White House Releases FY 2014 Budget

White House Releases FY 2014 Budget by Glynda Becker, Director for Federal Relations and Mariah Luft, Assistant Director for Federal Relations

It is budget week here in Washington, DC. After a two-month delay, President Obama released his FY 2014 budget proposal.  The $3.78 trillion proposal includes a mixture of entitlement cuts to Medicare, Social Security and increasing revenue by taxing the wealthy.   The President’s budget proposal would also replace the across-the-board cuts of sequestration and reduce the deficit by $1.8 trillion over the next 10-years.

In his press conference introducing his budget, the President stated, “nothing shrinks the deficit faster than a growing the economy” and the theme throughout the budget is investment in STEM education, research and development. The budget highlights the Administration’s belief that STEM education is key to driving economic prosperity and keeping the United States competitive.  The budget proposal includes an increase of $1.9 billion over the FY 2012 enacted levels for Federal R&D.  The Federal research portfolio would increase by $4.8 billion.  Through consolidating and reorganizing programs, the budget proposal includes $3.1 billion for STEM education.

By the numbers, what does this mean for Research and Development?

  • National Institutes of Health’s budget would increase 1.5% to $31.3 billion
  • Department of Energy R&D would increase 18% to $12.7 billion
  • National Aeronautics and Space Administration R&D would increase 2.6% to $11.6 billion, despite a $50 million cut in the overall budget
  • National Science Foundation budget would increase 8.4% to $7.6 billion
  • U.S. Global Chance Research Program would increase 6.0% to $2.7 billion
  • Department of Homeland Security R&D would increase 186% to $1.4 billion
  • U.S. Geological Survey budget would increase 9% to $1.2 billion
  • NISTs intramural laboratories would increase 21.0% to $754 million
  • NOAA’s R&D budget would increase 28% to $733 million
  • Department of Defense R&D would decrease by 6.3% to $68.3 billion
  • Environmental Protection Agency R&D would decrease by 1.4% to $560 million
  • National Nanotechnology Initiative would decrease by 9% to $1.7 billion
  • Advanced Manufacturing R&D would receive $2.9 billion, $1 billion for 15 manufacturing innovation institutes in the National Network for Manufacturing Innovation.
  • BRAIN Initiative would receive $100 million in funding from NIH, DARPA and NSF

By agency, what does this mean for the programs important to Washington State University?

Department of Education

The Department of Education would receive $71.2 billion for FY 2014 under the President’s budget, a 4.6% increase.  The President’s proposal includes $1 billion for a Higher Education Race to the Top Competition providing competitive grants to States leading innovative changes in higher education policies and practices, including maintaining affordability.  Ten billion dollars would be provided for Supplemental Education Opportunity Grant, Federal Work Study and Perkins Loan.  The Pell Grant program would receive full funding through the 2015-2016 academic year.  While the student loan interest rates would be set year-to-year and based on the market interest rate.   The largest change to the Department of Education is in line with the President’s agenda around STEM education by recommending a major reorganization of STEM education that would lead to greater partnership and collaboration with the National Science Foundation.

Department of Agriculture

The Department of Agriculture receives $22.6 billion in the President’s proposed budget.    The proposed budget recommends about a 3% cut through cutting farm subsidies including direct payments, saving $ 32 billion over the next decade and streamlining and closing some of the smaller USDA offices located across the country.

The Agriculture and Food Research Initiative (AFRI) would receive a substantial increase from $266 million to $383.4 million for competitive grants.  Priority areas for these competitive grants would include,

  • New food, agricultural, natural resources, and human sciences development for the food and agriculture-related workforce
  • Water resources research to develop solutions for water management ensuring security of our water sources, improving nutrient management in agricultural landscapes, and reducing the impacts of chemicals of emerging concern and environmental pathogens
  • In line with Mrs. Obama’s priority to address childhood obesity the budget proposes increasing funds for nutrition and obesity prevention research, education, and extension efforts that promote the consumption of healthy foods and further expand knowledge on the impacts of outside factors on childhood food choices and obesity
  • Proposes creating an integrated food safety research program that will continue to focus on minimizing antibiotic resistance transmission through the food chain and minimizing microbial food safety hazards of fresh and fresh-cut fruits and vegetables
  • A targeted program to strengthen the sustainability of biomass production, understand its effects on land and water resources, and expanding knowledge on the socioeconomic impacts of biofuels in rural communities in order to enhance sustainable rural economies
  • Ongoing research to develop strategies that help farmers manage and mitigate the impacts of climate change on agricultural and natural resource systems; and
  • The budget proposes a new Critical Agricultural Research and Extension (CARE) Competition as part of AFRI’s Foundational Research programs, addressing priority areas to continue building a foundation of knowledge in fundamental and applied food and agricultural sciences critical for solving current and future societal challenges

The National Institute of Food and Agriculture (NIFA) would receive $1.346 billion, an $115,000 increase in discretionary funding in the proposal, including, $26 million in funding for biomass research and development.  In addition, the President proposes including  $1.3 billion for  Agricultural Research Services (ARS), including $119 million to improve detection technologies for crops, crop production with emphasis on sustainability and reducing crop losses and recognizes the need for updating ARS research institutions in the field.

Formula funds for McIntire Stennis remained flat while Smith Lever and the Hatch Act were each cut by $2 million each.

Department of Commerce

The Department of Commerce would receive $8.6 billion, with an increase of $1 billion in mandatory funding for a manufacturing innovation institutes.  The  National Institute of Standards and Technology (NIST) laboratories would receive  $754 million under this proposal.  The budget proposal also includes additional funding for the National Oceanic and Atmospheric Administration for ocean and coast science and stewardship,  including funding for detection and forecasting global and ecosystem scale changes.

Department of Transportation

The Department of Transportation received a 5.5% increase in the budget proposal.  Despite the $76.6 billion budget in FY 2014, the proposal for FAA RE&D NextGen Environmental Research is reduced from $24 million to $19 million.   Of note to WSU is this account funds the potential FAA COE funding for which WSU is competing. The President’s budget includes $1 billion for the Next Generation Air Transportation System to modernize air traffic control practices.  In addition, the budget highlights the critical need for increased funding around surface transportation and reinvests Department of Defense funding into the Department of Transportation for this purpose.

Department of Defense

Despite the fiscal environment, the Department of Defense took only a proposed $3.9 billion cut, mapping out to a 0 .7% decrease over FY 13 levels. Research and Development did all right in this as the budget proposes  $67.5 billion for R&D, including $12 billion dollars for early-stage science and technology in applied research, advanced technology development.

Department of Energy

The Department of Energy receives an 8% increase in the President’s proposal. The $28.4 billion dollar budget would include $5.152 billion for the Office of Science (OSC).  OSC is the largest federal funder for competitive projects in  basic research in physical sciences.

  • Advanced Scientific Computing Research ($465.6 million)
  • Basic Energy Sciences ($1.862.4 million)
  • Biological and Environmental Research ($625.3 million)
  • Fusion Energy Sciences ($458.3 million)
  • High Energy Physics ($776.5 million)
  • Nuclear Physics ($569.9 million)

Within the Office of Energy Efficiency and Renewable Energy the President is proposing  $2.78 billion for clean technology R&D through shifting its focus to three sectors, sustainable transportation, energy saving homes, building and manufacturing and renewable electricity generation.

  • Sustainable Transportation – $957 million
    • Vehicle Technologies – $575 million
    • Bioenergy Technologies – $282 million
    • Hydrogen and Fuel Cell Technologies – $100 million
  • Energy Efficiency – $949 million
    • Advanced Manufacturing – $365 million
    • Building Technologies – $300 million
    • Federal Energy Management Program – $36 million
    • Weatherization and Intergovernmental Activities – $248 million
  • Renewable Electricity  – $615 million
    • Solar Energy – $356.5 million
    • Wind Energy – $144 million
    • Geothermal Technologies – $60 million
    • Water Power – $55 million

EERE is also setting aside $110 million for “Off-Roadmap” Incubators.  The goal of this initiative is to provide funding for up to 100 programs around emerging technology that may not fall within the three priority sectors.

These numbers are in no way final as the proposal is just that – a proposal.    We will be looking into the new programs and funding levels in more depth as the FY 2014 process moves forward.  Revenue increases are a non-starter in the House despite the President’s attempt to curtail entitlement spending and the Senate, which is more aligned with the President’s proposal, is already down the path with their budget.  In fact, Senator Patty Murray and Congressman Paul Ryan respective Chairs of the House and Senate Budget Committees are in negotiations on proceeding with the conference between the two bodies on the Budget Resolution.   That agreement will, if they are successful in reaching one, will set the parameters for future spending for reauthorization of the Farm Bill and the Transportation/Infrastructure bill that expires September 30th and provide normal order for the appropriations process for the first time in four years.

Moving forward, the President has begun laying the groundwork for include his budget number sin the process. Last night, President Obama held a dinner at the White House with 12 Republican Senators to discuss his legislative agenda, including  the  budget.  We expect much of the conversations will be around entitlement and revenue, as Republicans do not want to raise taxes.

We will continue to keep you updated and provide additional details on the budget.