UPDATED: Bush proposes more money for R&D

Editor's note: Story updated at 9 p.m. to include Bush's State of the Union message

President Bush announced several new initiatives in his State of the Union address tonight to stimulate research and development in major scientific areas and find new technologies to end the nation's dependence on oil.

He told Congress that he wanted to make permanent the research and development tax credit to encourage companies to develop new technologies. And he proposed doubling "the federal commitment to the most critical basic research programs in the physical sciences over the next 10 years. "

"This funding will support the work of America’s most creative minds as they explore promising areas such as nanotechnology, supercomputing and alternative energy sources," Bush said in remarks prepared for delivery.

More research in both the public and private sectors will ensure that America will "lead the world in opportunity and innovation for decades to come," Bush said.

The president said the United States must end its "addiction" to oil and the best way to do it is through technology.

Bush announced the Advanced Energy Initiative, a 22 percent increase in clean-energy research at the Energy Department, to push for new ways to power U.S. homes and automobiles.

"By applying the talent and technology of America, this country can dramatically improve our environment, move beyond a petroleum-based economy, and make our dependence on Middle Eastern oil a thing of the past," Bush said.

According to a policy analyst familiar with the president’s agenda who spoke before the speech, Bush will commit to a 10-year plan to double basic research funding at three agencies: the National Science Foundation, the National Institute of Standards and Technology and the Energy Department’s Office of Science. The aggregate increase for the three agencies will be about 7 percent annually. For fiscal 2007, that translates to about $910 million in additional funding for research and about $380 million for education programs.

The three-part program, called the American Competitiveness Initiative, focuses on R&D, education and workforce and immigration policies.

In addition to increasing federal funding for basic research, the initiative will make the Research and Experimentation Tax Credit permanent by allocating $4.6 billion.

The education plan includes improvements to Advanced Placement and International Baccalaureate high school programs and Math Now programs for elementary and middle school students.

The workforce component will reform immigration laws to attract and retain high-skilled workers.

Research association representatives say they are thrilled about the new focus on innovation, including federal support for fundamental research. IT observers say the president's agenda indicates a reversal in the government's current lackluster attitude toward IT research spending.

The speech comes on the heels of an influential report on the country’s declining competitiveness and new legislation aimed at reviving that competitiveness.

Last week, Sens. Pete Domenici (R-N.M.), Jeff Bingaman (D-N.M.), Lamar Alexander (R-Tenn.), Barbara Mikulski (D-Md.) and Craig Thomas (R-Wyo.) announced a package of three bills intended to help the country maintain its leading edge in science and technology.

The legislation implements recommendations from a recent National Academy of Sciences report titled "Rising above the Gathering Storm."

In the congressionally requested report, the NAS committee and its leader, Norman Augustine, former Lockheed Martin chairman and chief executive officer, expressed opinions on the country’s research programs and future U.S. prosperity.

Committee members said they are “deeply concerned that the scientific and technical building blocks of our economic leadership are eroding at a time when many other nations are gathering strength.”

The report calls for the government to increase federal funding in long-term basic research by 10 percent annually during the next seven years.

High-tech industry leaders and researchers have said the United States’ future requires higher funding levels than what the Bush administration has budgeted for science, engineering and advanced education.

Important provisions in the bill include research grants for early career scientists and engineers, new federal funds to upgrade research laboratories, and improved higher education and K-12 science and math education. To spur innovation in industry, the bill would double the Research and Development Tax Credit and create a tax credit to encourage employers to invest in employees' education.

Last month, Sens. John Ensign (R-Nev.) and Joe Lieberman (D-Conn.) also introduced legislation with the goal of sustaining the country's leadership in innovation, R&D and scientific training.

That bill is based on a report from the Council on Competitiveness called “Innovate America." The bill would establish a program that encourages federal agencies to allocate 3 percent of their R&D budgets to grants directed toward innovative, high-risk research. The bill also nearly doubles research funding for NSF by fiscal 2011. It would cement the Research and Experimentation Tax Credit with additional changes expanding eligibility to a greater number of firms.