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Regulations Regarding Federal Appropriations

Each year, Congress appropriates money to support research and development (R&D), science and technology (S&T), education, and service programs, all of which impact those of us in higher education. With few exceptions, the funds accessible by institutions of higher education come from what are termed "discretionary" funds. These funds are discretionary in that it is decided how to spend them on a yearly basis and hence, where this money goes is deliberated by the appropriations committees and subcommittees of the House and Senate. In contrast, are the "entitlements," budget commitments that support fundamental infrastructure for government and/or the general public that must be paid each year as dictated by law, such as Medicare and social security.

In the legislative process, all federal agencies receive "authorization", the formal authority to spend the money that will be appropriated in particular areas, and "appropriations", the actual money to support basic infrastructure, as well as internal and external programs. Grant and contract funding comes ultimately from these appropriations, regardless of the mechanism of competition that is used to obtain it. In other words, the appropriations process is the stream head of all federal money that flows to higher education for R&D, be it through the peer review process for the NSF or NIH grant, contracts with industry, or the "earmark," a direct appropriation that may fund, as an example, the development of a major new facility.

The Mechanism
R&D comprises about one fifth of the total discretionary budget, which is usually about one third of the total budget. The appropriation of federal discretionary funds occurs through 13 appropriations bills. Of these, 10 are responsible for funding the 13 agencies that are engaged in R&D support, although the proportion of the budget that goes to R&D across these bills (and recipient agencies) is variable. In some cases, that allocation to R&D is quite small, as shown below:

Appropriations Bill Proportion (%) to R&D*
Defense 17.8
Veterans Affairs, Housing and Urban Development, Independent Agencies 18.4
Labor, Health & Human Services, Education 20.8
Energy & Water 30.9
Interior 8.7
Agriculture 12.2
Commerce, Justice, Dept. of State 3.0
Transportation, Treasury 3.1
Foreign Operations 1.2
Homeland Security 4.3

*Figures from AAAS R&D group.

Some of these bills contain the appropriations for multiple agencies that are important to higher education. For example, Veterans Affairs, HUD and Independent Agencies includes a wide range of functional categories including VA medical research, the National Science Foundation, and NASA. NIH and the Department of Education are both in the Labor, HHS and Education bill. Furthermore, some functional R&D categories have representation and appropriations from several agencies and bills. The best recent example of this is homeland security, in which funds may come through the Department of Homeland Security, the NIH, the NSF, NASA, EPA, Defense or Agriculture. Other crosscutting initiatives include nanotechnology, information technology, and climate change science in which 10, 7, and 12 agencies, respectively, hold some budgetary authority.

The Process
The budget process begins each year when, in early February, the President proposes a budget to Congress through the Office of Management and Budget. The proposed budget goes to various committees (budget and other), but most importantly, to the Appropriations Committees of the House and Senate. Each house conducts hearings as well as allocating work to appropriations subcommittees for each of the 13 bills. The subcommittees draft and report the appropriations bills, the House committees preceding those of the Senate (usually May). In parallel, the budget resolution makes its way through the budget committee and ultimately will set revenue and spending targets and may require reconciliation. Authorization bill reporting is also occurring during the same time frame but must generally precede appropriation. The House and Senate confer on each bill and once agreement is reached, each appropriation bill goes to the President for signature. The entire process must be accomplished prior to the beginning of the new fiscal year unless a continuing resolution is enacted. On occasion, when it is clear that there isn't time to proceed with the bills separately, Congress will pass an "omnibus" bill for appropriations in which all of the bills are combined into a single package (e.g. as was done in 2003 for FY 2004 appropriations). Operation under a continuing resolution often complicates the R&D funding agency's decision process and can sometimes mean that awards are delayed and made outside of their normal cycles.

Earmarks and Higher Education
A heated debate continues to rage in Washington as well as on academic campuses as to whether universities should seek (and Congress should enact) direct appropriations to support programs and infrastructure in science and technology at universities. Some institutions have come out formally and strongly against the concept, but many feel that there are valid justifications for seeking funds in this manner. The reality is earmarks to universities are increasing every year. A senior visiting scientist to the AAAS recently reported that in 2003, $2 billion went to 716 universities as earmarks.

From year to year, the "pots" into which appropriations flow fluctuate somewhat based on the economic, political, and cultural milieu of the nation. For the last several years, appropriations for R&D have been largely driven by the war on terrorism (and the far reaching security issues associated with it), the war in Iraq, the information technology, communications and computational sciences explosion, and several cross cutting S&T initiatives such as nanotechnology and global climate change. In addition, longer term goals of the administration, such as the decision by the Clinton administration to double the budget of the National Institutes of Health over a five year period, also drive aspects of the appropriations process. A similar proposal, to double the budget of the National Science Foundation, recently met with failure. Broad-reaching impacts can be felt by researchers when appropriations converge into smaller and more homogeneous target areas.

Since the November 2010 election, the Senate Republican caucus passed a resolution to reduce FY 2012 non-security discretionary spending levels to inflation-adjusted FY 2008 levels along with an earmark ban for the next Congress. The full Senate voted against 39-56) enacting the earmark ban.

Although federal budget tracking may not seem like a thrilling venture for a faculty member, few of us can afford not to be watching and incorporating national trends into our strategies for growing R&D activities. One of the most reliable and exhaustive tracking systems of the federal budget for R&D is provided by the American Association for the Advancement of Science (AAAS) within the Science and Policy Programs R&D budget group. A regular visit to their site between early March and May can be most informative about the next year's outlook, and is highly recommended.