SSTI Digest

In the coming days, Congress will be acting on appropriations bills for the coming fiscal year. The consequences for science and technology are profound.

As a result, the Digest is departing from its usual format of summarizing the news to present opinions on the budget battle from: Allan Bromley, the presidential science adviser in the Bush Administration; John Podesta, President Clinton’s Chief of Staff; and, Representative James Sensenbrenner (R-WI), chair of the House

Science Committee.

Dr. Bromley’s article originally appeared in the Washington Post. Our thanks to them for permission to reprint it.

Due to the length of Mr. Podesta’s remarks, we have condensed the speech he originally made at the National Press Club. His full speech can be found on the White House’s home page at http://www.whitehouse.gov  

America is on a roll. We’re balancing the federal budget, reforming welfare and making retirement secure. Sound like a breakthrough in fiscal management? Not exactly. Our awesome economic success can be traced directly to our past investments in science. The problem is, this year’s federal budget for science is a disaster,

and it compromises our nation’s economic and social progress.

Here are the latest budget numbers: NASA science is slashed by $678 million; science at the Department of Energy is cut by $116 million; and the National Science Foundation ends up with $275 million less than the President requested. Clearly, Congress has lost sight of the critical role science plays in America.

....This morning, I'd like to explain why we believe that continued federal investments in research and development are so important, and why we're so troubled by the Republican attack on our science and technology budgets. We should all be working toward bipartisan progress -- not playing politics with an issue so fundamentally crucial to our nation's future.

Investments in science and technology -- both public and private – have driven economic growth and improvements in the quality of life in America for the last 200 years.

Many of the products and services we have come to depend on for our way of life in America -- from lasers to communications satellites to human insulin -- are all the products of US policies to encourage investments in science and technology....

I am encouraged by the Administration’s sudden interest in science funding. Over the last seven years, overall science budgets, which include both defense and civilian R&D, when indexed for inflation, have been flat or decreasing. Science needs a boost.

Unfortunately, the President’s Fiscal Year 2000 (FY2000) budget depends on budgetary tricks such as tax hikes and user fees that will never be enacted. In fact, the House of Representatives defeated the President’s FY2000 budget request by a vote of 426-2 and the Senate defeated it 97-2. This gimmickry significantly overstates the amount of money that can be made available for R&D.

Buoyed by a strong national economy, venture capital firms have invested at an all-time during the 2nd quarter of 1999, according to the latest quarterly survey by PricewaterhouseCoopers. At $7.61 billion for the quarter, venture capital investments were more than double the total reported only one year ago. The current survey reflects the investment activity of 684 venture capital firms.

Three of the last four surveys have revealed record levels of investment. The previous high, set in the first quarter of 1999, was $4.31 billion -- 41 percent over the earlier record of $3.77 billion set during the third quarter of 1998.

Last week, Indiana Governor Frank O'Bannon named the Board of Directors to oversee the design and administration of the new 21st Century Research & Technology Fund. By law, the Lieutenant Governor serves as chairman for the board.

Earlier this summer, the Indiana General Assembly approved a budget for the initiative of $50 million for the next two years for the initiative. This level of funding, coupled with the existing programs of the Indiana Business Modernization Technology Corp. (BMT), moves Indiana into the top tier of states investing in technology-based economic development.

The 21st Century Research and Technology Fund is to provide grants and loans that support economic development by addressing one or more of the following goals:

Small companies' interests in developing environmental technologies appear to growing. Between 1998 and 1999, the Environmental Protection Agency (EPA) saw a 64 percent increase in the number of SBIR Phase I proposals submitted. The number of awards made by the agency was unable to keep pace, growing by only 30 percent. As a result, EPA was able to fund less than 9 percent of the 535 SBIR Phase I proposals received in 1999. In 1998, more than 11 percent of the proposals were funded.

The accompanying table presents the distribution of EPA awards and proposals by state.

Abstracts of EPA awards for the 1999 SBIR Phase I solicitation have not been posted on their website currently but should be soon. The web address is: http://es.epa.gov/ncerqa/sbir/