NEWS OF THE WEEK
DEFICIT REDUCTION: R&D budget gains may be lost Federal R&D budgets for fiscal 1988 are in considerable peril in light of the hurried joint effort by Congress and the Administration to reduce the federal deficit in the wake of financial and other uncertainties triggered by the recent stock market plunge. At week's end, negotiators from the White House and Congress were m e e t i n g b e h i n d closed doors to agree on how to cut the 1988 deficit by at least $23 billion. If they fail to do so by Nov. 20, automatic cuts will take effect. A $23 billion cut represents a decrease of only 2% in t h e trillion-dollar budget. However, large segments of the budget have been exempted from cuts by either Congress or the Administration. And most federal R&D programs remain in the relatively small part of the total budget left vulnerable. When Congress reenacted the Deficit Reduction & Control Act of 1985 earlier this year, it exempted from across-the-board cuts 70% of the $778 billion federal budget for domestic programs. President Reagan then exercised his prerogatives and exempted 62% of the $290 billion defense budget from cuts. These exemptions, and some other provisions, leave only $108 billion in domestic programs and $109 billion in defense programs subject to the $23 billion in automatic reductions. R&D accounts for 23% of these domestic programs and 35% of the defense programs. The Office of Management & Budget's baseline for the automatic cuts is the federal government's 1987 budget adjusted upward about 4% to allow for inflation and mandatory federal pay increases. This was 4
November 2, 1987 C&EN
Chiles: avoidable
accident
the level set by Congress in the continuing resolution under which the federal g o v e r n m e n t is now being funded. The baseline does not take into account the sometimes substantially higher 1988 funding levels that have already been approved by the House or Senate. For example, according to a recent report released by Senate Budget Committee chairman Lawton Chiles (D.-Fla.), automatic cuts would leave the National Institutes of Health with $598 million less than the $6.9 billion funding level for 1988 approved by the Senate late last month. This would result in 3300 fewer research g r a n t s . Funding for acquired immune deficiency syndrome would be cut back from a proposed $470 million to $388 million. With the automatic cuts, funding for defense R&D would be about $34 billion, 23% less than the Ad-
ministration's budget request and about 8% less than the fiscal 1987 funding level. The National Science Foundation would be funded in 1988 at about $1.3 billion, about 5% down from 1987 levels, instead of advancing 16% to $1.6 billion. At the Department of Energy, fossil energy R&D funding would be cut back $26 million to $284 million, energy supply R&D $120 million to $1.3 billion, and general science and research $63 million to $675 million. Sequestration, as the automatic budget-cutting process is formally called, may be the easiest way to reduce the deficit by the mandated $23 billion. But as Chiles, one of Congress' designated negotiators, puts it, "Sequester means giving up the chance to make choices. When money is cut automatically, we lose the chance to decide how to safeguard key programs. Right now the clock has started running, and we're in the middle of a countdown to an avoidable accident." Agreement on such choices before the clock runs out may prove difficult. It took the precipitous Wall Street plunge to get Congress and the Administration to the negotiating table, even though both sides had known since September that cuts would be necessary. The crisis has led both sides to declare that no program, except Social Security, is exempt any longer from cuts, despite what is written in the deficitreduction law. President Reagan no longer absolutely rules out tax increases. Indeed, at press time the House was considering a bill that would raise about $12 billion in additional revenues, a good portion of which would come from business. D
