Han para la gerencia de colllll1icaciones Objetivo

Federal funds are the University's single largest source of support for

research, accounting for nearly 55% of all University research expenditures in 2002-03. The Department of Health and Human Services (HHS) and the National Science Foundation (NSF) consistently are a major source of grants to UC, including about 76% of the University’s 2002 federal research awards. Other agencies that figure prominently in the University’s awards are

the Department of Defense (DOD), the National Aeronautics and Space Administration (NASA), and the Department of Energy (DOE). The

University remains highly competitive in terms of attracting federal research dollars, with fluctuations in the University’s funding closely paralleling

trends in the budgets of federal research granting agencies. Thus, the outcome of the annual federal budget process has important ramifications for the University’s research budget.

In the decade between 1982-83 and 1992-93 and again from 1997-98 through 2002-03, federal support for research at the University grew dramatically. With a commitment to research established as a national priority by both the President and the Congress, annual federal research expenditures at the University increased by an average of almost 10% during this period.

Between 1992-93 and 1995-96, however, the focus of the federal government was deficit reduction. As a result, while total University expenditure of federal research dollars continued to increase, the rate of growth slowed. Federal research expenditures at the University increased by an average of about 4% per year, and in 1996-97, there was no increase over the previous year. However, a strong economy, progress toward a balanced budget and continued administrative and congressional support for investments in research again resulted in new growth for funding; the University’s federal research expenditures increased by 7% to 9% each year between 1997-98 and 2001-02.

As a result of the terrorist attacks of September 11, 2001, and the subsequent wars in Afghanistan and Iraq, the FY2002 and FY2003 appropriations for federal research and development (R&D) included record increases, with an emphasis on counterterrorism R&D and other defense-related research. The National Institutes of Health (NIH) also continued to record increases—over 15% in 2002 and in 2003. This is especially significant for UC since the NIH is the largest single sponsor of basic and applied research, and the Department of Health and Human Services, of which NIH is a part, provided 59% of the award dollars in grants to UC in 2002. For 2002-03, the University’s federal research expenditures increased by 16.3%, and the recent large increases in the NIH budget undoubtedly contributed to the large increase in UC’s federal research expenditures last year. The record increases in the NIH budget are unlikely to continue. With the FY2003 appropriations, the Congress and the President completed their 5-year commitment to double the NIH budget, making large increases in UC’s research funding less likely without the driving force of the 15% increases to the NIH budget each year.

Another factor that may impact future federal research budgets is that the overall federal budget outlook has deteriorated dramatically since early 2001 due to the 2000 tax cut, the economic slowdown, and expenditures for

homeland security and the war in Iraq. On August 26, the Congressional Budget Office released updated baseline budget projections for fiscal years 2004-2013. The unified budget baseline for 2002 to 2011 will deteriorate

of $2.3 trillion currently, with the deficit for FY2004 projected at $480 billion. Adding to the difficult Congressional decisions that need to be made in order to pass the annual appropriations bills that constitute the FY2004 federal budget is the President's recent request of a supplemental spending package of $87 billion for Iraq and Afghanistan. Although this request is considered emergency spending, and therefore does not count against the spending total for FY 2004, the large amount of the request coupled with the expectation that much more will be required in the years to come has cast a shadow over the funding for regular federal programs that are already beginning to feel the approaching constraint of the rapidly growing federal deficit.

On October 1, the start of the federal fiscal year, President Bush signed into law the final versions of the FY2004 Department of Homeland Security (DHS) and Department of Defense (DOD) budgets, two of the 13 appropriations bills that constitute the federal budget. Based on information from bills that have passed and are still pending in the

Congress, the American Association for the Advancement of Science (AAAS) predicts that, despite the increasing federal deficit, the overall funding level for federal R&D will still increase by about 7% over FY2003, but over 90% of the increase would go to defense, homeland security, and health R&D. This would mean a modest or no increase across the rest of the federal R&D programs, and funding at agencies such as the United States Department of Agriculture and the Environmental Protection Agency is expected to decline from last year's levels.

As predicted, the bills signed by President Bush include large increases for Homeland Security and Defense. Homeland Security R&D is up 57% from FY2003, and Defense will have a record-breaking R&D portfolio of $66.0 billion. While the overall Defense R&D number is impressive (up over 10%), the bulk of new R&D funding is allocated to missile defense and other weapons development work, mostly performed by industrial firms as defense contractors. Action on other appropriations bills, including an expected 3% to 4% increase in the NIH’s billion dollar budget, is still pending. Continuing resolutions (CR) or temporary appropriations bills will be

necessary to keep government programs operating at FY2003 levels until regular appropriations bills can be signed into law. President Bush signed the first CR on September 30; it funds government programs in unsigned appropriations bills at FY2003 levels through October 31. The University will continue to follow developments in the federal budget process.