News

Federal budget for FY 2013 is finalized, FY 2014 budget process begins

Science agency budgets caught in debates about federal spending.

By Pat Kobor

There was a great deal of relief in federal science agencies when H.R. 933, the final funding bill for fiscal year 2013, was approved in mid-March. The agencies had been operating with temporary authority for nearly six months, and many had withheld new initiatives and announcements and postponed decisions, waiting to learn how much money they had to spend. While in many cases the final amounts were nothing to celebrate, having a real bottom line was good news. Scientists can expect to see a lot of action in the agencies, especially in the next three to four months, as projects are funded and announcements that had been withheld are released.

FY 2013 science budgets see reductions

Looking at the science budgets, however, the news overall was not good. The bill sets up nearly $10 billion in cuts to research and development. It reduces research and development funding by $506.6 million from FY 2012 levels, according to estimates by the American Association for the Advancement of Science (AAAS) (PDF, 35KB), but because it also leaves sequestration in place, federal R&D may be reduced by $9.6 billion in all below last year’s levels, a 6.9 percent decline.

According to a useful summary by AAAS, Department of Defense (DOD) R&D will be reduced by around $7.0 billion (9.4 percent below FY 2012), with Congress cutting $1.3 billion and sequestration accounting for the rest — though the percentage cut from the Defense Health Program research will be somewhat smaller than that of the DOD overall cuts due to a congressional boost.

Cuts to nondefense research agencies were not uniform. National Science Foundation R&D received an increase of $152 million or 2.7 percent, which would leave the agency's R&D budget only 2.4 percent below FY 2012 levels after sequestration. The political science research program at the National Science Foundation was preserved but with evident restrictions: see coverage in the COSSA Washington Report. And despite a small boost to the National Institutes of Health, sequestration will still leave the agency’s R&D funding roughly $1.4 billion or 4.8 percent below FY 2012 levels.

When adjusted for inflation, these figures put federal R&D investment at its lowest level since FY 2002, and more than $25 billion in constant dollars below the all-time peak in 2010. This represents a roughly 17.1 percent decline in just three years. AAAS’s R&D Budget website has additional details.

Looking toward FY 2014

Both the House and the Senate adopted budgets during March for 2014, the fiscal year beginning on Oct. 1, 2013. And whereas it would be reasonable to assume the House and Senate would form a conference committee to iron out those differences and adopt one budget, most observers believe the differences in the two chambers’ budgets are too vast to permit an agreement. Remember that budgets are big-picture documents: they often assume changes in laws that affect revenue or outlays. Budgets cannot make those legal changes, they only reflect assumptions. For that reason even a budget that has been approved by both the House and Senate does not have the force of law. But budgets can be very influential nonetheless because they serve as statements of principles and priorities.

The House budget plan championed by Budget Chairman Paul Ryan, H. Con. Res. 25 (PDF, 328KB), would balance the budget in 10 years, cut taxes, make nearly $5 trillion in additional cuts, repeal the Affordable Care Act and make major changes to Medicare and Medicaid. It would also eliminate the Departments of Housing and Urban Development, Education, Energy and Commerce. It passed the House with no Democratic support, and with 10 Republicans voting against. The plan is $92 billion below the $1.058 trillion cap Congress agreed to in the 2011 Budget Control Act, and its budget cuts are heavily weighted to non-defense discretionary accounts. Ryan’s budget protects defense from sequester cuts by keeping the defense cap at the pre-sequester level of $552 billion and lowering the non-defense cap to $414 billion.

S. Con. Res. 8 (PDF, 377KB), the plan drafted by Budget Committee Chairman Patty Murray, would cut spending by $975 billion over 10 years, raise the same amount in new taxes for corporations and wealthier taxpayers, provide $100 billion for infrastructure and workforce training programs and reduce the deficit by $1.85 billion. Her budget assumes a $566 billion deficit at the end of 10 years. Unlike Ryan’s budget, the Democratic plan includes replacement of the sequester in its deficit reduction estimate. (The GOP plan proposes cutting the deficit by $4.6 trillion beyond the $1.2 trillion sequester savings.) The bill passed with a 50-49 vote.

The primary purpose of any budget resolution is to set a limit on discretionary spending in the coming fiscal year. Both the House and Senate plans use the same overall discretionary spending cap for fiscal 2014, $966 billion. That’s the level of spending that would be allowed after budget caps are lowered by the sequester next year.

The president’s 2014 budget, to be released in early April, is expected to steer a middle course between the House and Senate versions. It is unlikely that any vote will occur on adoption of the president’s budget, and its appearance after both chambers have already passed budgets makes it less consequential than usual.  However, the assumptions it includes (regarding entitlement reform, for example) will be influential in negotiations between the parties. The federal debt limit must be raised near the end of May, and the House will likely press for additional deficit reduction measures around that time. Readers may recall the disagreement over raising the debt limit is what led to passage of the Budget Control Act in 2011.

Up-to-date information about the president’s budget and other budget news can be found on APA’s Federal Budget Blog.  The APA Science Directorate’s Government Relations Office continues to lobby Congress to eliminate the sequester. APA is also working in coalitions to increase budgets for National Institutes of Health, National Science Foundation and other science funding agencies.

Pat Kobor is Senior Science Policy Analyst in the APA Science Directorate’s Government Relations Office.