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February 6, 2006
Quick take on the budget
The President's budget, released this morning, is an "on the one hand and on the other hand" affair. The President has vowed to cut discretionary spending and make the tax cuts permanent. But he also has proposed a new science and education initiative (American Competitiveness Initiative).
A broad view of these areas can be found in Chapter 6 of the Analytical Perspectives where OMB publishes special budget "crosscuts", including an analysis of Federal investments. That category includes not only physical investments, but also the conduct of research and development and the conduct of education and training. Here is what budget has to say about these latter two categories:
Conduct of research and development. Outlays for the conduct of research and development are estimated to be $130.7 billion in 2007. These outlays are devoted to increasing basic scientific knowledge and promoting research and development. They increase the Nation's security, improve the productivity of capital and labor for both public and private purposes, and enhance the quality of life. More than half of these outlays, an estimated $76.8 billion, are for national defense. Physical investment for research and development facilities and equipment is included in the physical investment category. Nondefense outlays for the conduct of research and development are estimated to be $53.9 billion in 2007. These are largely for the National Aeronautics and Space Administration, the National Science Foundation, the National Institutes of Health, and research for nuclear and non-nuclear energy programs. A more complete and detailed discussion of research and development funding appears in Chapter 5, "Research and Development," in this volume.Conduct of education and training. Outlays for the conduct of education and training are estimated to be $85.5 billion in 2007. These outlays add to the stock of human capital by developing a more skilled and productive labor force. Grants to State and local governments for this category are estimated to be $52.6 billion in 2007, more than three-fifths of the total. They include education programs for the disadvantaged and individuals with disabilities, other education programs, training programs in the Department of Labor, and Head Start. Direct Federal education and training outlays are estimated to be $32.9 billion in 2007. Programs in this category are primarily aid or higher education through student financial assistance, loan subsidies, the veterans GI bill, and health training rograms. The decline from 2006 to 2007 results in part from upward reestimates of $11.4 billion in 2006 in loan subsidies for loans made in earlier years.
This category does not include outlays for education and training of Federal civilian and military employees. Outlays for education and training that are for physical investment and for research and development are in the categories for physical investment and the conduct of research and development.
The numbers are as follows (in billions):
Conduct of research and development: $119.8 (FY 2005) - - - $127.4 (FY2006) - - - $130.7 (FY 2007)
National defense: $70.6 (FY 2005) - - - $75.6 (FY2006) - - - $76.8 (FY 2007)
Nondefense: $49.2 (FY 2005) - - - $51.8 (FY2006) - - - $53.9 (FY 2007)
Conduct of education and training: $94.7(FY 2005) - - - $104.2 (FY2006) - - - $85.5 (FY2007)
Grants to State and local governments: $51.6(FY 2005) - - - $53.7 (FY2006) - - - $52.6 (FY2007)
Direct Federal: $43.2(FY 2005) - - - $50.5 (FY2006) - - - $32.9 (FY2007)
So education and training is below the FY 2005 level while research and development is up.
But, like every thing else, the Devil is in details. In the Education Department's budget, the following new programs get funded as part of the American Competitiveness Initiative:
Math Now for Elementary Schools Students: $125 million
Math Now for Secondary School Students: $125 million
Advanced Placement: $122 million (up from $32 million last year)
National Mathematics Panel: $10 million
Evaluation of Mathematics and Science Education Programs: $5 million
Adjunct Teacher Corps: $25 million
At the same time, the budget cuts almost $1.2 billion from vocational education and the overall department budget declines by $2 billion.
Likewise on the science and technology side, the National Science Foundation's budget goes up by almost $500 million in budget authority (around a $100 million in actual outlays in FY 2007). But the budget calls for the elimination of the Advanced Technology Program and a 2/3 cut in funding for the Manufacturing Extension Partnership.
In sum, add little on this side and take a little from over here.
P.S. - just a cautionary note. This is the opening of the complicated budget dance. This can, and most likely will, change before we are through.
Posted by Ken Jarboe at February 6, 2006 6:49 PM
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