The 111 th Congress continues to take a strong interest in the health of the U.S. research and development (R&D) enterprise and in providing sustained support for federal R&D activities. The United States 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. In May 2009, President Obama requested $147.620 billion for R&D in FY2010, a 0.4% increase over the enacted FY2009 R&D funding level of $147.065 billion (est.) (not including FY2009 R&D funding provided under the American Recovery and Reinvestment Act ( P.L. 111-5 )). According to the Obama Administration, preliminary allocations of R&D funding provided under P.L. 111-5 brings total FY2009 R&D funding to $165.400 billion. The President's proposed FY2010 R&D funding included 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 President Bush's American Competitiveness Initiative (ACI). President Obama would have achieved this objective largely through increased funding for the Department of Energy Office of Science and the National Science Foundation, and, to a lesser extent, the Department of Commerce National Institute of Standards and Technology's core laboratory research. More broadly, in a 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 tax credit ), however doing so likely would require a substantial increase in public and private investment. In 2007, total U.S. R&D expenditures were $368.1 billion, or approximately 2.7% of GDP. Based on 2007 figures, reaching President Obama's 3% goal would require a 12.5% real increase in national R&D funding. Increasing direct Federal R&D funding by 12.5% in FY2010 would have required an increase of more than $18 billion above President Obama's request. In addition, advocates for increased federal R&D funding—including President Obama's science advisor, John Holdren—have raised concerns about the potential negative effects 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 a variety of adverse effects of this boom-bust cycle, including interruptions and cancelations 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 adverse ramifications 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 the Obama Administration's omission of Congressionally directed spending from the FY2010 budget request and inconsistency among agencies in the reporting of R&D. Another complicating factor for FY2009 and FY2010 is the inclusion of funding for R&D, facilities, and equipment, and related activities in the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5 ). ARRA funds supplement funding provided to agencies in P.L. 110-329 and P.L. 111-8 . Some ARRA funding will be spent in FY2009 and the balance of these funds will be spent in subsequent years. For purposes of this report, unless otherwise noted, comparisons of FY2009 and FY2010 R&D funding do not incorporate funding provided under P.L. 111-5 . As a result of these and other 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. 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 FY2008 (actual), FY2009 (estimate), ARRA, and FY2010 (request) as reported by OMB. Under President Obama's FY2010 budget request, six federal agencies would have received 95.1% of total federal R&D funding: the Department of Defense (DOD), 54.0%; the Department of Health and Human Services (HHS) (primarily the National Institutes of Health (NIH)), 21.0%; the National Aeronautics and Space Administration (NASA), 7.7%; the Department of Energy (DOE), 7.3%; the National Science Foundation (NSF), 3.6%; and the 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, the Interior (DOI), and Transportation (DOT), and the Environmental Protection Agency (EPA). In total, these departments and agencies accounted for more than 98% of current and requested federal R&D funding. In his FY2010 budget request, President Obama stated his intention to double the federal investment in three basic-research agencies over a decade from their FY2006 levels: DOE's Office of Science (up 3.9% above the estimated FY2009 level), NSF (up 9.4%), and DOC's National Institute of Standards and Technology (NIST) laboratories and construction funds (up 1.2%). This effort essentially continued the American Competitiveness Initiative (ACI) initiated by President Bush to double physical sciences and engineering research in these agencies over ten years (FY2007-FY2016). In 2007, Congress authorized substantial R&D increases for these agencies under the America COMPETES Act ( P.L. 110-69 ), setting a more aggressive seven-year doubling course. The largest agency R&D increases in the President's FY2010 request were for NASA, $1.038 billion; the Department of Health and Human Services, $521 million (due primarily to a $436 million increase in R&D funding for NIH); and the National Science Foundation, $455 million. DOD R&D funding would have been reduced by $1.929 billion in FY2010, and USDA R&D funding would be cut by $149 million. Federal R&D funding can also be examined by the character of work (basic research, applied research, and development) it supports, and funding provided for facilities and acquisition of major R&D equipment (see Table 2 ). President Obama's FY2010 request included $30.884 billion for basic research, up $1.003 billion (3.4%) from FY2009; $28.139 billion for applied research, down $627 million (-2.2%); $84.054 billion for development, up $167 million (0.2%); and $4.543 billion for facilities and equipment, up $12 million (0.3%). 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 an estimated 59.0% of U.S. basic research in 2007), primarily because the private sector asserts it cannot capture an adequate return on long-term fundamental research investments. In contrast, industry funded only 15.9% of U.S. basic research in 2007. In FY2009, the Department of Health and Human Services (primarily HHS's National Institutes of Health (NIH)) accounts for more than half of all federal funding for basic research. In contrast to basic research, industry is the primary funder of applied research in the United States, accounting for an estimated 61.1% in 2007, while the federal government accounted for an estimated 31.3%. Among federal agencies, HHS is the largest funder of applied research, accounting for nearly half of all federally funded applied research in FY2009. Industry also provides the vast majority of funding for development, accounting for an estimated 83.2% in 2007, while the federal government provided an estimated 15.7%. DOD is the primary federal agency funder of development, accounting for 87.6% of total federal development funding in FY2009.