FY 2019 final budget from Congress: Defense, Labor, HHS

SSTI is publishing a series of FY 2019 budget updates to match Congress’s unusually early action. 

• Minibus II: Defense and Labor and Health and Human Services
• Minibus I: Energy and Water (including Regional Agencies), Legislative Branch, and Military Construction and Veterans Affairs
• Budget Context
• Next Steps

Defense R&D funding sees strong increase

The FY 2019 budget provides an 8 percent increase in the overall Defense R&D budget to $95 billion, with an additional $2.4 billion roughly split between health and terrorism R&D. The Air Force (10 percent) and defense-wide (8 percent) budgets increased the most, while the Army (4 percent) and Navy (3 percent) saw more modest percentage increases. Within agency-wide R&D, the Rapid Innovation Program again received $250 million, while the Defense Innovation Unit Experimental (DIUX) increased by a quarter to $29.4 million.

Labor budget experiences cuts

Department of Labor programs to support workforce initiatives are the one tech-based economic development area to experience cuts so far. The overall Employment and Training Administration budget is down about 1 percent, but programs to support dislocated workers are decreased by 17 percent. The office supporting veteran employment is also decreased by 15 percent.

The one workforce initiative to see increases is apprenticeship grants, which increased by 10 percent to $160 million.

Also within the department, the Bureau of Labor Statistics is being cut by 10 percent to $550 million for FY 2019.

NIH, HHS experience significant R&D funding gains

Drawing from the same portion of the budget as the Department of Labor, the Department of Health and Human Services saw substantial increases to R&D. NIH alone increases by $2 billion to $39.1 billion in funding for FY 2019. Most individual institutes are set to experience increases of 3-5 percent. The National Institute of Aging continued a streak of year-over-year gains of more than 20 percent, as the institute’s budget has grown from $1.2 billion to $3.1 billion in five years. Funding is also marked to increase brain research by $29 million and cancer “moonshot” research by $100 million.

Congress grows Energy science programs

The first section of the FY 2019 budget to pass included funding for energy and water, the legislature, military construction and veterans’ affairs. While the year-over-year growth was not as strong for most initiatives as from FY 2017 into FY 2018, the average gain within the Department of Energy was about three percent.

ARPA-E, which has been a target for elimination by the administration, received a nearly $13 million increase to $366 million in FY 2019. Structurally, the budget deal reshapes the former Electricity Delivery & Energy Reliability office into accounts focused separately on energy security and deliverability. The greatest increase in the department is the Reactor Concepts R&D program within the Nuclear Energy office. This activity has more than doubled over two years, from $132 million in FY 2017 to $324 million in FY 2019. The Science office budget is also experiencing strong growth in FY 2019, with an increase of $325 million to $6.6 billion. Advanced scientific computing is seeing the plurality of this increase, growing by $130 million, a number of activities are seeing modest gains.

Regional Agencies

The first section of the FY 2019 budget to pass largely maintained funding for Regional Agencies. The Appalachian Regional Commission’s budget is increasing to $165 million in FY 2019, with the entire $10 million increase assigned to basic infrastructure needs. The POWER Plus program will continue to see $50 million in funding. The Delta Regional Authority will receive $25 million for the fourth consecutive year.

Legislature

The budget’s instructions include steps to improve the quality of science and technology advice Congress receives from the Government Accountability Office (GAO) and the Congressional Research Service (CRS). The GAO is tasked with developing a plan to replace its existing Center for Science, Technology, and Engineering with a “more prominent” unit. CRS is told to consider creating a separate unit for addressing Congress’s need for science-related information.

Budget Context

Part of the reason why the FY 2019 budget is moving through Congress relatively quickly this cycle is that Congress passed a two-year deal to increase its caps on discretionary spending before passing the FY 2018 budget. This reduced some of the negotiations around top-line spending that has consumed months in previous years. The deal’s smaller cap increase for FY 2019 also helps to explain why many programs are seeing smaller increases in FY 2019 than in FY 2018. This budget deal does not extend to FY 2020, and without a new Congressional budget deal, the FY 2020 budget could be reduced by as much as $55 billion for non-defense discretionary spending, which includes most of the EDA, Energy, NASA, NIST, NSF and SBA budgets.

Next Steps

UPDATED 9/27/18: President Trump signed the first budget “minibus” and has been sent the second portion, which contains a continuing resolution (CR) for the rest of the budget through Dec. 7. This bill must be signed before Oct. 1 to avoid a partial government shutdown. A tweet from President Trump on the morning of Sept. 20 asked, “where is the money for Border Security and the WALL in this ridiculous Spending Bill,” but the House’s willingness to move the questioned bill forward lends weight to observers’ expectations that the bill will be signed on time.

For more information on the federal budget and innovation policy — including how to get engaged with SSTI’s work to promote TBED priorities — contact Jason Rittenberg (rittenberg@ssti.org | 614.901.1690) today.