Between FY1998 and FY2007, the annual budget of the Department of Defense (DOD) Science and Technology (S&T) Program grew from $7.7 billion to $12.8 billion. In constant FY2009 dollars, the cumulative increase was $22.5 billion. The purpose of this report is to aid Congressional oversight of DOD's S&T program by analyzing this budget increase by department and agency, by budget activity, and by program element. Specifically, the report examines whether the budget increase benefitted all programs or focused on certain priority areas. In a period of higher budget deficits, as sustaining current levels of military spending becomes more of a fiscal challenge, and as the nation continues to position itself to engage effectively in a changing strategic environment, policymakers may scrutinize the allocation of S&T resources more closely. This report focuses on DOD's base Research, Development, Test, and Evaluation Program (RDT&E). As indicated by its name, this program funds activities that range from fundamental research in the basic sciences to the design, development, and testing of complex weapon systems ready for the field. The DOD divides this range of effort into seven budget activities, designated 6.1 through 6.7 (see Appendix). Activities 6.1 through 6.3 (basic research, applied research, and advanced technology development) constitute what is called the Science and Technology (S&T) program. Budget activities 6.4 and 6.5 focus on the development of specific new weapon systems or components (e.g., the Joint Strike Fighter or missile defense systems). Budget activity 6.6 provides management support, including support for test and evaluation facilities. Budget activity 6.7 supports system improvements in existing operational systems. The S&T program is often referred to as DOD's "seed corn" because it supports the development of a science and technology base upon which tomorrow's high performance military systems will be built. The payoff from S&T investments is rarely immediate. The value of the knowledge tends to be unpredictable and hard to measure. The operational capabilities that are developed take time to be incorporated into fielded systems. Nevertheless, adequate support for S&T activities is seen by many in Congress and the defense community as imperative to maintaining U.S. military capabilities and superiority. Figure 1 shows the DOD S&T budget from FY1962 (when the budget activity designations 6.1-6.7 were first being adopted) through FY2007. During the 1960s and early 1970s, budgets for S&T remained relatively flat in current dollars, with inflation eroding their real values in constant dollars. Beginning in the late 1970s and continuing through much of the 1980s, S&T budgets increased in both current and constant dollars. At the end of the 1980s and into the 1990s, the Cold War began to wind down, but budget deficits of the federal government continued to grow. Funding for S&T became more erratic before essentially leveling off in constant dollars. By the end of the 1990s, sustaining adequate support for S&T in a time of declining military spending became a particular concern. Congress initially sought to increase S&T funding by 2% per year after inflation, but achieved limited success toward this goal. During the 2000 election, the Bush presidential campaign advocated a general increase in military research and development as part of its proposal to increase military spending. As part of the 2001 Quadrennial Review, the DOD established a goal of stabilizing its base S&T funding at 3% of DOD's overall funding. Congress embraced this goal. Following the terrorist attacks of September 11, 2001, overall defense budgets began to rise quickly. Although not always achieving the 3% goal, S&T funding rose to historic levels, in both current and constant dollars. Figure 2 shows the role Congressional appropriations played in the general increase in S&T funding from FY1998 to FY2007. DOD began seeking increases to the S&T budget beginning in FY2002. However, Congress appropriated more than DOD requested throughout this time period. This report focuses on the growth in the base S&T budgets between FY1998 and FY2007. This period of time is interesting to policymakers for several reasons. It includes the transition in FY2000 to a period of significant and historic growth in the S&T budget. It includes a change in Administration, as well as the historic strategic transition from the post-Cold War era to the War-on-Terror era. Picking FY1998 as the baseline year is somewhat arbitrary, but because S&T funding for the three years prior to FY1998 was relatively stable, it would appear to represent a valid starting point. Also, declines in overall defense spending, beginning in FY1986, bottomed out in FY1998, representing the end of the post-Cold War draw-down. The period of analysis ends in FY2007, the latest budget year for which "actual" S&T funding data exist (see below). The analysis in this report is based on data from two primary DOD sources: the DOD R-1 document, and the RDT&E descriptive summaries of the departments and agencies. The R-1 is an annual budget document released by the DOD Comptroller that summarizes all the Program Elements (PEs) that make up the base Research, Development, Test, and Evaluation (RDT&E) program. Program Elements are the building blocks of DOD's budget. In the case of the base RDT&E program, each PE represents an aggregation of research activities in a particular area. These areas could be related to a discipline (e.g. materials science), or mission (e.g. electronic warfare), or subsystem (e.g. propulsion technologies). Every RDT&E dollar is associated with one, and only one, PE. The R-1 document lists all of these PEs, broken out by department and agency and by budget activity (6.1-6.7). In the FY2009 RDT&E budget request, there were 712 PEs, of which 157 were considered to be in the S&T program. The RDT&E descriptive summaries are released each year by the departments or agencies, usually a few days after the official release of the DOD budget. They provide a written description of each PE and include, among other information, goals and objectives and past and anticipated accomplishments. In many cases, a PE may be divided into one or more projects. This report does not examine projects below the PE level. The funding amounts identified in these documents are total obligational authority (TOA). TOA is a DOD financial measure. In any given budget request, TOA equals budget authority (BA), which is what Congress grants in its appropriations bills (i.e. the authority to incur legally binding obligations). It expresses the value of the direct program. If changes are made to appropriations granted by Congress, because of general reductions, rescissions, lapsing unobligated funds, transfers of unobligated funds, re-appropriations, etc., these changes are accounted for differently when modifying the TOA and budget authority figures for prior years. The R-1 and the RDT&E descriptive summaries list the current year's budget request, an estimated TOA for the immediate prior year (which may include rescissions proposed in the current year's budget), and the actual TOA for two years prior (by which time most modifications to the initial appropriation's Budget Authority will have been made). The analysis in this report used actual TOA for FY1998 through FY2007, as shown in the R-1 documents for FY2000 through FY2009. It includes all S&T PEs listed in the R-1 documents for those years. The TOA data were recorded in current dollars. These data were converted to constant FY2009 dollars using TOA deflators for RDT&E taken from the DOD's National Defense Budget Estimates for FY2009. Unless stated otherwise, from here on in this report, all data is given in FY2009 dollars. The basic analysis compared the cumulative actual funding, from FY1998 through FY2007, in constant FY2009 dollars with what the cumulative funding would have been if the FY1998 amount had risen only with inflation. This comparison was done by department and agency, by budget activity, and by individual PE. The comparisons were calculated both in dollars and as percentages. Percentage changes take into account the size of the program. Changes in low cost programs, when measured in absolute dollars, may conceal the relative importance of the change as might be revealed when looking at the change in terms of percentages. On the other hand, initial changes in low cost programs could lead to relatively large percentage changes at first, and perhaps overstate the importance of those changes. The analysis takes this issue into consideration. The methodology used in this analysis has a couple limitations. One problem is how to account for PEs that were initiated after FY1998. In these cases, the FY1998 baseline funding is zero. That does not present a problem when analyzing in terms of dollars, but it makes the percentage comparison meaningless. One could use the first year the PE was established to determine a truncated baseline for calculating the percentage increase or decrease. This, however, would not allow for a direct comparison with PEs that were in existence in FY1998. Therefore, the analysis of percentage changes in individual PEs is restricted to PEs that were in existence in FY1998 and does not include PEs established after that time. Another limitation is that some PEs were reorganized during the course of the 10 year period. In some cases, PEs were terminated and their projects distributed to new or existing PEs. While it is possible in some of these cases to analyze the data for these PEs in the aggregate, in other cases it is difficult to compare the new PEs to the old PEs.