The 112 th Congress continued to take a strong interest in the health of the U.S. research and development (R&D) enterprise and in providing support for federal R&D activities in the course of the FY2012 appropriations process. However, widespread concerns about the federal debt and recent and projected federal budget deficits drove difficult decisions involving prioritization of R&D within the context of the entire federal budget and among competing priorities within the federal R&D portfolio. The U.S. government supports a broad range of scientific and engineering research and development. Its purposes include addressing specific concerns such as national defense, health, safety, the environment, and energy security; advancing knowledge generally; developing the scientific and engineering workforce; and strengthening U.S. innovation and competitiveness in the global economy. Most of the R&D funded by the federal government is performed in support of the unique missions of the funding agencies. The federal government has played an important role in supporting R&D efforts that have led to scientific breakthroughs and new technologies, from jet aircraft and the Internet to communications satellites and defenses against disease. Congress plays a central role in defining the nation's R&D priorities as it makes decisions with respect to the size and distribution of aggregate, agency, and programmatic R&D funding. During the course of the FY2012 appropriations process, some Members of Congress expressed concerns about the level of federal R&D funding in light of the current federal fiscal condition, deficit, and debt. As Congress acted to complete the FY2012 appropriations process it faced two overarching issues: the extent to which the federal R&D investment can grow in the context of increased pressure on discretionary spending and how available funding will be prioritized and allocated. President Obama's proposed FY2012 budget, released on February 14, 2011, included $147.911 billion for R&D in FY2012, a 0.5% increase over the actual FY2010 R&D funding level of $147.139 billion. Adjusted for inflation, the President's FY2012 R&D request represented a decrease of 2.2% from the FY2010 level. This report provides government-wide, multi-agency, and individual agency analyses of the President's FY2012 request as it relates to R&D and related activities, and Congressional appropriations actions. Among its provisions, the President's proposed FY2012 R&D funding maintained an emphasis on increasing funding for the physical sciences and engineering, an effort consistent with the intent of the America COMPETES Act ( P.L. 110-69 ) and the America COMPETES Reauthorization Act of 2010 ( P.L. 111-358 ). These acts proposed to achieve this objective by authorizing increased funding for three agencies with a strong R&D emphasis in these disciplines: the Department of Energy Office of Science, the National Science Foundation, and the Department of Commerce National Institute of Standards and Technology's core laboratory research and R&D facilities construction funding. Appropriations provided to these agencies have, in aggregate, fallen short of the levels authorized in these acts. (See " Multiagency R&D Initiatives " for detailed information.) More broadly, in a 2009 speech before members of the National Academy of Sciences, President Obama put forth a goal of increasing the national investment in R&D to more than 3% of the U.S. gross domestic product (GDP). President Obama did not provide details on how this goal might be achieved (e.g., how much would be funded through increases in direct federal R&D funding or through indirect mechanisms such as the research and experimentation (R&E) tax credit ); however, doing so likely would have required a substantial increase in public and/or private investment. In addition, advocates for increased federal R&D funding—including President Obama's science advisor, John Holdren—raised concerns about the potential harm of a "boom-bust" approach to federal R&D funding (i.e., rapid growth in federal R&D funding followed by much slower growth, flat funding, or even decline). The biomedical research community experienced a variety of challenges resulting from such a circumstance following the five-year doubling of the NIH budget that was completed in FY2003. With the NIH doubling came a rapid expansion of the nation's biomedical research infrastructure (e.g., buildings, laboratories, equipment), as well as rapid growth in university faculty hiring, students pursuing biomedical degrees, and grant applications to NIH. After the doubling, however, the agency's budget fell each year in real terms from FY2004 to FY2009. Critics assert there have been a variety of damages from this boom-bust cycle, including interruptions and cancellations of promising research, declining share in the number of NIH grant proposals funded, decreased student interest in pursuing graduate studies, and reduced employment prospects for the large number of biomedical researchers with advanced degrees. According to then-NIH Director Elias Zerhouni, the damages have been particularly acute for early- and mid-career scientists seeking a first or second grant. Analysis of federal R&D funding is complicated by several factors, including inconsistency among agencies in the reporting of R&D. As a result of these factors, the R&D agency figures reported by the White House Office of Management and Budget (OMB) and White House Office of Science and Technology Policy (OSTP), and shown in Table 1 , may differ somewhat from the agency budget analyses that appear later in this report. Another factor complicating analysis of the President's FY2012 budget request was the proposal for a Wireless Innovation (WIN) Fund, a part of the Administration's Wireless Innovation and Infrastructure Initiative. Under the President's request, the WIN Fund was to receive $3 billion over seven years (FY2012-FY2018) from receipts generated through electromagnetic spectrum auctions. According to the President's request, the WIN funds were to support research, test beds, and applications development to support leading-edge wireless technologies and applications for public safety, Smart Grid, telemedicine, distance learning, and other broadband capabilities and to facilitate spectrum relocation. Under the President's budget, if the WIN Fund was established, several agencies would have received funding for these purposes, among them the Department of Defense, the Department of Energy, the Department of Commerce, and the National Science Foundation. Congress did not establish the WIN Fund for FY2012. Federal R&D funding can be analyzed from a variety of perspectives that provide unique insights. The authorization and appropriations process views federal R&D funding primarily from agency and program perspectives. Table 1 provides data on R&D by agency for FY2010 (actual), FY2011 (actual) and FY2012 (request) as reported by OMB. Under President Obama's FY2012 budget request, six federal agencies would have received 94.8% of total federal R&D funding: Department of Defense (DOD), 51.8%; Department of Health and Human Services (HHS) (primarily the National Institutes of Health, NIH), 21.9%; Department of Energy (DOE), 8.8%; National Aeronautics and Space Administration (NASA), 6.6%; National Science Foundation (NSF), 4.3%; and Department of Agriculture (USDA), 1.5%. This report provides an analysis of the R&D budget requests for these agencies, as well as for the Departments of Commerce (DOC), Homeland Security (DHS), the Interior (DOI), and Transportation (DOT), and the Environmental Protection Agency (EPA). In total, these agencies accounted for more than 98% of FY2010 federal R&D funding. The largest agency R&D increases in the President's FY2012 request were for DOE, $2.153 billion (19.9%); HHS, $919 million (2.9%, due entirely to a $1.019 billion increase in R&D funding for NIH); NSF, $875 million (16.1%); NASA, $559 million (6.0%); and DOC, $376 million (28.0%). Under President Obama's FY2012 budget request, DOD R&D funding would have been reduced by $3.969 billion (-4.9%), USDA R&D by $461 million (-17.7%), Department of Veterans Affairs R&D by $144 million (-12.4%), and EPA R&D by $11 million (-1.9%). Federal R&D funding can also be examined by the character of work it supports—basic research, applied research, and development—and funding provided for facilities and acquisition of major R&D equipment. (See Table 2 .) President Obama's FY2012 request included $32.895 billion for basic research, up $3.498 billion (11.9%) from FY2010; $33.182 billion for applied research, up $3.383 billion (11.4%); $79.414 billion for development, down $3.891 billion (-4.7%); and $2.420 billion for facilities and equipment, down $2.218 billion (-47.8%). It is important to note that with the projected completion of construction of the International Space Station (ISS) in FY2011, beginning in FY2012 NASA funding for operation of the facility was accounted for as research; previously, NASA ISS funding was accounted for as "facilities and equipment." Combining these perspectives, federal R&D funding can be viewed in terms of each agency's contribution to basic research, applied research, development, and facilities and equipment. (See Table 3 .) The federal government is the nation's largest supporter of basic research, funding 57.0% of U.S. basic research in 2008, primarily because the private sector asserts it cannot capture an adequate return on long-term fundamental research investments. In contrast, industry funded only 17.7% of U.S. basic research in 2008 (with state governments, universities, and other non-profit organizations funding the remaining 25.3%).