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federal R&D budget has been tallied up after the fact— it is the sum of R&D expendi- 

 tures from federal departments and agencies used mainly for comparison with other 

 federal expenditures or with the R&D budgets of other industrialized nations. Be- 

 cause it is added together after the individual budget and appropriations decisions 

 have been made, it has never been "managed" as a coherent whole. Yet there is a 

 federal process — one that engages a broad range of issues, complex interactions, , 

 and conflicts — from which de facto priorities emerge. Those priorities reflect 

 contending goals, different performers (public or private; university, industry, or 

 federal laboratories), multiple funding sources (almost every federal department and 

 agency), competing jurisdictions (executive and legislative branches; budget, appro- 

 priations, and authorization committees within Congress), and international eco- 

 nomic competition (proprietary national investment or international cooperation). 



The extraordinary success of U.S. research and development can be continued 

 within current budget constraints. However, ensuring continuing success will 

 require rigorous discipline and a coherent and comprehensive approach for decid- 

 ing how resources are used. This repon proposes a new process for allocating and 

 monitoring federal spending for science and technolog}^ across disciplines and 

 government agencies. With an integrated view and a coherent federal science and 

 technology budget, it will be possible to make selective reductions in some areas, so 

 as to free badly needed resources for more productive investments and new oppor- 

 tunities that arise. 



Defining a Federal Science and Technology Budget 



To obtain advice on an appropriate budget design. Congress asked this com- 

 mittee to recommend criteria for federal support of research and development. 

 Federal research and development expenditures are reported in current budget 

 documents as being more than $70 billion annually. ' Almost half of this amount, 

 however, is spent on such activities as testing and evaluation of new aircraft and 

 weapons systems in the Department of Defense, nuclear weapons work in the 

 Department of Energy, and missions operations and evaluation in the National 

 Aeronautics and Space Administration. Those activities are very important, but the)' 

 involve the demonstration, testing, and evaluation of current knowledge and exist- 

 ing technologies. Even when they are technologically advanced, these functions do 

 not involve the creation of new knowledge and the development of new technolo- 

 gies. The federal research and development budget as currently reported is thus 

 misleading, because it includes large items that do not conform to the usual mean- 

 ing of research and development. - 



In studying how to ensure the continuing vibrance of U.S. research and devel- 

 opment, the committee focused on the $35 billion to $40 billion in federal research 

 and development spent annually on expanding fundamental knowledge and creating 

 new technologies (see Supplement 2). Those are the expenditures that constitute 

 federal support for a national science and technology base that underlies not only 

 defense and space programs, but also the advancement of scientific knowledge and 

 new technology used in many fields and industries. To focus discussion and more 

 clearly identify this investment component of the federal research and development 

 budget, the committee developed the term federal science and technology (FS&T) 

 and an accompanying budget index (for details, see Supplement 2, especially Boxes 

 II. 3 and II. 4). FS&T is used throughout this report to describe federal funding for 



