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18 RESEARCH AND DEVELOPMENT Innovation in science and technology has been a cornerstone of America’s economic progress since the founding of this nation The most recent estimate of total U S research and development R D spending was about $495 billion an amount greater than any other country and more than a quarter of the global total 1 While the private sector funds and performs the majority of U S R D the Federal government has an important role in funding R D in areas that industry does not have a strong incentive to invest in and in areas of critical importance to national and economic security The Federal government has been the leading source of support for basic research and provides more than 25 times the amount funded by state and local governments in total R D 2 Prior Federally funded R D has greatly advanced human knowledge and applications of that knowledge permeate our lives—from the phones we carry to the cars we drive to the medicines that return us to health Recognizing the critical importance of fostering innovation to promote America’s interests including competitiveness economic and job growth and national security the 2019 Budget continues support of investments in basic research early-stage applied research and technology transfer efforts that will lead to the breakthroughs of the future The President’s 2019 Budget provides $118 1 billion for Federal R D including the conduct of R D and investments in R D facilities and equipment see Table 18-2 This figure applies a change to the R D definitions introduced in July 2016 per OMB Circular A-11 Under the former R D definitions the President’s 2019 Budget provides $156 8 billion for R D a $2 8 billion or 2% increase over the FY 20183 level and includes an $18 1 billion increase for Defense-related R D Detailed R D definitions and a discussion of the definition change are available in Section II Table 18-1 shows a breakout of FY 2019 R D funding by major funding agencies at the bureau or account level 1 National Science Board 2018 Science and Engineering Indicators January 2018 2 NSF National Center for Science and Engineering Statistics Dec 2017 InfoBrief - NSF 18-306 3 Because an appropriation for FY 2018 was not passed by the time this chapter went to print the chapter calculates FY 2018 estimates using an annualized version of the FY 2018 Continuing Resolution Table 18–1 TOTAL FEDERAL R D FUNDING BY AGENCY AT THE BUREAU OR ACCOUNT LEVEL Mandatory and discretionary budget authority 1 2 dollar amounts in millions 2018 Annualized 2017 Actual CR By Agency Agriculture �� Agriculture Research Service �� Animal and Plant Health Inspection Service �� Economic Research Service �� Forest Service �� National Agricultural Statistics Service �� National Institute of Food and Agriculture �� Commerce �� Bureau of the Census �� National Institute of Standards and Technology �� National Oceanic and Atmospheric Administration �� National Telecommunications and Information Administration �� Defense 3 �� Military Construction �� Military Personnel �� Defense Health Program �� Research Development Test and Evaluation �� Education �� Institute of Education Sciences �� Office of Postsecondary Education �� Office of Special Education and Rehabilitative Services �� Office of Career Technical and Adult Education �� 2 585 1 298 40 87 282 9 869 1 794 232 750 804 8 49 197 155 410 1 452 47 180 254 226 3 23 2 2 487 1 289 39 86 281 9 783 1 833 237 746 839 11 43 616 37 439 336 42 804 243 219 0 24 0 2019 Proposed 1 914 855 34 45 235 9 736 1 361 165 564 619 13 57 156 53 455 362 56 286 240 216 0 24 0 Dollar Change Percent Change 2018 to 2019 2018 to 2019 –573 –434 –5 –41 –46 0 –47 –472 –72 –182 –220 2 13 540 16 16 26 13 482 –3 –3 0 0 0 –23% –34% –13% –48% –16% 0% –6% –26% –30% –24% –26% 18% 31% 43% 4% 8% 31% –1% –1% 0% 0% 0% 233 234 ANALYTICAL PERSPECTIVES Table 18–1 TOTAL FEDERAL R D FUNDING BY AGENCY AT THE BUREAU OR ACCOUNT LEVEL—Continued Mandatory and discretionary budget authority 1 2 dollar amounts in millions 2018 Annualized 2017 Actual CR Energy �� Fossil Energy Research and Development �� Science �� Electricity Delivery �� Nuclear Energy �� Energy Efficiency and Renewable Energy �� Advanced Research Projects Agency--Energy �� Cybersecurity Energy Security and Emergency Response �� Defense Environmental Cleanup �� National Nuclear Security Administration �� Power Marketing Administration �� Environmental Protection Agency �� Science and Technology �� Hazardous Substance Superfund �� Inland Oil Spill Programs �� Health and Human Services �� Administration for Children and Families �� Centers for Disease Control and Prevention �� Centers for Medicare and Medicaid Services �� Departmental Management �� Food and Drug Administration �� Health Resources and Services Administration �� National Institutes of Health 4 �� Homeland Security �� National Protection and Programs Directorate �� Science and Technology �� Transportation Security Administration �� United States Coast Guard �� United States Secret Service �� Management Directorate �� Countering Weapons of Mass Destruction Office �� Interior �� Bureau of Indian Affairs and Bureau of Indian Education �� Bureau of Land Management �� Bureau of Reclamation �� Bureau of Safety and Environmental Enforcement �� Department-Wide Programs �� National Park Service �� Office of Surface Mining Reclamation and Enforcement �� United States Fish and Wildlife Service �� United States Geological Survey �� Bureau of Ocean Energy Management �� National Aeronautics and Space Administration �� Science �� Aeronautics �� Low Earth Orbit and Spaceflight Operations �� Safety Security and Mission Services �� Deep Space Exploration Systems �� Construction and Environmental Compliance and Restoration �� Exploration Research and Technology �� National Science Foundation �� Research and Related Activities �� Education and Human Resources �� Major Research Equipment and Facilities Construction �� Patient-Centered Outcomes Research Trust Fund �� 14 896 399 5 438 144 764 1 445 306 0 28 6 357 15 497 481 15 1 34 222 16 511 278 116 390 30 32 881 724 6 597 5 38 3 3 72 953 5 23 72 27 6 27 1 32 687 73 10 704 5 668 517 2 542 269 976 52 680 5 938 5 314 409 215 463 15 006 419 5 307 144 955 1 492 295 0 28 6 351 15 496 480 15 1 33 772 5 464 19 131 410 30 32 713 672 6 527 5 38 2 3 91 964 5 23 104 27 3 26 1 15 683 77 10 243 5 666 508 2 166 262 937 22 682 6 030 5 412 410 208 501 2019 Proposed 12 685 292 4 127 46 754 524 0 40 28 6 859 15 269 256 12 1 24 742 89 296 17 158 410 22 23 750 548 48 371 21 21 3 3 81 759 5 23 83 21 0 24 1 15 503 84 10 651 5 820 488 1 727 257 1 392 54 913 4 177 3 821 290 66 622 Dollar Change Percent Change 2018 to 2019 2018 to 2019 –2 321 –127 –1 180 –98 –201 –968 –295 40 0 508 0 –227 –224 –3 0 –9 030 84 –168 –2 27 0 –8 –8 963 –124 42 –156 16 –17 1 0 –10 –205 0 0 –21 –6 –3 –2 0 0 –180 7 408 154 –20 –439 –5 455 32 231 –1 853 –1 591 –120 –142 121 –15% –30% –22% –68% –21% –65% –100% n a 0% 8% 0% –46% –47% –20% 0% –27% 1680% –36% –11% 21% 0% –27% –27% –18% 700% –30% 320% –45% 50% 0% –11% –21% 0% 0% –20% –22% –100% –8% 0% 0% –26% 9% 4% 3% –4% –20% –2% 49% 145% 34% –31% –29% –29% –68% 24% 235 18 Research and Development Table 18–1 TOTAL FEDERAL R D FUNDING BY AGENCY AT THE BUREAU OR ACCOUNT LEVEL—Continued Mandatory and discretionary budget authority 1 2 dollar amounts in millions 2018 Annualized 2017 Actual CR 2019 Proposed Dollar Change Percent Change 2018 to 2019 2018 to 2019 Transportation �� 904 929 826 –103 –11% Federal Aviation Administration �� 433 439 351 –88 –20% Federal Highway Administration �� 317 311 334 23 7% Federal Motor Carrier Safety Administration �� 11 9 9 0 0% Federal Railroad Administration �� 43 43 24 –19 –44% Federal Transit Administration �� 0 28 22 –6 –21% Maritime Administration �� 0 1 0 –1 –100% National Highway Traffic Safety Administration �� 63 60 62 2 3% Office of the Secretary �� 17 17 13 –4 –24% Pipeline and Hazardous Materials Safety Administration �� 20 21 11 –10 –48% 12% Smithsonian Institution �� 251 242 271 29 Veterans Affairs �� 1 346 1 338 1 345 7 1% Medical Services �� 673 669 618 –51 –8% Medical and Prosthetic Research �� 673 669 727 58 9% This table shows funding levels for Departments or Independent agencies with more than $200 million in R D activities in 2019 2 The Experimental Development definition is used in this table across all three fiscal years 3 Unlike previous years totals for Experimental Development spending in FY 2017-2019 do not include the DOD Budget Activity 07 Operational System Development due to changes in the definition of development These funds are requested in the FY 2019 Budget request and support the development efforts to upgrade systems that have been fielded or have received approval for full rate production and anticipate production funding in the current or subsequent fiscal year 4 The FY 2019 Budget proposes to consolidate the activities of the Agency for Healthcare Research and Quality AHRQ within NIH The NIH total includes R D funding that previously occurred in AHRQ 1 I PRIORITIES FOR FEDERAL RESEARCH AND DEVELOPMENT The President’s Budget provides support for Federal R D to enhance our national security increase American economic prosperity create well-paying American jobs and improve the national science and technology enterprise This section highlights key areas of R D funding in the 2019 Budget Protecting the Homeland against Physical and Cyber Attacks Worldwide advances in technology mean that the threats to our national security are changing Nations best able to employ precision-guided weapons track enemy movements in real-time disrupt communications and work seamlessly in the fight will prevail The President’s National Security Strategy affirms the importance of peace through strength reiterating that U S military strength remains a vital component of our nation’s security and renewing calls for American military overmatch Historically Federal R D investments in military technology have led to the development of breakthrough technologies with tremendously useful civil applications and the President’s 2019 Budget encourages programs with dual-use potential to be leveraged for Federal nonmilitary advancements The Department of Defense DOD will invest more than $84 billion in research engineering and prototyping activities in 2019 to maintain technical superiority and promote U S national security innovation For example DOD is the centerpiece of a government-wide effort to outinnovate competitors and bolster the U S engineering and design communities in the area of trusted microelectronics semiconductors and future computing Electronics such as computer chips and their integrated circuits are in everything from cell phones to jet aircraft The Defense Advanced Research Projects Agency DARPA announced its Electronics Resurgence Initiative investing more than $150 million per year —not including matching funds from industry – toward chip innovation In addition DOD is investing in hypersonics research for non-nuclear weapons which can deter our potential adversaries and are able to strike any point on the globe within an hour DOD will also support intelligence surveillance and reconnaissance along with kinetic and non-kinetic technologies that will disrupt and defeat missiles prior to launch The 2019 Budget provides $6 8 billion for R D efforts at the Missile Defense Agency to develop missile defeat detection and defense capabilities to protect the United States our deployed forces allies and partners from missile attacks Beyond DOD the 2019 Budget also supports a number of critical investments to protect the homeland at the Department of Homeland Security DHS and the Department of Health and Human Services HHS In particular at DHS the President’s Budget requests $80 4 million in R D funding to detect radiological and nuclear threats in order to defend against weapons of mass de- 236 struction $25 million for biodefense-related R D $71 1 million in R D to improve border surveillance and law enforcement capabilities to detect and interdict illegal activity including the smuggling of contraband and $70 6 million for cybersecurity R D In alignment with the President’s National Security Strategy call to bolster transportation security the 2019 Budget will also invest $20 6 million in R D at the Transportation Security Administration to counter emerging threats to our aviation surface and intermodal transportation systems At HHS the Budget also provides $1 billion to develop enhanced medical countermeasures to respond to potential public health emergencies Improving Preparedness for and Response to Natural Disasters In the wake of natural disasters including a devastating hurricane season and catastrophic forest fires it is more important than ever to invest in the tools necessary to predict protect against mitigate respond to and recover from natural disasters The Budget supports investments in high-priority Earth observations that contribute to the nation’s ability to predict the weather and respond to natural disasters Within the National Aeronautics and Space Administration NASA the Budget provides $1 8 billion to maintain progress toward satellite missions and research that will improve our understanding of the Earth including natural hazards The joint NASA-Indian Space Research Organization Synthetic Aperture Radar NISAR mission will provide unprecedented detailed views of Earth and will enhance our understanding and response to hazards such as earthquakes tsunamis and landslides The Budget also supports National Oceanic and Atmospheric Administration NOAA research on seasonal to subseasonal atmospheric behavior to improve our ability to understand predict and communicate information associated with hazardous weather The Budget also funds the U S Geological Survey to conduct research to quantify earthquake likelihoods and to develop a nationwide capability to release aftershock advisories during major earthquake sequences The Budget also continues to support space weather-related R D since space weather can affect not just the nation’s satellites and space explorers but can potentially cause significant damage to our electrical grid and electronic systems ANALYTICAL PERSPECTIVES missions on the surface of the Moon in the next few years paving the way for a return of our astronauts—this time not just to visit but to lay the foundation for further journeys of exploration and the expansion of our economy into space The Budget supports a space exploration program that we can be proud of—one that reflects American ingenuity ambition and leadership One key to an affordable and dynamic exploration program is the development of new technologies and the Budget spends over $750 million on exploration technology The Budget also provides $150 million for a program to expand commercial activities in low Earth orbit with a focus on developing and deploying commercial space stations that can be used by NASA and other customers as a successor to the International Space Station Harnessing Artificial Intelligence and High Performance Computing Expanding Human Exploration and Commercialization of Space The development of artificial intelligence AI is advancing at a rapid pace and the 2019 Budget invests in fundamental AI research and computing infrastructure to maintain U S leadership in this field AI holds the potential to transform the lives of Americans through improved technology integration in the workplace and enhanced standards of living at home The Budget funds basic research related to AI at the National Science Foundation and applied R D in the Department of Transportation for the further development of autonomous and unmanned systems In defense applications DOD is working to deliver AI-driven algorithms to warfighting systems which can rapidly turn volumes of data into decision-quality insights And in the health realm NIH is supporting the use of high performance computing to analyze large data sets to drive cancer research forward The Budget also funds high performance computing through supporting investments in computing infrastructure which hold the potential for AI technology use and other purposes The Budget provides $811 million to the Department of Energy’s Advanced Scientific Computing Research Program to support research and facility upgrades to supercomputing infrastructure at Argonne and Oak Ridge National Laboratories including the development of exascale high performance computers These supercomputers will rank among the fastest and most powerful in the world and will leverage strong partnerships with industry and academia in their development and use The Budget supports more innovative and sustainable approaches for exploration with commercial and international partners to enable the return of humans to the Moon for long-term exploration and utilization followed by human missions to Mars and other destinations As it pioneers the space frontier NASA will support growth of the nation’s space economy increase understanding of the universe and our place in it and advance America’s aerospace technology This Budget continues investments to once again launch Americans into space from American soil Additionally it initiates new industry partnerships for landing robotic The Administration is committed to combating drug abuse and the opioid overdose epidemic which poses an urgent threat to public safety and public health The Administration’s declaration of a nationwide public health emergency on October 26 2017 highlighted the need for improved R D to prevent and treat drug addiction The President’s Commission on Combating Drug Addiction and the Opioid Crisis provided recommendations for related research to the President In addition the White House Office of Science and Technology Policy is convening an Combating Drug Abuse and the Opioid Overdose Epidemic 237 18 Research and Development interagency body to facilitate efforts across agencies on health science and technology in response to the opioid crisis and to develop an R D roadmap designed to enhance the national opioid response The 2019 Budget supports a number of important R D efforts at agencies to understand and fight this critical problem For instance the Budget invests in research into the biological and social-behavioral basis of drug addiction to improve the fundamental understanding of opioid addiction and in the development of technologies to measure brain function which can potentially improve our understanding of addictive behavior brain systems and related phenomena In addition NIH has launched an initiative in partnership with innovator companies and the Food and Drug Administration FDA to address the urgent need for non-addictive alternatives to opioids for pain relief With the 2019 Budget’s investment of $100 million this public-private partnership will facilitate the development of new treatments for addiction overdose-reversal and non-addictive therapies for pain Furthermore the 2019 Budget supports R D at DHS to develop cost-effective detection systems to rapidly collect information useful for detecting opioids and fentanyls at land borders and international mail handling facilities enhancing efforts to prevent illicit drugs from entering the country the integration of UAS into the national aerospace system The Budget also proposes accelerating the start of advanced autonomous systems research to ensure the safe integration of autonomous vehicle systems such as advanced UAS and passenger-carrying urban air mobility aircraft into the national airspace The Budget provides $10 million to the National Highway Transportation Safety Administration’s Automated Driving Systems program for critical research that will assist the agency in the development of an advanced regulatory approach for a new generation of transportation technologies The Budget also provides $100 million to the Federal Highway Administration’s Intelligent Transportation Systems program to support R D on connected and autonomous vehicles and related technologies Leveraging Biotechnologies for Agriculture and Rural Prosperity Encouraging biomedical innovation is key to preventing treating and defeating disease and maintaining America’s global leadership in healthcare Achieving these goals requires effective and efficient transfer of research results from bench to bedside To ensure that the work of the National Institutes of Health NIH continues to drive biomedical innovation that improves health the 2019 Budget supports the expansion of policies that promote technology transfer including policies that encourage investigators to seek intellectual property protection for their inventions The Budget also supports the highest priority research at NIH to continue to make progress on finding cures for major diseases and illnesses The report from the President’s Interagency Task Force on Agriculture and Rural Prosperity called for an increased focus on leveraging agricultural biotechnology to further improve agricultural efficiency and the quality of food products Therefore the Budget prioritizes the U S Department of Agriculture USDA research portfolio by providing formula funding at the FY 2017 Enacted level for research and extension activities at land-grant universities and competitive research through the Department’s flagship competitive research grant program the Agriculture and Food Research Initiative The Budget also proposes over $800 million for in-house basic and applied research conducted by the Agriculture Research Service The Budget also proposes to transfer operational responsibility of the National Bio-and Agro-Defense Facility NBAF from the Department of Homeland Security to USDA NBAF is a laboratory facility designed to study diseases that threaten the animal agricultural industry and public health and given that USDA is already responsible for the research programs that will be conducted at this facility once construction is completed it makes sense for USDA to manage the facility itself Integrating Autonomous and Unmanned Systems into the Transportation Network Unleashing an Era of Energy Dominance through Strategic Support for Innovation Autonomous and unmanned systems such as drones and self-driving cars can provide novel low-cost capabilities across a broad range of commercial sectors including transportation In order to leverage these benefits research is needed on how these systems and technologies can be safely integrated into the existing transportation network The 2019 Budget provides $17 3 million to the Federal Aviation Administration for R D related to the integration of unmanned aircraft systems UAS into the national airspace system The Budget will also provide $57 million to NASA for research on further development of the UAS traffic management system and UAS operating standards This funding will allow NASA to complete its current UAS-related projects which will contribute to The United States has among the most abundant and diverse energy resources in the world including oil gas coal nuclear and renewables The ability of our entrepreneurs and businesses to commercialize technologies that take full advantage of those resources is paramount to promoting U S economic growth security and competitiveness That is why the Budget invests approximately $1 7 billion across the applied energy offices at the Department of Energy DOE for early-stage research and development that will enable the private sector to deploy the next generation of technologies and energy services that usher in a more secure resilient and integrated energy system Through balanced support across generation types and fuel sources the Budget helps usher in a new era of US energy dominance Stimulating Biomedical Innovation for American Health 238 ANALYTICAL PERSPECTIVES II FEDERAL R D DATA R D is the collection of efforts directed toward gaining greater knowledge or understanding and applying knowledge toward the production of useful materials devices and methods R D investments can be characterized as basic research applied research development R D equipment or R D facilities The Office of Management and Budget OMB has used those or similar categories in its collection of R D data since 1949 Starting with the FY 2018 Budget OMB implemented a refinement to the categories by more narrowly defining “development” as “experimental development” to better align with the data collected by the National Science Foundation on its multiple R D surveys and to be consistent with international standards An explanation of this change is included below Please note that R D cross-cuts in specific topical areas as mandated by law will be reported separately in forthcoming Supplements to the President’s 2019 Budget Background on Federal R D Funding More than 20 Federal agencies fund R D in the United States The character of the R D that these agencies fund depends on the mission of each agency and on the role of R D in accomplishing it Table 18-2 shows agencyby-agency spending on basic research applied research experimental development and R D equipment and facilities Basic research is systematic study directed toward a fuller knowledge or understanding of the fundamental aspects of phenomena and of observable facts without specific applications towards processes or products in mind Basic research however may include activities with broad applications in mind Applied research is systematic study to gain knowledge or understanding necessary to determine the means by which a recognized and specific need may be met Experimental development is creative and systematic work drawing on knowledge gained from research and practical experience which is directed at producing new products or processes or improving existing products or processes Like research experimental development will result in gaining additional knowledge Research and development equipment includes acquisition or design and production of movable equipment such as spectrometers research satellites detectors and other instruments At a minimum this category includes programs devoted to the purchase or construction of R D equipment Research and development facilities include the acquisition design and construction of or major repairs or alterations to all physical facilities for use in R D activities Facilities include land buildings and fixed capital equipment regardless of whether the facilities are to be used by the Government or by a private organization and regardless of where title to the property may rest This category includes such fixed facilities as reactors wind tunnels and particle accelerators Comprehensive government-wide efforts are currently underway to increase the accuracy and consistency of the R D budget via a collaborative community of practice of Federal agencies which have been working to identify best practices and standards for the most accurate classification and reporting of R D activities For example to better align with National Science Foundation R D surveys and international standards starting with the FY 2018 Budget OMB has narrowed the definition of development to “experimental development ” This definition unlike the previous definition of development excludes user demonstrations of a system for a specific use case and pre-production development i e non-experimental work on a product or system before it goes into full production Because of this recent change the experimental development amounts reported are significantly lower than the development amounts shown in past Budgets In particular the change in definition of experimental development reduces R D spending compared to what it would have been under the previous definition by approximately $38 7 billion in FY 2019 III OTHER SOURCES OF FEDERAL SUPPORT FOR R D The President’s 2019 Budget seeks to build on strong private sector R D investment by prioritizing Federal resources on areas that industry is not likely to support over later-stage applied research and development Table 18–2 FEDERAL RESEARCH AND DEVELOPMENT SPENDING Mandatory and discretionary budget authority 1 dollar amounts in millions 2017 Actual By Agency Defense 3 �� Health and Human Services �� Energy �� NASA �� National Science Foundation �� Agriculture �� Veterans Affairs �� Commerce �� 49 197 34 222 14 896 10 704 5 938 2 585 1 346 1 794 2018 Annualized CR 43 616 33 772 15 006 10 243 6 030 2 487 1 338 1 833 2019 Proposed 57 156 24 742 12 685 10 651 4 177 1 914 1 345 1 361 Dollar Change 2018 to 2019 13 540 –9 030 –2 321 408 –1 853 –573 7 –472 Percent Change 2018 to 2019 31% –27% –15% 4% –31% –23% 1% –26% 239 18 Research and Development Table 18–2 FEDERAL RESEARCH AND DEVELOPMENT SPENDING—Continued Mandatory and discretionary budget authority 1 dollar amounts in millions 2017 Actual 2018 Annualized CR 2019 Proposed Dollar Change 2018 to 2019 Percent Change 2018 to 2019 Transportation �� Interior �� Patient-Centered Outcomes Research Trust Fund �� Homeland Security �� Smithsonian Institution �� Environmental Protection Agency �� Education �� Other �� TOTAL 2 �� Total using the former definition of Development �� 904 953 463 724 251 497 254 561 125 289 154 983 929 964 501 672 242 496 243 629 119 001 153 932 826 759 622 548 271 269 240 490 118 056 156 777 –103 –205 121 –124 29 –227 –3 –139 –945 2 845 –11% –21% 24% –18% 12% –46% –1% –22% –1% 2% Basic Research Defense �� Health and Human Services �� Energy �� NASA �� National Science Foundation �� Agriculture �� Veterans Affairs �� Commerce �� Transportation �� Interior �� Patient-Centered Outcomes Research Trust Fund �� Homeland Security �� Smithsonian Institution �� Environmental Protection Agency �� Education �� Other �� SUBTOTAL �� 2 215 16 701 4 802 3 607 4 739 1 119 538 234 54 49 224 34 11 34 327 2 244 16 859 4 601 3 713 4 818 1 038 538 232 54 53 220 28 11 34 409 2 284 12 114 3 398 4 150 3 402 921 540 197 40 31 225 28 11 27 341 40 –4 745 –1 203 437 –1 416 –117 2 –35 –14 –22 5 0 0 –7 068 2% –28% –26% 12% –29% –11% 0% –15% –26% –42% 2% 0% 0% –21% Applied Research Defense �� Health and Human Services �� Energy �� NASA �� National Science Foundation �� Agriculture �� Veterans Affairs �� Commerce �� Transportation �� Interior �� Patient-Centered Outcomes Research Trust Fund �� Homeland Security �� Smithsonian Institution �� Environmental Protection Agency �� Education �� Other �� SUBTOTAL �� 5 276 17 356 6 491 2 476 778 1 070 780 979 594 745 463 184 420 133 403 38 148 5 101 16 685 6 693 2 517 773 1 055 774 961 602 744 501 179 418 135 421 37 559 5 239 12 348 5 885 2 713 546 904 779 733 497 580 622 125 228 132 317 31 648 138 –4 337 –808 196 –227 –151 5 –228 –105 –164 121 –54 –190 –3 –104 –5 911 3% –26% –12% 8% –29% –14% 1% –24% –17% –22% 24% –30% –45% –2% –25% –16% Experimental Development 2 Defense 3 �� Health and Human Services �� Energy �� NASA �� National Science Foundation �� Agriculture �� Veterans Affairs �� Commerce �� 41 545 27 2 488 4 569 174 28 303 36 219 35 2 533 3 991 173 26 322 49 579 35 1 865 3 734 163 26 191 13 360 0 –668 –257 –10 0 –131 37% 0% –26% –6% –6% 0% –41% 240 ANALYTICAL PERSPECTIVES Table 18–2 FEDERAL RESEARCH AND DEVELOPMENT SPENDING—Continued Mandatory and discretionary budget authority 1 dollar amounts in millions 2017 Actual Transportation �� Interior �� Patient-Centered Outcomes Research Trust Fund �� Homeland Security �� Smithsonian Institution �� Environmental Protection Agency �� Education �� Other �� SUBTOTAL �� Subtotal using the former definition of Development �� 275 152 491 75 87 149 50 363 80 057 2018 Annualized CR 293 164 440 75 80 199 44 550 79 481 2019 Proposed 296 137 392 41 80 157 56 696 95 417 Dollar Change 2018 to 2019 3 –27 –48 –34 0 –42 12 146 15 936 Percent Change 2018 to 2019 1% –16% –11% –45% 0% –21% 27% 20% Facilities and Equipment Defense �� 161 52 54 2 4% Health and Human Services �� 138 193 245 52 27% Energy �� 1 115 1 179 1 537 358 30% NASA �� 52 22 54 32 145% National Science Foundation �� 421 439 229 –210 –48% Agriculture �� 222 221 –74 –295 –133% Veterans Affairs �� Commerce �� 278 318 240 –78 –25% Transportation �� 35 34 33 –1 –3% Interior �� 2 2 2 0 0% Patient-Centered Outcomes Research Trust Fund �� Homeland Security �� Smithsonian Institution �� 27 22 46 24 109% Environmental Protection Agency �� 2 3 0 –3 –100% Education �� Other �� –2 –2 5 7 –350% SUBTOTAL �� 2 451 2 483 2 371 –112 –5% 1 This table shows funding levels for Departments or Independent agencies with more than $200 million in R D activities in 2019 2 The total uses the new Experimental Development definition across the three fiscal years 3 The totals for Experimental Development spending in FY 2017-2019 do not include the DOD Budget Activity 07 Operational System Development due to changes in the definition of development These funds are requested in the FY 2019 Budget request and support the development efforts to upgrade systems that have been fielded or have received approval for full rate production and anticipate production funding in the current or subsequent fiscal year 18 Research and Development that the private sector is better equipped to pursue A key means of stimulating private sector investment and bridging Federal government research with industry development is through the transfer of technology Federal technology transfer seeks to help enable domestic companies to develop and commercialize products derived from government-funded R D which can lead to greater productivity from U S R D investments and ultimately promote the nation’s economic growth Recognizing the benefits of this mechanism the 2019 Budget sustains funding for technology transfer efforts where appropriate The Administration will also be launching a new initiative to enable and enhance the Federal government’s transition of discoveries from laboratory to market as a Cross-Agency Priority Goal Because much of the Federally funded R D is conducted outside of the government the Administration seeks to reduce the associated burdens to funding recipients and partners in order to promote greater effectiveness and efficiency in our Federal spending A significant effort to reduce the administrative and regulatory burdens associated with Federal R D funding is currently underway through new interagency groups One of these an interagency working group on research regulation as required by the Research and Development Efficiency Act is examining ways to reduce the administrative burden on those performing Federally funded research The Administration remains committed to reducing administrative burdens for all Federal grant recipients - not just those for R D Specifically OMB plans to take actions on 241 the recommendations outlined in the DATA Act Section 5 Pilot report which identified specific opportunities to reduce recipient reporting burden The Federal Government also stimulates private investment in R D through tax preferences Historically dating back to the 1950s the private sector has performed the majority of U S R D As of 2015 businesses performed 72% of total U S R D 4 The research and experimentation R E tax credit which was made permanent through the Protecting Americans from Tax Hikes Act of 2015 P L 114-113 and modified in the Tax Cut and Jobs Act of 2017 P L 115-97 essentially provides a credit to qualified research expenses R E tax credit claims have at least doubled over the past two decades growing from an estimated $4 4 billion in 1997 to $11 3 billion in 2013 5 The manufacturing and the professional scientific and technical services sectors account for about 70% of total claims in 2013 4 NSF National Center for Science and Engineering Statistics Dec 2017 InfoBrief - NSF 18-306 5 IRS Statistics of Income Division August 2017 1990-2013 Corporate Returns Data

OCR of the Document

The White House, FY 2019 President’s Budget, “18. Research and Development,” February 2018. Unclassified.