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[Congressional Record Volume 141, Number 90 (Monday, June 5, 1995)]
[Senate]
[Pages S7654-S7656]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

               CUTS IN CIVILIAN RESEARCH AND DEVELOPMENT

  Mr. BINGAMAN. Mr. President, 2 weeks ago the Senate passed a budget 
resolution designed to eliminate the Federal deficit over the next 7 
years. The House passed its version of that budget the week before.
  While there are some major differences in those budgets, particularly 
on tax cuts and defense spending and domestic discretionary spending, 
there is one common feature, and that is a proposed drastic cut in 
Federal support for civilian research and development. That is across 
Government.
  There has been very little attention paid to this part of the budget 
balancing effort so far. The public attention has been concentrated on 
Medicare, Medicaid, education, and tax cuts for the wealthy. But this 
issue, these drastic cuts in Federal support for civilian research and 
development, may be the place where the Republican budgets that have 
been passed through the two Houses will do the most damage to our 
Nation's future well-being and prosperity.
  Overall, civilian research and development spending will be cut 30 to 
40 percent by the year 2002 to a four-decade low as a percentage of our 
economy. Some agencies, such as the National Science Foundation, 
perhaps the National Institutes of Health, may be cut only at the 
inflation rate during the next 7 years, but all others--that is, NASA, 
the Department of Energy, the Department of Commerce, EPA--all appear 
to be slated for much deeper reductions.
  For those who are not familiar with the budget process here--I am 
sure there are some who are watching who may not be--let me explain why 
we cannot be more specific about the effect of these budgets at this 
point. The budget resolutions that are still being considered in 
conference make many assumptions about Federal programs. The only 
binding assumption which came out of what we did here in the Senate and 
in the House is the assumption that affects civilian-applied research 
with regard to the domestic discretionary spending cap. In fiscal year 
1995, this current year, that cap is $257 billion for total domestic 
discretionary spending. Under the Senate version of the budget in 2002, 
it will be $234 billion, or a 10-percent reduction. That is a 10-
percent reduction coupled with 7 years of no inflationary adjustment. 
Under the House version, the domestic discretionary spending total in 
2002 is even lower. In the House version, it will be $229 billion.
  If civilian research is treated on average like all other programs in 
this larger category, this domestic discretionary spending category, 
which I would assume is really the best case that we could hope for, if 
that were to be the case, then that research and development funding 
would be cut 30 percent in real terms. If other programs, such as 
highway funding, law enforcement, and veterans programs are protected 
from cuts when funding is finally allocated by the Appropriations 
Committees, the cuts in research and development could reach 40 percent 
in real terms.
  Mr. President, I am tempted to ask what the research community in 
this country has done or failed to do to deserve this type of treatment 
at this stage in our Nation's history. The research community won the 
cold war for us. They put men on the moon, they revolutionized 
medicine, they invented computers, they pioneered electronics and 
semiconductor devices. They invented a myriad of new materials that 
have fundamentally changed our lives.
  This is just as Vannevar Bush, who was one of the giants in the post-
World War II generation in science, predicted in his report, ``Science: 
The Endless Frontier,'' about half a century ago. Bush had the wisdom 
to know nearly 50 years ago that new scientific and technological 
fields would emerge that he could not yet imagine --semiconductor 
electronics, for example, or molecular biology and the material 
sciences, just to name three. Bush had the vision to see that Federal 
investments in science and technology could transform our lives and 
contribute to our health and the standard of living and the security of 
all Americans.
  Federal investment in civilian research and development did not cause 
the Federal deficit. In fact, it is quite the opposite.
  Mr. President, here is a chart that I want to direct my colleagues' 
attention to. It shows civilian research and development as a 
percentage of gross domestic product during the 40-year period from 
1961 through the year 2001 or 2002. In 1969, which is the last Federal 
budget that we had that was in balance, Federal civilian research 
spending was .76 percent of gross domestic product, about in this 
range. With the sole exception of the Bush administration, it has 
trended lower for the last quarter of a century. In 1995, it is 
estimated at about .46 percent of gross domestic product, the same as 
it was in 1992.
  In the year 2002, under this budget resolution that passed both the 
House and now a different one in the Senate, but the same in this 
regard, in the year 2002, it will be about .27 percent under these 
Republican budgets. That assumes the best case, as I mentioned earlier; 
that is, that research is treated on averages the same as other 
domestic discretionary programs.
  It is not just that our civilian research investments have not caused 
our current deficit. More importantly, there is almost universal 
recognition that these investments have paid for themselves many times 
over by the growth that they have contributed to our economy. It is not 
an accident that American industries, from aerospace to agriculture to 
electronics to pharmaceuticals, enjoy world leadership. Federal 
civilian research investments are truly investments in the Nation's 
future. Mr. President, in my view, it is folly to be cutting them to 
this extent over the next 7 years as we enter this new century.
  The cuts in Federal support for civilian research will almost surely 
not be made up in the private sector. The Wall Street Journal on May 22 
reported on deep cuts being made by AT&T, by General Electric, by IBM, 
Kodak, Texaco, and Xerox in their research budgets. The reason: 
Private-sector firms have an ever narrower focus and an ever greater 
unwillingness to invest in long-term research projects, the benefits of 
which are uncertain, and usually the benefits of which are not 
capturable by any single firm alone.
  The governments of our major economic rivals, Japan and Germany, 
recognize the importance of civilian research investments. Let me show 
you another chart, Mr. President. This chart compares the three 
countries in 1992. It shows that in 1992, the German Government 
invested .9 percent of gross domestic product that year in civilian 
research, over in the right. The Japanese Government invested .5 
percent, directly and indirectly. Neither [[Page S7655]] country shows 
any sign that it is joining us in planning to slash investment in 
research spending. It is quite the opposite. They and the other 
industrial countries around the world are seeking to emulate the 
successful American model of the last half century in science and 
technology, just as we seem bent on abandoning that model.
  Our research universities, our Federal laboratories, and our 
investments in small business research and innovation are the envy of 
the world. Under the Republican budgets, we risk losing a generation of 
research and of young researchers, since the best students will be 
diverted to other professions by the grim job prospects awaiting them 
in research careers.
  Mr. President, it is worthwhile to ask how we got ourselves into this 
fix, and how we can get out of it. That is something I believe will be 
discussed here in the coming months as we talk about these budgets.
  What we have seen over the last 2 years is the almost complete 
fracturing of bipartisan consensus which was forged during the Reagan 
and Bush administrations on the appropriate Federal role in civilian 
research and development. The consensus was that the Federal role 
should stop at precompetitive development activity, which should be 
conducted on a cost-shared basis, with industry putting up at least 
half the money. One test of the precompetitive nature of the research 
was whether some of our industry's intense rivals, such as Intel and 
Motorola, in the case of Sematech, which most of us are familiar with, 
could collaborate in a single effort. Everyone agreed that the Federal 
role should not include helping individual firms to get specific 
products to the commercial marketplace.
  Indeed, the very term, ``precompetitive development,'' was 
first coined by President Bush in a speech that he gave to the American 
Electronics Association in February of 1990. He was seeking to 
distinguish the technology policy that he was pursuing in his 
administration from the industrial policies of his predecessors in the 
1970's--for example, the Clinch River Breeder Reactor, supersonic 
transport, and the Synfuels Corporation.
  President Bush spoke proudly during the 1992 campaign of his efforts 
to expand civilian applied research through a series of new, high 
payoff investments in critical technologies:
  A high performance computing and communications initiative; an 
initiative to improve the manufacturing and performance of materials; 
an expanded program in biotechnology research; the establishment of the 
U.S. advanced battery consortium, which was to be funded for 4 years; a 
significant increase in our aeronautics research budgets; and the 
establishment of seven regional manufacturing technology centers for 
the distribution of modern manufacture of tools and know-how.
  This notion of what the appropriate role of the Federal Government in 
research is and is not was supported in numerous pieces of legislation 
passed since 1980 with bipartisan sponsorship and with the blessing of 
the Reagan and the Bush administrations. The vast majority of that 
legislation passed this body unanimously.
  Indeed, the American bipartisan consensus of 1992 on the appropriate 
role of Government in civilian research and development was 
incorporated in late 1993 into the Uruguay round subsidies code, and it 
is now the world norm that governments can fund the full cost of basic 
research, they can fund up to 75 percent of the cost of applied 
research that is relevant to industry and up to 50 percent of the cost 
of precompetitive development. They can do all of that without risking 
trade sanctions. Any development subsidies beyond that precompetitive 
stage are fully sanctionable, as they should be.
  Unfortunately, by late 1993, this bipartisan consensus that I have 
referred to had been fractured. As President Clinton and Vice President 
Gore pursued a science and technology policy almost identical to 
President Bush's and did so with real commitment, which I commend them 
for, our debate suddenly reverted to the sort of bumper sticker level 
which we had mistakenly thought was behind us. Charges of industrial 
policy, charges of picking winners and losers were affixed to a broad 
range of civilian research programs.
  By early this year, the bumper sticker pejorative had become 
corporate welfare. That is a phrase which, unfortunately, was 
popularized earlier this year when Secretary of Labor Bob Reich used it 
to refer to tax incentives, tax subsidies of various kinds.
  Republican leaders argued, mistakenly, that Federal support for 
research in areas from aeronautics to computers to health to energy to 
agriculture and the environment was somehow illegitimate, either 
because it was corporate welfare or it represented some type of 
industrial policy. It was merely seen as a duplication of private 
sector efforts.
  As David Sanger, who has reported on these issues for many years, 
pointed out in an article in the business section of the New York Times 
on May 23--this is a quote from his article:

       Such arguments underscore the sharp difference in the way 
     technology and trade policy is dealt with in Washington and 
     in the capitals of its major economic competitors, where 
     trade is considered national security and ``picking winners 
     and losers'' is a phrase with no political resonance.

  Mr. President, the overall budget prospects facing civilian research 
in this country in the years ahead demonstrate just how high a 
political resonance this issue seems to have taken on today, at least 
in some parts of the political spectrum.
  I do not believe this course we have charted for ourselves in these 
budget resolutions makes sense for the Nation, and as my colleagues 
know I led an effort during the debate on the budget to make spending 
on research, technology and related trade promotion and trade law 
enforcement programs a high priority in the allocation of funds for the 
next 7 years. The amendment would have put the Senate on record in 
favor of maintaining the overall fiscal year 1995 level for these 
programs. It would have conceded that there would be no inflationary 
adjustment during that period. But it would at least have tried to keep 
in place existing funding. It would have put the Senate on record 
against any net tax cuts unless we could first achieve that goal.
  The amendment did not seek to allocate funds within any of the 
various civilian research agencies. That would have been left, as it 
should be, to the authorizing and appropriating committees.
  By the year 2002, even under the amendment I offered, Federal 
civilian research and development investments would be at a four-decade 
low as a percentage either of Federal spending or of gross domestic 
product.
  Mr. President, this first chart I put up before makes that point very 
dramatically. It shows that we would have the lowest level of spending, 
the lowest percentage of spending of our gross domestic product on 
civilian research we have had in four decades.
  It would not have fixed the problem of sustaining our investments at 
the level that our economic competitors will be investing. Even if the 
amendment had been adopted, in 2002 we would still be spending slightly 
more than half of what the Japanese Government spends and about a third 
of what the German Government spends as a percentage of gross domestic 
product.
  Unfortunately, this very modest effort was defeated here on the 
Senate floor by a vote of 53 to 47, with all Republicans except Senator 
Jeffords voting in opposition and all Democrats voting in favor.
  I also supported a comprehensive fair-share budget, which was a 
substitute offered by my colleague, Senator Conrad, that would have 
balanced the budget while preserving funds for domestic discretionary 
programs. The fair-share budget provided $36 billion in additional 
discretionary funds in 2002 for research, education, and other 
priorities by limiting the growth of tax loopholes for wealthy 
corporations and individuals. That also failed on a 60-to-39 vote, 
largely along party lines.
  Almost a century ago, in 1899, the head of the Patent Office, Charles 
Duell, is purported to have proposed to close up shop at the Patent 
Office because, in his opinion, ``everything that can be invented has 
been invented.'' A half century later, Vannevar Bush laid out his 
starkly different vision for the Federal role in science and 
technology.
  Now, as we prepare to enter the 21st century, we face a choice 
between those two competing visions. Because I believe that the 
scientific and the technological frontier is still endless, just 
[[Page S7656]] as it was 50 years ago, and because I do not want to 
risk condemning our children and grandchildren to a less prosperous and 
less healthy and less secure future, I intend to continue fighting for 
Federal research investments even as we continue working toward a 
budget resolution.
  I hope we can restore the bipartisan support for these programs that 
was there until very recently, and I hope we can do so before serious 
damage is done to the programs. I am afraid this is going to take not 
just months but perhaps even years.
  Mr. President, I appreciate the chance to speak. I yield the floor, 
and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. DOLE. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  

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