Physical scientists offer outside-the-box idea for funding U.S. basic research

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Budget 2017: Mandatory spending dims prospects for Obama’s budget

President Barack Obama and the Republican-led Congress reached an agreement last December on a 2-year spending plan that was supposed to lead to a temporary truce in the annual federal budget wars. But this week Obama broke that truce, at least in the eyes of most Republicans, with a 2017 budget request that aims to use revenue not covered by that agreement to boost the budgets of several research agencies. The fiscal legerdemain is likely to trigger even more of a partisan standoff with Congress and darken an already cloudy picture for U.S. researchers who rely on federal funding.

The new wrinkle is the administration’s heavy reliance on what is called mandatory spending, which would fund a specific program using revenue generated by the sale of a government asset, such as oil in the strategic petroleum reserve, or a particular tax or license fee. That sidesteps the annual congressional appropriations process that divvies up what is known as discretionary spending, money from the government’s general pot of tax and other revenue. Typically, mandatory funding streams continue indefinitely—and don’t have to be revisited and approved each year—unless Congress specifies otherwise.

Overall, two-thirds of next year’s proposed $6 billion increase in overall federal research spending—a 4% boost to $152 billion—would come from mandatory sources. Although Congress has approved plenty of mandatory spending programs—the National Science Foundation (NSF), for instance, gets a regular stream of money from visa fees for science education efforts—lawmakers are often loath to approve them, because they are perceived to reduce congressional control over spending.

Mandatory mayhem

The use of mandatory spending in its 2017 budget request allows the Obama administration to remain within the bounds of the December 2015 agreement—which set discretionary spending at $1.070 trillion, only $3 billion more than in 2016—without sacrificing his ambitious plans to invest in all manner of research-related activities. Those new initiatives range from fighting a fresh war on cancer and developing cleaner energy and transportation systems to doubling spending on competitive agricultural research and improving the computer literacy of U.S. school children. And those proposals come on top of existing efforts, such as the precision medicine initiative and the Brain Research through Advancing Innovative Neurotechnologies initiative.

At some agencies, the requested mandatory spending increase overrides a cut in discretionary spending. The $33.1 billion requested for the National Institutes of Health (NIH), an increase of $1 billion, includes $1.8 billion in mandatory spending. To biomedical lobbyists doing the arithmetic, that sounds like an $800 million cut in NIH’s discretionary budget. It’s an approach Congress isn’t likely to accept, the lobbyists note.

Similarly, the $5.6 billion science program at NASA is essentially flat-funded in Obama’s request. But his request contains $289 million in mandatory revenues, meaning NASA’s science programs would take a 5% hit in its discretionary budget.

At NSF, its 6.7% increase, or $500 million, comes largely from mandatory spending—some $400 million that agency officials say will target young investigators launching their careers. NSF’s “discretionary” increase is a much more modest 1.3%.

The Department of Energy’s $5.3 billion Office of Science does best among large research agencies in navigating these treacherous waters. Only $100 million of the president’s proposed $325 million boost for the office’s six major research areas comes from mandatory spending. That leaves the office with a 4.2% increase in discretionary spending.

Little explanation

Agency officials were hard-pressed to explain the mandatory wrinkle in their budgets. That’s hardly a surprise, given that the decision to deploy it was made by the White House after the December 2015 spending agreement with Congress had been struck. The annual budget cycle begins in September, when agencies submit a spending blueprint that they have spent months drafting. Administration budget officials then vet the proposal to reflect their boss’s priorities, agencies react, and the final product emerges in February as the president’s official budget request to Congress.

Asked at a 9 February budget briefing to explain how agencies decided which programs would be funded with discretionary spending and which with mandatory spending, presidential science adviser John Holdren said that “the mandatory items were those that were both high priority and for which pay-fors could be readily identified.” (Pay-fors refer to the exact revenue stream, yet to be identified by the administration, that would fund specific activities.)

When ScienceInsider sought more details, Holdren called on an aide. “The president felt that there were opportunities, indeed needs, for these investments that could not be accommodated under the discretionary caps that existed in last fall’s budget agreement,” explained Kei Koizumi, head of research at the White House Office of Science and Technology Policy in Washington, D.C., which Holdren directs. “And the administration feels that there might be opportunities for the president and Congress to reach agreement on the use of these additional mandatory funds.”

As an example, Koizumi cited legislation passed by the House of Representatives, known as 21st Century Cures, that would tap the strategic petroleum reserve to fund billions of dollars in NIH research, as well as the long-running use of mandatory sources to fund some types of agricultural and food research. “These are encouraging signs,” Koizumi said.

That’s not the view of Republican legislators, however. “[This is] another unrealistic budget from the president that spends money we don’t have,” says Representative Lamar Smith (R–TX), the chairman of the House science committee. He said Obama’s proposal to levy a $10-a–barrel tax on crude oil, one of several possible mandatory revenue sources, is the latest of a series of “costly, ineffective energy subsidies and taxes” from a Democratic president starting his final year in office.

Although most media have used the clichéd “dead on arrival” label to describe Obama’s 2017 budget request, Congress is still bound by the December 2015 agreement. And although legislators are extremely unlikely to embrace mandatory spending, don’t be surprised if some of the president’s research priorities survive in some form as Congress struggles to put together its own spending plan.

For those focused on the final 2017 number for each research agency, optimists say Congress could finish its work before the November election. But others see the status quo stretching into the new year, with the next president in office before a final agreement is reached.

*Check out more of Science's coverage of the president’s request for individual agencies here.

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