The Federal RD Budget Process 101 Matt Hourihan

The Federal R&D Budget Process 101 Matt Hourihan December 12, 2017 For the Sandia National Laboratories Nuclear Weapons Management course AAAS R&D Budget and Policy Program http: //www. aaas. org/program/rd-budget-and-policy-program Copyright © 2015 American Association for the Advancement of Science

The Federal Budget is Kind Of a Big Deal § Major impact for R&D and innovation: most basic research, and most university research, is federally funded § “Politics is who gets what, when, and how. ” - Harold Lasswell § Public dollars are scarce resources § The budget process is ultimately a negotiation between competing interests (and their proxies) in a decentralized system § Budget choices are influenced by many things at every step: § values; politics and political constituencies; power and control; tradeoffs; incrementalism; rules and institutions; and even merit! Copyright © 2015 American Association for the Advancement of Science 2

The Budget Process at a Glance Executive Branch Legislative Branch White House Agencies Budget Committee s OMB Budget Resolution OSTP February Budget Request Appropriations Committees & Subcommittees SPENDING BILLS (x 12) § Timeline is 18 months or more from the start of agency planning to completion of appropriations and start of the fiscal year on October 1, however… § Congress hasn’t gotten appropriations finished on time since 1996 Copyright © 2015 American Association for the Advancement of Science 3

Agencies in the Budget Process Executive Branch § Agency process kicks off 18+ months in advance. Generally: § Developing strategic priorities, objectives (winter/early spring) § Then developing and iterating concrete, detailed program proposals and scenarios (spring/summer) § Often bottom-up: small units larger units agency leadership/CFO § Ingredients include: § Agency head and staff judgment § External input from advisory or review committees, workshops or meetings, NAS surveys, Congress, etc. § Incrementalism: last year’s budget influences next year’s § Performance metrics White House Agencies OMB OSTP Copyright © 2015 American Association for the Advancement of Science 4

The White House in the Budget Process Executive Branch § White House Agencies OMB = Office of Management and Budget § Spring: Guidance memo to agencies § Fall: Thorough, detailed review of agency OMB § OSTP = Office of Science and Technology Policy § Summer: joint memo with OMB outlining § § § budget submissions, followed by “passbacks” and appeals OMB’s job is to constrain spending broad S&T priority areas for investment Advice (with PCAST) and coordination with President, agencies, OMB, NSTC on science investments and strategies High-level political, spending, or legislative priorities Negotiation with agencies Things must wrap in January (This is all truncated in transition years) Copyright © 2015 American Association for the Advancement of Science 5

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The Budget Process at a Glance Executive Branch Legislative Branch White House Agencies Budget Committee s OMB Budget Resolution OSTP February Budget Request Appropriations Committees & Subcommittees SPENDING BILLS (x 12) § Congress has the Power of the Purse § Does the President’s Budget even matter? Only as much as Congress lets it Copyright © 2015 American Association for the Advancement of Science 8

The Budget Resolution Legislative Branch § Established by 1974 CBA § Intended to reassert legislative control § Overall framework: § § § Revenue, deficit, and total spending targets Non-binding recommendations Key for R&D: discretionary spending limit to govern appropriations § Isn’t law and can’t change law, but can set up reconciliation instructions (i. e. tax reform this year) Budget Committee s Budget Resolution Appropriations Committees & Subcommittees SPENDING BILLS (x 12) § Best seen as a political document as much as a governing document § Partly because it isn’t always adopted… Copyright © 2015 American Association for the Advancement of Science 9

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Enter the Appropriators Executive Branch Legislative Branch White House Agencies Budget Committee s OMB Budget Resolution OSTP February Budget Request Appropriations Committees & Subcommittees SPENDING BILLS (x 12) § Budget resolution discretionary target spending caps for each appropriations bill § Twelve appropriations subcommittees = twelve spending bills Copyright © 2015 American Association for the Advancement of Science 13

From Budget to Appropriations § Budget Resolution limits Approps Committees Subcommittees § These caps remain in place all the way through floor consideration § Led by “Cardinals” § Committee Chairs: Rep. Rodney § § Frelinghuysen (NJ), Sen. Thad Cochran (MS) Ranking Members: Rep. Nita Lowey (NY), Sen. Patrick Leahy (VT) Appropriators will often have their own priorities § “All politics is local” § Merit, ideology, constituent needs, § § balance and tradeoffs, waste and good government “President proposes, Congress disposes” Key: Getting bills that can pass Copyright © 2015 American Association for the Advancement of Science 14

Energy & Water Subcommittee House Senate Chair Mike Simpson (ID) Lamar Alexander (TN) Ranking Member Marcy Kaptur (OH) Dianne Feinstein (CA) § § § Tradeoffs: Balancing basic research and facilities, labs, tech portfolio, NNSA; also Army Corps, Bureau of Reclamation NNSA prioritized Office of Science: flat in House, +3% in Senate § ASCR boosted in both (exascale, facilities) § Construction prioritized § Variation on Fusion Science Applied tech: Mixed reductions § ARPA-E zeroed in House § Very mixed for EERE, Fossil, Nuclear, grid Hubs, manufacturing institutes, other research centers mostly preserved Copyright © 2015 American Association for the Advancement of Science 15

Commerce, Justice, Science Subcommittee House Senate Chair John Culberson (TX) Richard Shelby (AL) Ranking Member Jose Serrano (NY) Jeanne Shaheen (NH) § § Tradeoffs: Balancing Justice, Commerce, NASA, NSF; smaller bills this year NSF: Cut by ~2% in both § House: no funding for vessels; physical and biological disciplines targeted on floor Senate: research, EHR trimmed § § § NASA: recent priority, but modest this year § Variation in Science Directorate funding; Exploration favored; Education protected NOAA: Sea Grant, most research protected § Climate research cut by 19% in House § Major differences re: Polar Follow-On NIST: Senate more generous; labs fare better than industrial innovation programs Census: boosted by 4%, but is it enough? Copyright © 2015 American Association for the Advancement of Science 16

The Budget Process at a Glance Executive Branch Legislative Branch White House Agencies Budget Committee s OMB Budget Resolution OSTP February Budget Request Appropriations Committees & Subcommittees SPENDING BILLS (x 12) Copyright © 2015 American Association for the Advancement of Science 17

The Budget Process at a Glance Executive Branch Legislative Branch White House Agencies Budget Committee s OMB Budget Resolution OSTP February Budget Request Appropriations Committees & Subcommittees SPENDING BILLS (x 12) “Please don’t veto us!” Copyright © 2015 American Association for the Advancement of Science 18

Other Legislative Tools for Spending § Continuing Resolutions § …with depressing regularity § Uncertainty? New starts? § Omnibus § Or minibus, or megabus, or cromnibus, or… § Supplementals § i. e. Zika, Ebola, Hurricane Sandy § Also war funding § Not subject to spending caps Copyright © 2015 American Association for the Advancement of Science 19

The Federal Budget Cycle § Gov’t is usually working on 3 budgets at a time § (However, presidential transitions complicate things) Copyright © 2015 American Association for the Advancement of Science 20

Progress to Date On R&D-Relevant Spending Bills Bill House Floor Senate Committee Agriculture X X Defense X Commerce, Justice, Science X Energy & Water X Homeland Security X Interior & Environment X Labor, HHS, Education X X Milcon, Veterans X X State X X Transportation, HUD X X Copyright © 2015 American Association for the Advancement of Science 21

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Looking Ahead § FY 18 spending caps: Where do we end up? § House and Senate have budget resolutions, but… § Will need to work with Senate Democrats on any deal to change the caps § Increasingly likely we’re getting a cap deal § FY 18 appropriations: § CR in place until later December § House finished, Senate close § Will the White House ultimately go along with any of this? § Signaled willingness to sign House omnibus § Implications of other policy issues: tax reform, border wall, DACA, etc? Copyright © 2015 American Association for the Advancement of Science 23