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08/29/95

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University assesses how federal budget battle will affect research

STANFORD -- Stanford researchers and administrators are girding themselves for the final round of political jousting as the battle to balance the federal budget swings to the Senate in September.

Given the relatively strong show of support that university-based science received from the House of Representatives before it adjourned for its August recess, university officials are optimistic that the Senate, too, will make basic research a priority.

House appropriations bills for non-defense federal research and development total $31.5 billion, $1.7 billion (5.2 percent) less than the 1995 budget. But funding for basic research in these bills would increase by an estimated 1.6 percent over 1995 figures, for a total of $14 billion.

Funding for research might find itself in stiff competition with jobs and housing programs in the Senate chambers, where looser rules and the power to filibuster give members of the minority party a stronger voice than they had in the GOP-ruled House.

"Nobody knows the outcome of what this budget cycle will be until it's completed," said Charles Kruger, dean of research. "The House has taken the lead and we have yet to see much about what is going to happen in the Senate."

Kruger is worried about the far-reaching impact that proposed federal research cuts could have on educational institutions and scientific progress, but he remains optimistic about science funding for the upcoming academic year.

The dean of research underscored two points that he hopes will brighten the mood among research faculty who are discouraged by the magnitude of this year's federal budget balancing task.

"A number of faculty members who are fairly discouraged these days will say the research budget has already been reduced in Washington," Kruger said. "That's not the case. The research and development budget has been reduced over the last several years with the end of the Cold War, but most of the research and development budget cuts have been in development, and research budgets remain strong."

Kruger also emphasized that despite all the uncertainty that surrounds the most recent budget negotiations, Stanford already has received more than two-thirds of the awards for federal research contracts and grants that it expects to receive for 1995- 96.

"The thing that worries me the most is that Congress will adopt the simplistic approach of imposing some kind of arbitrary cap on indirect cost recovery," Kruger said. "That's the sort of thing that could hit immediately. Indirect costs are real costs of doing research and universities don't have money sitting around that they can substitute for a loss in that reimbursement."

So far, however, the prevailing signal that Kruger has picked up in Washington is that the Republican majority is strongly supportive of basic science (research that isn't targeted with commercial applications in mind). This signal, however, is tempered by a second message he has picked up: Republican budget cutters are determined to eliminate the federal deficit by the year 2002.

The House, under the leadership of Speaker Newt Gingrich, has passed 11 of 13 appropriations bills that fund discretionary programs for which specific amounts are allocated each year. The Senate, in contrast, has moved at a slower pace, and will take up the bulk of the appropriations bills in September.

Intense negotiations are expected to ensue after Labor Day, when the appropriations committees of both legislative chambers return to Washington and attempt to negotiate their differences for each of the 13 bills to meet the Oct. 1 deadline.

As heated as these negotiations are predicted to be, many analysts believe they will be only a warm-up to the expected fiery debates over huge cuts proposed for entitlement programs such as Medicare and Medicaid.

Cutbacks in those programs - which will supply 70 percent of the savings required to balance the budget by 2002 - must be settled by Sept. 22. But the authorizing committees responsible for making those cuts have yet to unveil the details of their plans.

Earlier this month, a group of university presidents representing California's research universities sent a letter to the leaders of Congress reminding them of the importance of academic medical centers.

In the letter, Stanford President Gerhard Casper, University of California President J.W. Peltason and University of Southern California President Steven B. Sample asked that Congress support the core missions of academic medical centers; protect teaching hospitals from Medicare reductions that are greater than the overall percentage reduction in the Medicare program; fix the current Medicare managed care formula that diverts graduate medical education funding away from the teaching hospitals that incur the costs for training; and make graduate medical education a shared responsibility of the private and public sector.

"Our hospitals have struggled to be competitive in this new world of health care delivery, involving downsizing major cost reductions, merging, creating networks, developing new teaching methods, identifying new ways to train primary care physicians outside hospitals," they wrote. "But because of their unique missions -- teaching, patient care, and research -- academic medical centers, even with major cost reduction efforts, still incur higher costs than do other hospitals. . . Without federal support, university-based graduate medical education will erode quickly."

University officials hope that such lobbying efforts will have similar successful results like their ongoing efforts to rally congressional support for basic science.

"We have made special efforts and gone beyond what we've done in the past to work in coalition with others and to make sure that Congress understands the importance of basic research. I think that has largely paid off," said Larry Horton, director of government and community relations at Stanford.

In the midst of deep cuts proposed for many agencies, Horton pointed out that the House approved a bill that would increase the budget of the National Institutes of Health (NIH) by 5.7 percent over its 1995 budget for a total of $11.9 billion.

"To have an increase [in the NIH budget] of that size is extraordinary and shows, I think, some of the priorities that have been given to science," Horton said.

About 45 percent of Stanford's federal research dollars (excluding federal funding for the Stanford Linear Accelerator Center) comes from the NIH. The House had originally targeted NIH for a 5 percent reduction. Whether the agency's projected increase can be sustained in the Senate, remains an open question.

Political pundits predict that the Labor-Health and Human Services bill, which allocates money to NIH in its current form, is headed toward a presidential veto. It eliminates several of Clinton's favorite projects such as Goals 2000, summer youth employment programs, and the Offices of the American Workplace in the Labor Department.

But even if the NIH budget were to be cut significantly, Horton said it is conceivable that NIH funding of Stanford projects would remain unharmed.

"Historically, in difficult times when reductions are made at different agencies, the program managers in Washington who are in charge of research budgets want to get the best performance for their dollars," said Horton. In the past, Horton said Stanford successfully has risen to the challenge when it comes to securing research contracts and grants during competitive times.

Some projects, however, are more vulnerable to a reordering of federal budget priorities because they can be nixed from the federal budget altogether.

Stanford officials breathed easier in July when the NASA-funded Gravity Probe B project narrowly escaped the House's budget ax. NASA contributes about $55 million a year to Stanford, an amount that makes up 19 percent of the university's annual federal research dollars. Most of the money goes to the Gravity Probe B project, which is designed to test Einstein's general theory of relativity.

Although Gravity Probe B had been entirely cut from some early versions of the House bills, it received full funding of $51.5 million for next year in the final House appropriations bill. Other NASA programs didn't fare so well. The House voted to slash NASA's budget by $640 million while providing $2.1 billion to keep the space station alive.

The Department of Defense (DOD) is third in line when it comes to the amount of money different federal agencies provide to Stanford for basic research. About 15 percent of the university's research contracts and grants are DOD-funded.

Under a bill approved by the House appropriations committee and scheduled to go before the full House in early September, funding for DOD research and development would increase by 3.7 percent over the agency's 1995 budget, to a total of $39.2 billion.

But because of a recissions bill passed in April to trim $1.5 billion from the 1995 budget, the actual DOD budget for research and development next year under the House Defense Appropriations bill is only a 1 percent increase above the 1995 level originally enacted by Congress.

The net increase under the House bill, though small, is significant because it would reverse the steady drop in funding for DOD's research and development budget that has occurred over the past several years.

The full Senate also is expected to vote on its defense appropriations bill in early September. Basic research, however, is expected to fare less well in the Senate chambers, where cutbacks for every major defense activity will be considered as part of an effort to shift resources to discretionary programs such as health, education and employment programs.

Another agency that emerged relatively unscathed from the House appropriations process is the National Science Foundation (NSF), which provides 11 percent of Stanford's federal research dollars for basic science.

House representatives voted to hold NSF funding to about the same level they received this year, bringing two years of double digit percentage gains for the agency to an end. The House bill would reduce the NSF budget by 0.8 percent, while research funding would be held flat.

"I do believe you see a real commitment on the part of the House Science Committee to hold science and engineering done in universities blameless during this period of government reduction," said chemistry Professor Richard Zare, who has been keeping close tabs on the budget battles in Washington. If the Senate follows the House's lead, Zare said, NSF will have "certainly fared better than many other agencies."

Robert Walker (D-Pa.), chairman of the House Science Committee, initially suggested that he wanted to eliminate NSF's social and behavioral science division, but reversed his opinion after an intensive letter writing campaign organized by the Consortium of Social Science Associations and the Coalition for National Science Funding.

Walker's pledge to protect basic science but to strip down or eliminate commercialization and technology programs was reflected in the appropriations bill for the Department of Energy (DOE).

Although the House actions call for a 7.2 percent decrease in overall DOE research and development funds for a total of $5.8 billion, the DOE's basic energy sciences office and high energy and nuclear physics research programs received modest increases over 1995 levels.

That's good news for the operators of the DOE-funded Stanford Linear Accelerator Center (SLAC), a national laboratory that draws scientists from all over the world with its 2-mile-long linear accelerator. But Senate action regarding DOE tells a different story.

In contrast to the House, the Senate recently approved two bills that call for a 4.1 percent $6.5 billion. The increase, however, is due mostly to a shift in defense funds from DOD to DOE's nuclear weapons work. Funding for DOE energy supply research and development would decline by 7 percent from 1995.

"That would result in some reductions out of SLAC," Horton said. "We are not sure by how much, but it's a matter of concern that we will try to rectify in Congress."

Though most of the money Stanford receives from the federal government funds science and engineering, the university receives some funding from the National Endowment for the Humanities (NEH) and the National Endowment for the Art (NEA) as well.

"There are a number of faculty and students who are concerned about funding for the arts and humanities," Horton said. "But the impact on Stanford is quite limited."

Although the House overwhelmingly rejected an amendment that would have shut down the humanities endowment this year, it approved a bill that would kill the NEA in two years and the NEH in three years. The bill also would slash the two agencies' budgets for next year by about 40 percent, with each agency set to receive $99.5 million for 1996.

In the end, university officials said their worst fears regarding science funding have not yet materialized. But they will have to wait until October, when the budget negotiations come to a close and President Clinton decides whether he will go along with Congress, before they can determine how university funding will be affected.

Despite the relatively strong standing that basic research has had until now, the fact that inflation is no longer factored into the budgeting process leaves campus administrators and researchers worried about the future, Horton said.

"If you look at the science budget, basic research is treated relatively well in the budget. . . . But the unpredictable factor of inflation going up could mean there will be significant cuts from what we have now," he said.

"Having said that," Horton added,"[Congress] didn't repeal the law of politics. Every year, they will revisit [the budgets of different agencies] in the annual appropriations cycle.

"What that means is that the research community must work hard every single year to focus its priorities and to make its views known to Congress and to the public."

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