area, mainly through the NSF.
The US spends more in health (NIH), 24% of the budget vs. 5% for both Japan and Germany. Most countries spend large amounts of their budget in economic development initiatives (35% and 20% for Japan and Germany, respectively), whereas the US does not (only 1%).
Clearly, due to our massive military spending, which now almost matches the spending of ALL the other nations in the world combined, other areas are being relatively neglected. And, although our R&D spending vs. GDP ratios is very high, according to Rand Research (www.rand.org), currently Sweden(4.3) Finland (3.2), Japan (3.1) and Switzerland (2.73) spend a higher percentage of their GDP in R&D than the US (2.65). If we subtract Defense spending, which does not make us economically more competitive, a few other countries, including Germany, also surpass the US. The EU spends an average of 1.93% of its GDP in R&D. Brussel has committed to reaching 3% in 5 years. China, which now spends 1.5%, is dramatically up from the 0.6% of ten years ago.
Another worrisome fact, which is well known to all scientists but which may perhaps surprise lay people, is that almost half of the Ph.D. scientists employed in the US are foreigners, most of whom have received their Ph.D. here or have come for postdoctoral studies. Clearly, the US is unable to educate its scientific elite in the appropriate measure, whereas other countries overproduce qualified scientists.
There is perhaps nothing wrong with this. After all, we import oil and export wheat. It is a global economy, so we can import scientists as well. But, in the last two years, the applications for Ph.D. studies in the US from abroad have dropped by 30%. Challenging (and self-destructive) immigration policies, coupled with the growth of opportunities in Europe and especially in Asia (where the bulk of our chemists, biologists and engineers come from) is causing a difficult situation for American companies, only partially alleviated by the recession and the massive layoffs, which keep the pool of qualified scientists rather constant.
It is easy to predict that, when the next upswing comes, companies will have a lot of trouble filling their technical slots with high-quality scientists. Can we afford the luxury not to invest in education and simply buy chemists in China? What will happen when they are no longer willing to come, or to stay after graduation? At the personal level, I have seen several of my US academic colleagues (among the best, of course), migrate to Europe lately (two to Switzerland, three to Germany). Their main issue is the difficult situation in the US, where NIH and NSF can afford to fund an average of only 20% of proposals rated "fundable". Others are fending off wonderful offers. Many of my most brilliant Chinese colleagues are headed back home in droves, lured by the chances of making it big in the booming Chinese chemical industry.
In conclusion, there are many trends that can give rise to great concern: the ability of the US to compete in world markets may be eroding. Whereas other governments are increasing their non-defense spending, ours is flat and destined to remain flat for the near future, both at the Federal and private level. We still have the best technical universities in the world, but we will be increasingly training the next generation of scientific leaders for Europe and especially for China and India. The administration's unwillingness to invest in renewable resources or basic research, but rather continue to focus on new weapons, could cripple, in the long run, our economic competitiveness. Currently each US citizen spends $1,400 of his money each year in buying weapons for his/her government, which is more than TEN times that of any citizen of any other country in the world. Unfortunately, this money is spent more to bully, kill and maim the civilians of other countries than to make us safe.
The conclusion is inescapable: if we don't tame the Pentagon, if we don't learn to take care of our security in a more efficient, intelligent, diplomatic manner, we will not have the resources to compete economically with an increasingly sophisticated world. If we do not place some capable leaders in the White House, our downfall will occur sooner than we think. Of course, having all the weapons, we can still go and take the resources from the legitimate owners.
I sincerely hope this is not our long-term strategic goal!
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