Federal Research and Development (R&D) Funding: FY2020

President Trump’s budget request for FY2020 included approximately $134.1 billion for research and development (R&D). Several FY2019 appropriations bills had not been enacted at the time the President’s FY2020 budget was prepared; therefore, the President’s budget included the FY2018 actual funding levels, 2019 annualized continuing resolution (CR) levels, and the FY2020 request levels. On February 15, 2019, Congress enacted the Consolidated Appropriations Act, 2019 (P.L. 116-6). This act included each of the remaining appropriations acts, completing the FY2019 appropriations process. The act also rendered the CR levels identified in the budget no longer relevant, though for some agencies the exact amount of R&D funding in the act remained uncertain. The analysis of government-wide R&D funding in this report compares the President’s request for FY2020 to the FY2018 level. In FY2018, OMB adopted a change to the definition of development, applying a more narrow treatment it describes as “experimental development.” This change was intended to harmonize the reporting of U.S. R&D funding data with the approach used by other nations. The new definition is used in this report. Under the new definition of R&D (applied to both FY2018 and FY2020 figures), President Trump requested approximately $134.1 billion for R&D for FY2020, a decrease of $1.7 billion (1.2%) from the FY2018 level. Adjusted for inflation, the President’s FY2020 R&D request represented a decrease of 5.1% below the FY2018 level. Funding for R&D is concentrated in a few departments and agencies. In FY2018, eight federal agencies received 96.3% of total federal R&D funding, with the Department of Defense (DOD, 38.6%) and the Department of Health and Human Services (HHS, 27.2%) combined accounting for nearly two-thirds of all federal R&D funding. The same eight agencies accounted for 97.2% of the FY2020 request, with DOD accounting for 44.3% and HHS for 25.1%. Under the President’s FY2020 budget request, most federal agencies would have seen their R&D funding decline. The primary exception was the Department of Defense. DOD’s requested R&D funding for FY2020 was $7.1 billion (13.5%) above the FY2018 level. The Departments of Transportation and Veterans Affairs would have seen small increases in R&D funding. Among the agencies with the largest proposed reductions in R&D funding in the FY2020 budget compared to the FY2018 actual levels were the Department of Energy ($2.8 billion, 15.8%), the National Science Foundation ($567 million, 9.0%), and National Aeronautics and Space Administration ($475 million, 4.0%). The President’s FY2020 budget request would have reduced funding for basic research by $1.5 billion (4.0%), applied research by $4.3 billion (10.5%), and facilities and equipment by $0.5 billion (12.8%), while increasing funding for development by $4.5 billion (8.3%). Budget supplements published after the President’s FY2020 budget was released provide additional details for certain multiagency R&D initiatives. The President requested $5.506 billion for the Networking and Information Technology Research and Development (NITRD) program for FY2020, a decrease of $195 million (3.4%) over the estimated FY2019 level. The President requested $1.469 billion for the National Nanotechnology Initiative for FY2020, a decrease of $103 million (6.6%) over the estimated FY2019 level. The FY2020 budget supplement for the U.S. Global Change Research Program has not yet been published. Some activities supporting these initiatives were discussed in agency budget justifications and are reported in the agency analyses in this report. The request represents the President’s R&D priorities. Congress may opt to agree with none, part, or all of the request, and it may express different priorities through the appropriations process. In recent years, Congress has completed the annual appropriations process after the start of the fiscal year. Completing the process after the start of the fiscal year and the accompanying use of continuing resolutions can affect agencies’ execution of their R&D budgets, including the delay or cancellation of planned R&D activities and the acquisition of R&D-related equipment. As of the date of this report, Congress has enacted all 12 regular appropriations bills for FY2020. These bills were incorporated in two acts: the Consolidated Appropriations Act, 2020 (P.L. 116-93) and the Further Consolidated Appropriations Act, 2020 (P.L. 116-94). Both of these acts were signed into law on December 20, 2019.