budget, and the principal functional areas 

 toward which R&D is directed.* 



Total Federal 



outlays and R&D obligations 



Federal expenditures for R&D (including 

 R&D plant), as a percentage of total Federal 

 outlays, declined appreciably after 1965, drop- 

 ping from 13 percent of the total budget to 7 

 percent in 1974 (figure 2-8). This reduction 

 results from a mixture of rapid growth in Federal 

 outlays in areas which have small R&D expen- 



Figure 2-8 



Federal Expenditures'" for Research, 

 Development and R&D Plant, as a Percent of 

 Total Federal Outlays, and as a Percent 

 of the Relatively Controllable Portion of 

 the Federal Outlays, 1960-74 



(Percent) 

 18 



J L. 



1960 



•66 



74 

 (est.) 



(a) Reported by Federal agencies. 

 SOURCE National Science Foundation, 



» Data are available regarding R&D by functional area only 

 for Federal sources. The chapter titled "Industrial R&D and 

 Innovation" discusses R&D expenditures by industries and 

 by product fields. 



ditures (e.g., income security and social services), 

 and diminished expenditures for space R&D. 



Obligations for R&D may be viewed also in 

 relationship to the controllable portion of the 

 Federal budget. To an increasing degree, expan- 

 sion of the Federal budget is due to "fixed cost 

 and open ended" programs which increase by 

 law, and are not established by the current 

 budgetary action of either the legislative or the 

 executive branches. These include various 

 programs, such as income security, medical 

 benefits, interest on Treasury bonds, and 

 revenue sharing. When these programs are 

 excluded, the remaining portion of the budget — 

 the relatively controllable portion — is estimated 

 to account for 46 percent ($125.4 billion) of the 

 1974 Federal budget obligations; in 1967 (the 

 earliest year for which such data are available), 

 the controllable fraction is estimated to have 

 amounted to 65 percent of total obligations." 

 Federal funds for R&D represented 15 percent 

 of the relatively controllable portion of the 

 budget in 1074, down from 16 percent in 1967 

 but greater than the low of 14 percent in 1970 

 (figure 2-8). 



Areas of Federally funded R&D 



R&D funded by the Federal Government can 

 be separated into three categories in terms of 

 broad function: national defense, space explora- 

 tion, and "civilian" areas (such as energy, the 

 environment, and health). This division is shown 

 in figure 2-9 for Federal obligations. i° 



The most salient aspects of the figure are: (a) 

 the large fraction of total Federal R&D 

 obligations for national defense (52 percent in 

 1974); (b) the rapid growth of R&Dexpenditures 

 in civilian areas (up from 24 percent of all Federal 

 R&D obligations in 1969 " to 34 percent in 



" These estimates were obtained from Federal Funds for 

 Rfii-mih. Devetopmenl. and olher Scientific Activities. National 

 Science Foundation, (NSF 74-320). The "relatively con- 

 trollable" and "uncontrollable" components identified in the 

 NSF report are identical, in concept and numerical value, to 

 the "discretionary" and "mandatory" components defined in 

 Setting National Prwrities^Tlie 1975 Budget. Brookings Institu- 

 tion, 1975. 



i» See the chapter in this report, entitled, "International 

 Position of U.S. Science and Technology" for a comparison of 

 the U.S. with other countries regarding the distribution of 

 government R&D funds among areas of national goals. 



'1 Comparable data are not available for years prior to 

 1969. 



38 



