Federal R&D Funding, by Budget Function: Fiscal Years 2019–21
This report provides data on the budget authority conferred to U.S. federal agencies to fund the research and development and R&D plant components of their programs in FYs 2019–21. Budget authority is the primary source of legal authorization to enter into obligations that result in outlays. Budget authority is most commonly granted in the form of appropriations by the congressional committees assigned to determine the budget for each function. These technical notes cover the main features of the new R&D budget authority data documented in this report.
All activities covered by the federal budget, including R&D, are classified into 20 broad functional categories (see section Budget Functions and Classifying R&D). R&D activities currently are in 15 of the 20 categories.
The tables in this report provide R&D budget authority detail for FYs 2019–21 by agency and major programs for each of the categories in which R&D is present. Several concluding tables also show budget authority data for R&D in FY 2018 and earlier years.
The data for FY 2019 are the actual budget authorities received by federal agencies for R&D that year. These numbers update the preliminary data for FY 2019 published in the previous edition (FYs 2018–20) of this report series.
The data for FY 2020 are preliminary. Normally, these preliminary numbers are agency estimates based on final congressional appropriations for the fiscal year. In FY 2020, the federal government was initially funded through a series of two temporary continuing resolutions. Final funding resulted from a pair of consolidated spending bills passed in December 2019: the Consolidated Appropriations Act, 2020 (H.R. 1158) and the Further Consolidated Appropriations Act, 2020 (H.R. 1865). However, a series of supplemental appropriations bills was also passed, starting in March 2020, in response to the COVID-19 pandemic: the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 (H.R. 6074, 6 March 2020); the Families First Coronavirus Response Act (H.R. 6201, 18 March 2020); the Coronavirus Aid, Relief, and Economic Security Act (H.R. 748, 27 March 2020); and the Paycheck Protection Program and Health Care Enhancement Act (H.R. 266, 24 April 2020). In general, the agencies’ estimates of FY 2020 funding for R&D documented in this report reflect the enacted spending bills of December 2019, but not the subsequent supplementary appropriations bills (which arrived late in the already ongoing fiscal year). Notes accompanying the tables indicate the extent to which funding from these supplementary appropriations are recognized in the reported data.
The data for FY 2021 are the funding levels proposed by the president’s Budget of the United States Government, Fiscal Year 2021 (released 10 February 2020). At the time of this report, the funding levels for FY 2021 remain the subject of ongoing legislation by Congress.
The data throughout this report reflect agency documents and other Office of Management and Budget (OMB) data available through October 2020. Data reported here as “preliminary” or “proposed” will be revised in subsequent editions of this report series to reflect the eventual congressional appropriation actions and agency program funding decisions.
Research, Development, and R&D Plant
In this report, R&D refers to basic research, applied research, and experimental development activities in science and engineering.
Research and experimental development is creative and systematic work undertaken in order to increase the stock of knowledge—including knowledge of people, culture, and society—and to devise new applications using available knowledge.
R&D includes administrative expenses, such as the operating costs of research facilities and equipment and other overhead costs. It also includes funds for the purchase of minor equipment—such as personal computers, standard microscopes, and simple spectrometers.
Basic research is experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundations of phenomena and observable facts. Basic research may include activities with broad or general applications in mind, such as the study of how plant genomes change, but should exclude research directed toward a specific application or requirement, such as the optimization of the genome of a specific crop species.
Applied research is original investigation undertaken in order to acquire new knowledge. Applied research is, however, directed primarily toward a specific, practical aim or objective.
Experimental development is creative and systematic work, drawing on knowledge gained from research and practical experience, which is directed at producing new products or processes or improving existing products or processes. Like research, experimental development will result in gaining additional knowledge.
Experimental development activities include (1) the production of materials, devices, and systems or methods, including the design, construction, and testing of experimental prototypes; and (2) technology demonstrations, where a system or component is being demonstrated at scale for the first time and it is realistic to expect additional refinements to the design (feedback R&D) following the demonstration.
Before the publication of OMB’s revised guidance in Circular A-11 of July 2016, a more expansive definition of “development” was the basis for agency R&D reporting. The present guidance now identifies several specific exclusions. Experimental development does not include (1) user demonstrations, where the cost and benefits of a system are being validated for a specific use case (e.g., low-rate initial production activities); or (2) preproduction development, which is defined as nonexperimental work on a product or system before it goes into full production, including activities such as tooling and development of production facilities. For example, activities and programs that are categorized as “Operational Systems Development” in the Department of Defense’s Research, Development, Test, and Evaluation (RDT&E) budget activity structure are no longer included as R&D. Activities and programs of that type generally are now reported as investments in other major non-R&D equipment.
R&D plant includes facilities and major equipment necessary for the execution of an R&D program. It includes the purchase, construction, manufacture, rehabilitation, or major improvement of physical assets such as land, major fixed equipment, and supporting infrastructure like a sewer line or housing at a remote location. It also includes the acquisition, design, or production of major movable equipment, such as mass spectrometers, research vessels, DNA sequencers, and other movable major instruments for use in R&D activities.
The data in this report exclude (1) all non-R&D activities performed within budget functions that conduct R&D and (2) all functions in which no R&D is conducted. Table 6 is an exception, however; it continues to report RDT&E totals that previously would have been classified as R&D. In part, this table provides a gauge of the impact of the narrowed definition of development (as detailed above) on defense R&D totals.
Budget Functions and Classifying R&D
The federal budget total is the sum of funding across the 20 broad functional categories. These categories are National defense (function 050); International affairs (150); General science, space, and technology (250); Energy (270); Natural resources and environment (300); Agriculture (350); Commerce and housing credit (370); Transportation (400); Community and regional development (450); Education, training, employment, and social services (500); Health (550); Medicare (570); Income security (600); Social security (650); Veterans benefits and services (700); Administration of justice (750); General government (800); Net interest (900); Allowances (920); and Undistributed offsetting receipts (950).
R&D has never been reported in 4 of these 20 functions: Social security (650), Net interest (900), Allowances (920), and Undistributed offsetting receipts (950). As such, these categories are not present in this report’s data—except indirectly, where R&D is described as a proportion of total federal budget authority.
Small amounts of R&D had been reported in the General government (800) category up through FY 2002 but turned to zero thereafter. A small amount of R&D was again reported in FY 2012 but has been zero throughout the FY 2019–21 period covered in this report.
To better highlight R&D areas of high interest, the tables in this report split the General science, space, and technology (250) category into its two subfunctions: General science and basic research (251) and Space flight, research, and supporting activities (252).
Overall, this report’s tables separately cover 16 functional categories: 14 at the broad functional category level and 2 at the subcategory level.
Each R&D activity is assigned to only one functional category—which is consistent with the official codes used in budget documents, even though the R&D activity may address the objectives of several functions. For example, all R&D activities sponsored by the Department of Defense (except for those of the U.S. Army Corps of Engineers) are classified as National defense (050), even though some of these have secondary objectives, such as Space flight, research, and supporting activities (252) or Health (550). Nonetheless, an agency’s overall R&D effort can involve multiple activities spread across several functional categories, which means that a functional category can show the presence of several agencies.
Finally, not all federally sponsored basic research is categorized in the General science and basic research (251) subfunction. Some basic research is included in many of the other functional categories. Also, not all the R&D included in the General science and basic research (251) subfunction is basic research—some is applied research.
Technical table A-1 maps the mix of agency funding of R&D activities in FYs 2019–21 across the budget function categories.
The federal budget does not include a separately identified R&D account. Furthermore, most appropriations for R&D are not directly labeled as such (except in certain program areas, such as defense, energy, health, and environment). Thus, most funds for R&D are not line items in agency budget submissions but are included instead as part of general program funding.
To provide information on federal R&D funding, OMB requires all agencies with R&D funding levels greater than $10 million annually to submit data on their R&D programs as part of their annual budget submissions. Such agencies are requested to provide data on their funding levels for basic research, applied research, experimental development, R&D facilities, and capital equipment for R&D, in accordance with OMB’s Circular A-11, Section 84, “Character Classification (Schedule C)” at https://www.whitehouse.gov/wp-content/uploads/2018/06/s84.pdf.
The data in this report were collected from July through October 2020 and represent the agencies’ official estimates of actual and proposed federal funding for R&D over the FY 2019–21 period. The data are based primarily on information provided to OMB by 26 agencies, which account for about 99% of all federally sponsored R&D activities. (OMB has routinely tracked the R&D budget authority for these 26 agencies; other agencies with negligible levels of R&D budget authority are excluded.) The data reflect R&D funding information that became available from individual agencies after the administration’s FY 2021 budget proposal, Budget of the United States Government, Fiscal Year 2021, was prepared and transmitted to Congress on 10 February 2020. This information consists of budget justification documents that agencies submit to Congress and supplemental, program-specific information obtained from agency budget and program staff through October 2020. Accordingly, the budget numbers reported for individual activities, programs, or agencies may differ somewhat from those published in the president’s budget or in agency budget documents.
Acknowledgments and Suggested Citation
Mark Boroush of the National Center for Science and Engineering Statistics (NCSES) developed and oversaw preparation of this report, under the guidance of John Jankowski, NCSES Program Director, and leadership of Emilda B. Rivers, NCSES Director; Vipin Arora, NCSES Deputy Director; and John Finamore, NCSES Acting Chief Statistician.
Under NCSES contract with SRI International, Matthew Hourihan, Director of the R&D Budget and Policy Program for the American Association for the Advancement of Science, compiled the tables in this report. Publication processing support was provided by Catherine Corlies, Tanya Gore, and Joe Newman (NCSES).
NCSES thanks the program and budget offices at the federal agencies that provided information for this report.
National Center for Science and Engineering Statistics (NCSES). 2021. Federal R&D Funding, by Budget Function: Fiscal Years 2019–21. NSF 21-315. Alexandria, VA: National Science Foundation. Available at https://ncses.nsf.gov/pubs/nsf21315/.
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