Biden’s R&D Budget Proposals Look to the Future Not the Now, Experts Say

President Joe Biden’s fiscal year 2022 budget request is relatively light on mentions of specific, modern technologies but proposes $171.26 billion in federal research and development funding that would inherently promote the making of new, and improvement of existing, tech-based capabilities.

“Investments in [R&D] are necessary to help spur innovation across the economy and renew America’s global leadership,” the analytical perspectives document accompanying the Biden-Harris administration’s proposal reads. “R&D is also critical to tackling the climate crisis and driving the emerging technologies that will power future industries and create good-paying jobs across the nation.” 

Alongside the American Jobs and American Families plans, this call for a 9% increase would mark the nation’s biggest non-defense R&D spending boost on record, according to the administration. It comes amid ongoing cybersecurity incidents affecting the U.S. government, food and transportation sectors—and as the country works to eclipse competitors like China in various technological realms.  

“With the exception of [the Defense and Homeland Security departments], the proposed increases in R&D spending are significant,” Grant Thornton’s National Managing Principal, Public Policy Robert Shea told Nextgov Wednesday. Shea, who previously served for years as the associate director for the Office of Management and Budget, noted that if Congress appropriates the suggested 10% increase in basic research, it “would make an enormous impact on the nation’s scientific enterprise.”

Others echoed that sentiment.

“The intent to invest this kind of money into pure research and investment in science will take us far. Think about the man landing on the moon,” Radhika Krishnan, chief product officer of data storage company Hitachi Vantara, said. “We haven’t replicated that.” 

A Forward-Looking Request

Since taking office, Biden and members of his closest governing circle have expressed aims to increase America’s reliance on science and evidence-based policymaking. Considering that, Shea said the boost to R&D “across the board, but especially in basic research, is no surprise.” And at the same time, cuts to such efforts at DOD and DHS could mirror the overall prioritization seen in other aspects of the president’s budget.

“Increased competitiveness and focusing R&D on priorities like climate and pandemic preparedness reflect the differing priorities of this administration,” he explained. 

Experts generally agreed that the winners for research dollars in Biden’s first budget include agencies that are heavily involved in the government’s climate, equity and health initiatives.  

  “At the very top of Biden’s list of priorities appears to be climate change,” Chris Cornillie, a federal market analyst with Bloomberg Government, said. 

With intent to help U.S. sectors achieve a net-zero carbon economy by 2050, the White House requested billions in new climate-aligned research, including more than $10 billion in clean-energy innovation across non-defense agencies. 

The National Oceanic and Atmospheric Agency’s budget would jump to nearly $7 billion—much of which would be used for climate-related analysis and forecasting. NASA, the Interior Department and National Science Foundation, among others, would gain a collective $4 billion to fund a broad research portfolio “to improve understanding of the changing climate and inform adaptation and resilience measures,” according to the budget document. A total of $1 billion is requested to create a new Advanced Research Projects Agency for Climate, which would support research initiatives across several agencies to promote clean-energy pursuits, and investments in the existing Advanced Research Projects Agency-Energy would also grow.

Further, the “budget proposes historic increases in funding for foundational R&D across a range of scientific agencies,” the document reads. These investments spanning NSF, NASA, the Energy Department and the National Institutes of Standards and Technology would enable deeper exploration into space, “launch the next generation of satellites to study and improve life on Earth; and support upgrades to cutting-edge scientific user facilities at DOE national laboratories to build climate and clean energy research programs and train the next generation of scientists at [historically Black colleges and universities and minority-serving institutions.]”

“Great things happen when a variety of institutions come together,” Krishnan said.

Under Biden’s proposal, Energy’s R&D budget would see an 11% increase, totaling $21.5 billion. R&D spending at NSF and NASA would both grow by 10%, bringing the former up to $8.2 billion and the space agency to $14.6 billion in 2022. Among other R&D boosts of note are a 29% increase at Commerce and a 31% jump at Interior. The document confirmed these totals do not include increases proposed through the administration's American Jobs Plan. 

The fiscal 2022 plan also proposes moving the Health and Human Services Department’s R&D budget up 18% to $51.2 billion. Of that, $8.7 billion in funding would go to the Centers for Disease Control and Prevention to reinvigorate disease surveillance efforts and mark the largest budget authority increase in nearly two decades. The administration also seeks an investment of roughly $6.5 billion to form the Advanced Research Projects Agency for Health. The national hub would “provide significant increases in direct federal research and development spending in health,” according to the administration’s budget overview, placing an initial focus on cancer and other diseases such as diabetes and Alzheimer’s.

“The budget offers billions of dollars for [the National Institutes of Health] for medical moonshots and advanced therapies for cancer,” Cornillie noted. “This was an initiative Biden oversaw as President Obama’s vice president. It’s also a priority that matters to Biden personally, given how cancer has affected his own family.”

R&D inside the Veterans Affairs Department would also see a 5% increase—up to $1.5 billion. The amount includes $882 million for medical and prosthetic research, which aims to improve VA’s understanding of traumatic brain injury, the effects of toxic exposure on long-term health outcomes, and the needs of disabled veterans.

“At first glance, the biggest takeaway is that the Biden administration is trying to rebalance R&D spending in favor of civilian agencies,” Cornillie said. “Previous administrations had placed greater emphasis on Defense-led technology research initiatives.”

Broadly, the president proposes reducing the Pentagon’s R&D budget by 1%—to $62.8 billion—according to the analytical perspectives document. But Stephanie Kostro, a legislative affairs expert who serves the Professional Services Council’s executive vice president for policy, said she’s found that if investments around testing and evaluation are also considered in this context, the Pentagon could “see an increase overall” in its RDT&E.

“And I love seeing that, because what that means to me is not only are they thinking ahead—they’re not focused solely on procurement of existing systems, but really investing in the future,” Kostro said. “And I've seen that across the board, at least in this budget request. We'll see what happens when Congress takes their sharp pointy pencils out and starts getting it a little bit further into the details.” 

She added that the document’s specific breakdowns into basic, experimental and applied research funding are strong indicators of where the White House aims to focus—“and that is to prepare the U.S. for future needs and get ahead of the curve for change.”

“Massive advancements in science occur when you make that investment with an eye toward a long-term horizon, which makes sense at the government level,” Krishnan noted. “This level of investment will put the U.S. back in the leader seat.”

And the Biden-Harris administration isn’t being shy about intentionally embracing a renewed focus on research and driving transformational science-centered breakthroughs.  

“This is a very important and forward-looking budget,” Council of Economic Advisers Chair Cecilia Rouse said on a call with reporters ahead of the budget’s release. “The policies proposed are premised on the idea that to move forward as a country we need to invest in innovation, and the public sector is critical to building a robust and inclusive economy.”

Generally, officials agreed that the president’s calls to strengthen the nation’s R&D landscape are necessary and would be beneficial to America at-large. The “considerable” R&D push, represents a recognition from the administration that “the only way that you will bear fruit down the road is to make those kinds of investments today,” according to Splunk’s Senior Director of North American Government Affairs Bill Wright. 

To Hitachi Vantara’s Krishnan, the request comes as U.S. industries face “an inflection point with emerging technologies that can dramatically change the progress for growth of the country,” as a whole. 

“With [artificial intelligence] and data technologies, there is an opportunity to use data to enable the country to prosper and thrive, but also protect against threats. Insights derived from data can have dramatic implications for cybersecurity, the health of our citizens, and the strength of our financial industry as a few pressing examples,” she said. “The focus on R&D seems to be absolutely on the mark.”

Less and More

Unlike funding plans from the previous administration, Biden’s request rarely namechecks nascent capabilities like quantum information science, artificial intelligence, machine learning or advanced manufacturing.

The more than 1,000-page appendix published with Biden’s budget noted that NIST would see program increases for measurement research and services encompassing QIS, trustworthy AI, semiconductor metrology and more. The Energy Department would also see support for ongoing investments in priority areas like microelectronics, QIS, AI and ML and exascale computing, but aside from those callouts, explicit emerging technology nods are sparse. 

“I was surprised not to see more from the Biden administration on key strategic technology priorities like AI, quantum computing, and 5G. Last year the former [U.S.] Chief Technology Officer Michael Kratsios threw down the gauntlet, calling for a doubling of AI and quantum computing spending over two years,” Cornillie said. “Biden’s fiscal 2022 budget, unfortunately, is short on specifics and it’s hard to know where we stand.”

He said earmarks about specific tech could offer those outside the federal government a benchmark to understand how the administration is allocating investments among competing priorities. They might also give Congress better oversight of how funding is being spent. “The challenge,” Cornillie said, “is funding requirements that specify how much agencies can spend on what technologies at what stage of the R&D lifecycle—‘color of money’ requirements—often constrain agencies from allocating funding efficiently.” Such mandates could create perverse incentives to overspend in some areas or prevent certain projects from advancing through the pipeline when they’re ready. 

“Congress has offered agencies some flexibility from color of money requirements when it comes to software development projects, and it would be interesting to see what they could do for R&D and prototyping,” he noted.

To Krishnan, it’s not about any one technology anymore, because so many capabilities have become highly interrelated. She said the current infrastructure of storage and computing, for instance, needs to be able to support new overlapping technology innovations. 

“I don’t see a silo approach or take the proposal as a literal interpretation that says this investment only addresses one type of technology. The full technology stack needs to get revved up to build on that construct,” Krishnan noted. “It’s indicative of the direction that we’re headed in the technology industry.”

Grant Thronton’s Shea said letting the scientists determine how best to allocate R&D investments aligns with the administration’s broader science- and evidence-based outlook. “I bet quantum computing remains a priority in that case,” he said, “but practitioners not policymakers would have made that decision and it could therefore contribute to a restoration of trust in our nation’s scientists.” 

When considered alongside the president’s jobs and infrastructure plans, investments into new technologies and capabilities are there, even if they aren’t as clear-cut as budgets before. “I definitely can see that it's nothing like the last administration's focus around ‘industries of the future’—it's a non-equivalent to that,” Wright noted. “Those were more policy proposals—this truly is a budget.”

At the data platform Splunk, Wright’s work hones in on Congress and the federal government. His career spanned the private sector, Office of the Director of National Intelligence and the U.S. Senate. If there’s one truism in Washington D.C., it’s that technological innovation will always move faster than policy, he said. 

“I think they give a nod to some promising technology types—AI, 5G, etc. But they also seem to maybe have learned that to be too specific about future innovation can be a folly. So, research discoveries could take us into different technology investments, geopolitical circumstances, of course, can drive future investments. Researchers, I think, need to have the freedom to fail fast and change direction,” he said. “So in this case, I like to think that keeping things broad, or not overly prescriptive, is by design and could potentially lead to greater innovation. As you can see, I'm a bit of an optimist, but the way I read it, I think it's a smart way to write it, frankly.”

PSC’s Kostro “grew up professionally at the Pentagon” between 1998 to 2005 and also spent time on the Hill. “I'm a little bit surprised that they didn't include more detail,” she noted. Since the budget’s release Kostro has spent many hours unpacking what the R&D increases would mean for various federal stakeholders—in chats with agency insiders—since it didn’t seem so obvious in the documents.

“What I'm finding is that it's less of a focus on the bright, shiny technology of now. But more about investing in people and processes, and being agile going forward,” she said. “So that, right now, you can't predict what the best technology will be three years from now, but you can set yourself up for success in trying to get there and having a variety of different avenues to get to that best capability going forward.” 

She added it’s imperative to remember that there is a wide range of R&D funding, including for basic research, applied research, prototyping, and tests and evaluation. 

“What I am seeing is that there has been a little bit more flexibility—or agility, I think is the better word—agility provided to the departments and agencies regarding how they want to move forward in the broad construct of R&D. And it does for me come down to, you know, it's not so much about the buzzwords—those capabilities will still be necessary. I mean, quantum didn't go away, AI certainly didn't go away,” she said. “But how we're talking about it is changing. It's becoming a little bit more agile, and a little bit more responsive to the private sector.”

That Commitment to Science

During his first formal press briefing as president, Biden articulated ambitious, innovation-driving aims.

“Back in the '60s, we used to invest a little over 2% of our entire [gross domestic product] in pure research and investments in science. Today, it's 0.7%. I am going to change that. We are going to change that,” he said. “What I'm going to do is make sure we invest closer to 2%."

Wright believes such an investment is necessary to match America’s main competitors and adversaries. Some of the biggest breakthroughs of the next century will come from American industry, he thinks, but R&D funding would also enable partnerships and incentives for both sectors to achieve big together. Wright tried to calculate how close this budget moves the U.S. to meet Biden’s 2% promise.

“But I am a liberal arts major and I fell short,” he said. “What I can say is I definitely think this budget moves us closer. And if it's not literally 2%, it certainly sort of figuratively is pushing us there. It shows the emphasis on a forward-looking budget with this R&D.”

In Krishnan’s view, technology and science are not areas where America is out-competed by countries like China. While 2% of GDP seems like a lot, “it’s probably where it should be and is the right approach,” she said.

Kostro reflected on the roots of Biden’s call. 

“I think 2% may have arisen—and I don't know this for a fact—but our NATO obligation is to have 2% towards the national defense and our NATO allies are supposed to do 2% of their GDP for the national defense. And so 2% has been around since 1949, when NATO was established, as a goal,” she said. “I don't know that there's a lot of research and analysis behind 2%.” 

Still, she added, it demonstrates to her that the administration “is really committed to preparing the U.S. for the future.”

Like a Monet 

The path ahead to solidifying the fiscal 2022 budget is long, but there are an array of elements the experts are keeping an eye on along the way. 

“I’m watching closely developments on the Hill around the National Science Foundation. Bipartisan efforts are underway to significantly expand the contributions of NSF to the nation’s competitiveness,” Shea said. “Those efforts include the creation of a national secure data service, which could foster a new era of data sharing to unlock insights into the effectiveness of the government’s programs and activities.”

Bloomberg Government’s Cornillie said he’ll continue to monitor the rise in spending through other transaction agreements by DOD, DHS and HHS. 

“OTAs are designed to fast-track funding for R&D and prototyping engagements, especially with nontraditional government suppliers. Last year, government contracting through OTAs jumped to $17.8 billion, up from $7.9 billion the previous year. Although typically used for defense-related hardware and software, in fiscal 2020 billions in OTAs flowed to vaccine development and other technologies used to counter COVID-19,” he noted. “I’m interested to see whether OTAs become more normalized as an acquisition strategy and whether other federal agencies receive authorization to dip their toes into the OTA pool.”

As she keeps up her research, Kostro plans to speak with insiders at NASA about where the agency is moving, particularly in light of the growing private-sector innovation in that realm. “And now with the Space Force coming in under the Air Force as a military element, I think there's a huge emphasis on what we are doing in that space—no pun intended,” she said. The policy expert has spent a bit of time speaking to civil servants, who she noted are mostly “cautiously optimistic” that some of these initiatives can come to fruition. 

“It's a mixed bag, you know. They want to do the work—they see a lot of hope in this budget request. But they also know that this is just the opening salvo, right?” she said. “You have a process to go through to figure out what funding you're going to get for FY ‘22. And that still seems a really long way away to them.”

There will be a lot of convincing to do in Congress, Splunk’s Wright noted, but he said there’s likely enough interest to pave the way for notable spending as early as next year. The R&D spending is just one aspect of a much broader “modernization movement” that also includes Technology Modernization Fund increases and various cybersecurity dollars.

“It's all one big movement. When you take out ‘R&D’ [from the budget proposal conversation] maybe it doesn't all quite make sense,” he said. “But when you take it all in total—like a Monet—when you take a step back, it makes a lot more sense because it's all together."