Reading Between the Budget Numbers : Taxpayers Not Getting the Most From R&D; Dollars

Unless they want to be typecast as ingrates, America’s competitiveness constituencies better have few complaints about the Clinton Administration’s proposed science and technology budget. Judged strictly by the numbers, the President’s package unquestionably delivers the goods during a time of intense fiscal austerity.

While virtually every other budget segment got nicked, the Administration asked for more than $71 billion in spending--excuse me, investment--for federally funded research and development in fiscal 1995 (beginning Oct. 1), roughly a 4.1% increase over current levels. Of that, the civilian R&D; budget would climb $1 billion, to $32 billion.

The biggest single sci-tech winner has to be the Commerce Department’s National Institute for Standards and Technology. The former National Bureau of Standards has seen its budget explode from $381 million in 1993 to $520 million in 1994 to next year’s proposed $935 million--an 80% increase in a single year.

The reason? Clinton’s competitiveness cabal believes the NIST’s Advanced Technology Program can be an effective venture capitalist in critical technologies--a civilian counterpart to the Pentagon’s historically successfully Advanced Research Projects Agency. Can an agency that has had a modest record of funding accomplishments preserve quality through this sort of scale-up? That’s a question that may come back to haunt the Administration in 1996 as Americans ask what returns they are getting for their government’s high-tech investments.

Other winners include the National Institutes of Health, with a 4.7% increase to $11.5 billion, including money earmarked for both AIDS research and breast cancer analysis; the National Science Foundation, which supports more than half the nation’s non-medical basic research at universities; global warming research, and Vice President Al Gore’s multimedia-hyped information superhighway, which would see its funding rise to more than $400 million. The Administration was generous toward the Human Genome Initiative.

Even NASA--which faces a $250-million trimming of its $14.5-billion budget--came out a winner. Here’s an agency with a confused mission, a series of recent multibillion-dollar fiascoes on its launch pads and orbits and a space station proposal that has been transformed from a symbol of U.S. space leadership to a medium for international cooperation between America and the old Soviet Union (or is that the New Russia?). NASA Administrator Daniel Goldin--as savvy a federal technocrat as they come--is lucky the Administration didn’t completely re-engineer his agency. Then again, given that Housing and Urban Development and Veterans Affairs share NASA’s congressional subcommittee, he’d better be careful when the House comes down.

Clearly, when even performance losers can be budget winners, America’s science and technology establishment knows it has a friend in the White House.

But true friends had better do more than open their wallets and pick up the checks. This Administration’s budget proposals ignored several opportunities to give taxpayers more R&D; value for their dollar.

For example, the Administration is still struggling with how best to manage the nation’s multibillion-dollar network of national labs in the post-Cold War era. One proposal is that up to 20% of a lab’s budget be contingent upon finding matching funds from industry to pay for specific research programs and projects. That way, labs are forced to become more market-oriented and industry-sensitive. Instead, the Administration has opted to push for more collaborative ventures between industry and the labs without attaching any particular market incentives.

Consider the information superhighway effort. Does it make sense for government to invest more in digital R&D; alongside industry? Or should government money go into the creation of standards and special procurements that would boost private-sector initiatives? These are the questions that the euphoria over the technology budget has unfortunately obscured.

At the core of the problem is performance measures: How does the Administration determine the effectiveness of its competitiveness funding? When you are funding research for the sake of advancing knowledge, the bottom line is secondary. When you are funding research and development to stimulate economic growth and enhance U.S. competitiveness in key technologies, how do you know you’re getting your money’s worth? How do you know you’re coordinating your investments appropriately?

In fact, the Clinton Administration is in the process of completely revamping its science and technology infrastructure. The Federal Coordinating Council for Science, Engineering and Technology, run out of the White House, has been dismissed as toothless. Now there’s going to be a new national Science and Technology Council, which will absorb the National Space Council, the National Critical Materials Committee and the FCCSET. It’s supposed to be on par with the National Security Council and Bob Rubin’s National Economic Council. President Clinton is supposed to chair the new committee. One of the biggest questions in Washington’s technocracy is whether the President will be actively involved or will defer management to his vice president.

Is this merely inside-Beltway baseball? Absolutely not. For better or worse, this is an Administration that is putting taxpayer’s money where its mouth is in the high-tech arena. This is an activist Administration that wants to become even more activist. Who gets to run the show has enormous implications for everything from defense conversion to biotech to Silicon Valley to Route 128.

Prediction: Next year’s science and technology budget--and how it’s coordinated--will be far more interesting to watch than this year’s.