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6 things you need to know about President Biden’s budget

June 03, 2021
By: Jason Rittenberg

The White House released President Joe Biden’s full budget proposal last week. As previewed in the “skinny” budget, the administration is supporting substantial increases for R&D, workforce and broadband. Support for federal programs that support entrepreneurship and the transformation of research, however, are more mixed. Within this context, here are the top things to know about the budget proposal that weren’t already covered in our reporting of the “skinny” budget.

1. Build to Scale would receive $45 million

The budget proposes $45 million for the Build to Scale program at EDA, an increase of $7 million over FY 2021. EDA as a whole would see $383 million (+ $77 million) in programmatic funding, including $84 million for assistance to coal communities (+ $50 million).

2. SBA’s innovation programs increased to $30 million

The budget preview proposed a combined $30 million for SBA’s Regional Innovation Clusters (RIC), FAST program, and the Growth Accelerators Fund Competition (GAFC). The full budget now reveals that these programs would each receive $10 million, which is an increase of $4 million for RIC, + $6 million for FAST, and an additional $8 million for GAFC. These programs have not seen substantial increases from Congress in years (or ever) and build on the $1 million increases for both Regional Innovation Clusters and FAST in FY 2021 after the Innovation Advocacy Council began advocating for the programs.

The budget also includes $20 million for SBA to expand its capacity to support SBIR/STTR, which is set to increase substantially through additional R&D funding (see below). These funds are intended to be used for administration, reporting and outreach.

3. R&D funding sees significant increases

Total federal R&D funding would increase significantly in FY 2022 under the budget proposal. The overall increase provides for expanded R&D funding across a variety of agencies, including:

  • $10.2 billion in total funding for NSF (+ $1.7 billion)
  • $7.4 billion for the Office of Science in the Department of Energy (+ $400 million)
  • $112 billion for R&D (and test and evaluation) for the Department of Defense (+ $4.5 billion)
  • $44.5 billion in total funding for NIH (+ $2.5 billion)

4. The administration is prioritizing climate change, health, manufacturing and equity

A few consistent themes appear in the president’s budget proposal: climate change, health, manufacturing and equity.

One way the emphasis on climate change is apparent is within R&D line items, including increased funding for ARPA-E ($500 million), the creation of a new ARPA-Climate (several hundred million across the departments of agriculture, commerce and energy), and a nearly one-quarter increase in the National Oceanic and Atmospheric Administration’s budget ($6.9 billion). The administration says these proposals are part of a 35 percent increase in clean energy innovation funding.

Concern for health funding is again apparent in increased R&D commitments. Beyond the NIH funding increase, mentioned above, the proposed budget would create a new, $6.5 billion ARPA-Health.

The budget’s support for manufacturing includes nearly doubling the NIST Manufacturing Extension Partnership to $275 million (from $150 million), funding for two new Manufacturing USA institutions ($150 million), and multiple new or expanded initiatives focused on supply chains.

Provisions to advance racial equity cover a wide range of agencies and approaches. These include new funding at the departments of education, energy and others for Minority-Serving Institutions, an emphasis within the $285 million (+ $100 million) in apprenticeship funding for underrepresented groups, and increasing the Minority Business Development Agency’s budget to $70 million (+ $22 million) while also promoting its director to the assistant secretary level.

5. Discretionary funding may be the best remaining source of federal funds after all

Both the White House and Congress have proposed significant new investments in R&D and innovation. However, the prospects for these proposals to yield actual appropriations is dimmer now than they were several weeks ago. In an attempt to garner bipartisan support for an infrastructure proposal, the White House recently offered to remove R&D and innovation funding from its infrastructure proposal to lower the package’s total cost. Meanwhile, Congress has proposed billions through the Endless Frontier Act, but the legislation is far more focused on authorizations than actual appropriations (the exception being $50 billion in actual appropriations for semiconductor research and incentives).

If these sources of funding do not materialize, then the discretionary budget, which is the majority of the funding in the president’s budget and the “regular” annual appropriations process, is the best opportunity to increase funding for science, tech, innovation and entrepreneurship.

6. The final budget is months away

This budget proposal arrives months after its February “deadline,” and while delays are particularly common in transition years, the delay will contribute to a late congressional budget process. The House and Senate appropriations subcommittees have already begun holding hearings with federal agencies but have been holding off on preparing their own budget proposals. This work is likely to begin in earnest in June, but more hearings, subcommittee and full committee markups and votes will take weeks to complete.

The delay in this year’s budget is not entirely the fault of the executive branch. Congress has not yet decided how much money it will spend in total, let alone how much each subcommittee will spend, and this is usually treated as a precursor to serious work on the budget. Other challenges for Congress to complete the budget quickly are the amounts of time required to consider large pieces of legislation, such as an infrastructure stimulus bill, and the looming debate over raising the debt ceiling.

All of this means that, as is usual, the FY 2022 budget will more likely pass sometime in the fall or winter than by the Sept. 30 deadline for FY 2021 funding.

federal budget