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ters, and the Advanced Technology Program and Manufacturing Extension Partner- 

 ships at the Department of Commerce. In addition, federal policy changes enabled 

 the creation of the cooperative research and development agreement, or CRADA, a 

 mechanism for joint R&D involving companies and federal laboratories. 



• Throughout the five decades following World War II, federal funds 

 for R&D were reduced substantially in only one period. The costs of the 

 Vietnam War squeezed nondefense R«StD along with other nondefense discretionary 

 spending. From 1966 to 1975, federal support for nondefense R&D dropped nearly 

 22 percent in real terms. The successful conclusion of NASA's Apollo program 

 contributed to the decline in federal R&D funding during that period, as did skepti- 

 cism about the value of advanced technology that was engendered by the Vietnam 

 War and the contemporaneous environmental movement. 



Since the mid-1980s, the continuing struggle to control federal budget deficits 

 has put increasing pressure on federal R&D funding. R&D programs have had to 

 compete for money more directly with other federal activities and have also been 

 affected by the various mechanisms adopted to enforce budget deficit reduction, 

 including the Balanced Budget and Emergency Deficit Control Act of 1985 (com- 

 monly known as the Gramm-Rudman-Hollings Act) and its amendments as well as 

 the Budget Enforcement Act of 1990. 



Budgetary' pressure on federal R&D spending is intense today. Federal funds 

 previously appropriated to suppon R&D during Fiscal Year 1995 have been cut 

 (rescinded) by nearly $2 billion. Furthermore, much larger cuts in federal R&D 

 funding are slated for Fiscal Year 1996, and pressures on federal discretionary spend- 

 ing make further cuts in future years likely. 



Key Roles of the Federal Government 

 in U.S. Research and Development 



In keeping with national aspirations and the practice of governments of all 

 advanced nations, the federal government provides a substantial proportion of the 

 direct financing for R&D done in this countr\', and it also offers incentives to private 

 interests to support R&D. Many other federal policies affect the performance of 

 R&D and the use of its results — some policies stimulate such activity', while others 

 create barriers to it. 



Tlje federal government invests in building and strengthening 

 the research and development essential to pursuing 

 a variety of national goals. 



Much of the federal science and technology investment is intended to help 

 build the base of scientific and technical knowledge and expertise used by govern- 

 ment and industry- to address important national goals, such as national defense, 

 space exploration, economic growth, and protection of public health and the envi- 

 ronment. The federal government has assumed a central responsibility for support- 

 ing graduate education in science and engineering because of its critical importance 

 to the continuing vitalirv' of the nation's innovation system. Most of this support is 

 provided by the funding of R&D at universities, which offers students the opportu- 

 nity to carr\' out cutting-edge research as an integral part of their education. 



