The passage of the much-discussed “Chips and Science Act” (CHIPS+) promises an injection of more than $50 billion to energize the U.S. semiconductor industry. This is a catalyzing moment. And yes, it represents an investment slightly larger than the Apollo Program, in real terms. 

The long list of new programs funded and authorized in CHIPS+ includes a flagship program of the National Science Foundation’s Technology Innovation and Partnerships Directorate (NSF TIP), the first new Directorate to be created at the NSF since the C+C Music Factory was topping the charts. The NSF Regional Innovation Engines Program (colloquially called NSF Engines), now officially authorized by Congress, joins a series of aggressive investments in regional cluster development programs at other agencies. These contemporary programs include the Economic Development Administration’s Build Back Better Regional Challenge and Good Jobs Challenge, which represent a combined $1.5 billion in appropriations. 

CHIPS+ also includes an additional authorization (if not funding) for the EDA’s work to develop regional innovation capacity across the country, including two major elements: a $10 billion regional tech hub program with outposts in every EDA region and a $1 billion tech hub development program intended “distressed communities” (originally included in the Recompete Act).  

These three new programs, NSF Engines, Tech Hubs and Recompete, plus existing programs like BBBRC and GJC, represent a massive proposed investment in building regional innovation clusters. Both legislation and the zeitgeist dictate that these investments will be distributed across the country, virtually guaranteeing geographic inclusion. But as regional innovation ecosystems and cluster development efforts become the dominant mode of economic development strategy, we would do well to consider the degree to which these efforts drive broad wealth creation, creating inclusive opportunity in our communities. 

But this bill’s least-discussed impact will likely be its most transformative. The CHIPS+ investment puts an exclamation point on an ongoing narrative–that the federal government has effectively declared cluster development to be the dominant way in which Washington thinks about supporting local economic development efforts. 

This mode of targeting the co-location and creation of like-minded firms in a close geographic area was pioneered by Michael Porter, the father of modern competitive strategy. These groups, or clusters, of companies in a particular industry, share critical infrastructure like equipment, space, and talent in ways that maximize regional efficiency and increase firm productivity.  “A cluster,” Porter said, “allows each member to benefit as if it had greater scale or as if it had joined with others without sacrificing its flexibility.” Building targeted, relevant, and world-class research and commercialization capacity at Universities was added as a prerequisite tenet over time. Modern cluster development theory–the economic development philosophy so central to CHIPS+–is the practice of engaging universities, government, corporations, capital providers, and entrepreneurs as stakeholders to create comparative local advantage in a global context by driving the development of a cluster of innovation-led companies. 

Cluster development, however, is not always executed in an inclusive and equitable way, and it’s easy to see why. Today, many communities approach cluster development as a conversation between R1 universities, corporate executives, top government staffers, and elite economic development leaders. While these approaches are effective in driving short-term resources and focus to support these efforts, they often omit the voices and views of communities that have been systemically left behind–those that they allude to as benefitting from the increased productivity, efficiency, job creation, wealth creation, and research activity that these efforts promote. For instance: the creation of “good jobs” (and especially “good jobs” in STEM fields) is an oft-measured outcome of cluster development efforts, but people who identify as Black and Hispanic make up just 9% and 8% of the employment in STEM fields, respectively. This is a stark outcome that lays bare the failure of traditional economic development efforts to engage diverse communities in the work of cluster development. This will not change unless time and resources are dedicated to starting conversations that are shrugged off today.

Conversely, when communities that have experienced disinvestment start new innovation and small business support efforts, they seldom turn to the institutions that have left their communities underserved for decades. It is more common for grassroots efforts to emerge, led by determined local leaders, as they did in Kansas City with the development of G.I.F.T., La Placita, the Prospect Business Association, The Prospect, and others (these represent just a few of many such efforts in Kansas City alone).  

This bottom-up approach has led to vibrant, innovative, and extremely well-networked small business ecosystems. In this context, trust (not funding) is the essential currency driving entrepreneurial ecosystems. Yet, trust-building is an inherently time-intensive, complex process that is seldom funded by government programs, philanthropy, or anyone else. 

So how might cluster building efforts more scalably and thoughtfully engage in the trust building activities that are required to make their work more inclusive and equitable? How might the institutions leading cluster development conversations invite engagement in the process of cluster selection, when the cluster in question seems inaccessible, and therefore irrelevant to large swaths of their communities? How can we integrate the systems that have been created to support small businesses and those that support innovation-driven enterprises in ways that emphasize their interdependence, as is characteristic of true ecosystems? These are the questions that our next generation of cluster development efforts must address. 

Today, as we begin to emerge from the COVID-19 pandemic, we can see the ways in which the impact has brought to light long-present inequities. For instance: only 8.6% of PPP loans were distributed to Black-owned businesses, but then again, Black-owned firms experienced persistent challenges in accessing capital relative to white-owned firms long before COVID, controlling for similar levels of creditworthiness. Yes, underserved communities were disproportionately impacted by the COVID-19 pandemic, but the systemic problems that these recent failures represent have been present for many years. 

Perhaps even more troubling is the fact that we continue to build for the future without considering the fact that great ideas come from everywhere and everyone. The proliferation of new technologies is often impacted by old systems–which means that critical infrastructure for building innovation ecosystems is widening. Today, 20% of disproportionately low-income, Black, Hispanic, and rural Americans lack access to broadband–this represents, essentially, digital redlining. Clearly, the challenge of achieving equitable innovation outcomes is both urgent and systemic, as our solutions must be.  

As we enter the age of cluster development and regional innovation ecosystem building, we can take comfort in knowing that geographic diversity has been designed as a condition of our investments. But to build a system in which innovation truly can come from anyone, anywhere will take trust-building. It will take time, care, and a willingness to engage unusual voices in coalition efforts. We will need to carefully consider how these efforts might have a more equitable impact than past movements to grow high-tech and deep-tech companies, in order to be successful. 

We have an opportunity to design this approach into these new regional innovation funding mechanisms, just as we designed in geographic diversity. Just as importantly, we have the opportunity to proactively answer these questions in communities across the country. With that in mind, this author offers a humble prediction–that our next generation of breakout innovation clusters will be those that engage their communities most inclusively, not just those that develop efficiently. 

Many aspects of the CHIPS And Science Act have gotten significant attention, but one potentially consequential section for U.S. science has been almost wholly overlooked: a requirement that the U.S. government establish a national science and technology strategy.

Strategy development is a well-established function for the White House Office of Science and Technology Policy (OSTP), but usually these strategies are focused on narrow topics like climate science or agricultural innovation. What’s new in CHIPS is the requirement for an overarching, top-to-bottom assessment and strategy covering all areas of S&T.

We’ll see how it plays out in practice, and whether it has the impact the bill’s authors intend. But in the best-case scenario, the new strategy could provide a bold vision to inform federal science investment.

What The Bill Requires

In reality, CHIPS requires not one, not two, but three different strategy documents from OSTP, in consultation with other federal agencies, White House councils, bodies like the National Science Board, and nongovernmental organizations including industry and universities.

CHIPS Section 10613 creates a quadrennial S&T review, which OSTP will have to deliver by the end of next year (and every four years thereafter – until 2032, when the requirement expires). The quadrennial review is intended to be a “comprehensive examination” of U.S. science, with input from a wide range of institutions inside and outside government. It will also make policy and investment recommendations in areas like industrial innovation, science for social challenges, the STEM workforce, tech transfer, regional innovation, and U.S. research leadership.

One year after the quadrennial assessment, CHIPS requires another more concrete policy strategy, with programmatic recommendations to achieve key goals and research priorities.

Lastly, the bill requires a periodic S&T supplement to support the annual National Defense Strategy. This third document will cover many of the same topics as the above, but with a national security and economic security frame. It will also deal with questions like startup barriers, research security, and federal program effectiveness.

This three-pronged approach – perhaps a bit overkill – reflects a blend of the visions of the Senate (which wanted the national security strategy) and House (which wanted the other two). 

Will These Matter?

There are a few reasons these strategies could be useful for the U.S. science enterprise. One simple reason is that they should provide useful context to inform agencies and Congress. How is the U.S. faring globally in science? What are the weaknesses, bottlenecks, and emerging trends? Which sectors are seeing threatened leadership? Working to answer these questions always provides important context for policymakers and can help drive national priorities. The National Center for Science and Engineering Statistics does provide some of this information now – and should certainly play a significant part in the broader reviews – but now these analyses should feature more prominently in the policy stream, with broader scope and perhaps greater visibility. 

The requirements also give government a strategic framework for making investment decisions, which is a device many of our global competitors employ. The White House Office of Management and Budget (OMB) is the key cog in the federal budget system, and will be at the table alongside other agencies and offices. OMB already works with OSTP to set R&D priorities in the annual budget process. The new strategy requirements don’t alter that process – which is rather fragmented and bottom-up – but they could provide a nudge for coordination and big-picture thinking on a whole-of-government basis. 

Interestingly, these strategies may also provide an avenue for systemic reform: the quadrennial review is required to evaluate “policies that hinder research and development in the United States.” This could provide an opening for experts to recommend policies to enhance research productivity or reduce administrative burden, for instance.

All that said, one should be wary of overstating the benefits. Whatever the quality of the new strategy, it will still be up to policymakers, agencies, and appropriators to follow it with action. In so doing, they’ll have to balance an array of competing needs, goals, and ideas from internal and external stakeholders. Buy-in shouldn’t be treated as a forgone conclusion.

The requirements also set up some strange timing. For example, the quadrennial review is due at the end of 2023, and the policy strategy at the end of 2024, a presidential election year. If there’s a change in the Oval Office, would a new administration disregard the work of the prior OSTP? What about in 2028 or 2032?

At the very least, the strategy exercise should provide a fascinating near-term experiment in U.S. science policymaking – and in the long run, could provide a tool for furthering U.S. leadership in science and technology.

Congressional negotiations over the massive bipartisan innovation bill have stumbled over a controversial proposal to expand the geographic footprint of National Science Foundation (NSF) funding. That proposal, in the Senate-passed U.S. Innovation and Competition Act (USICA), mandates that 20% of NSF’s budget be directed to a special program to help institutions in the many states that receive relatively few NSF dollars.

Such a mandate would represent a dramatic expansion of the Established Program to Stimulate Competitive Research (EPSCoR), which currently receives less than 3% of NSF’s budget. Major EPSCoR expansion is popular among legislators who would like to see the research institutions they represent become more competitive within the NSF portfolio. Some legislators have said their support of the overall innovation package is contingent on such expansion.

But the proposed 20% set-aside for EPSCoR is being met with fierce opposition on Capitol Hill. 96 other legislators recently co-authored a letter warning, “Arbitrarily walling off a sizable percentage of a science agency’s budget from a sizable majority of the country’s research institutions would fundamentally reduce the entire nation’s scientific capacity and damage the research profiles of existing institutions.”

Both proponents and opponents of the 20% set-aside make good points. Those in favor want to see more equitable distribution of federal research dollars, while those against are concerned that the mandatory set-aside is too massive and blunt an instrument for achieving that goal. Fortunately, we believe compromise is achievable—and well worth pursuing. Here’s how.

What is EPSCoR?

First, some quick background on the program at the heart of the controversy: ESPCoR. The program was established in 1979 with the admirable goal of broadening the geographic distribution of NSF research dollars, which even then were disproportionately concentrated in a handful of states.

EPSCoR provides eligible jurisdictions with targeted support for research infrastructure, development activities like workshops, and co-funding for project proposals submitted to other parts of NSF. A jurisdiction is eligible to participate in EPSCoR if its most recent five-year level of total NSF funding is equal to or less than 0.75% of the total NSF budget (excluding EPSCoR funding and NSF funding to other federal agencies). Currently, 25 states plus Puerto Rico, Guam, and the U.S. Virgin Islands qualify for EPSCoR. Yet the non-EPSCoR states still accounted for nearly 90% of NSF awards in FY 2021.
 

Why is expansion controversial?

As mentioned above, the Senate-passed USICA (S. 1260) would require NSF to devote 20% of its budget to EPSCoR (including research consortia led by EPSCoR institutions). The problem is that EPSCoR received only 2.4% of NSF’s FY 2022 appropriation. This means that to achieve the 20% mandate without cutting non-EPSCoR funding, Congress would have to approve nearly $2 billion in new appropriations for NSF in FY 2023, representing a 22% year-over-year increase, devoted entirely to EPSCoR. This is, to be blunt, wildly unlikely.

On the other hand, achieving a 20% budget share for EPSCoR under a more realistic FY 2023 appropriation for NSF would require cutting funding for non-EPSCoR programs on the order of 15%: a cataclysmic proposition for the research community.

Neither pathway for a 20% EPSCoR set-aside seems plausible. Still, key legislators have said that the 20% target is a must-have. So what can be done?

A path forward

We think a workable compromise is possible. The following three revisions to the Senate-proposed set-aside that everyone might accept:

1. Specify that the 20% mandate applies to institutions in EPSCoR states rather than the EPSCoR program itself. While specific funding for the EPSCoR program accounts for less than 3% of the total NSF budget, institutions in current EPSCoR states actually receive about 13% of NSF research dollars. In other words, a substantial portion of NSF funding is allocated to EPSCoR institutions through the agency’s normal competitive-award opportunities. Given this fact, there’s a clear case to be made for focusing the 20% ramp-up on EPSCoR-eligible institutions rather than the EPSCoR program.

    

2. Specify that the mandate only applies to extramural funding, not to agency operations and administrative appropriations. This is simply good government. If EPSCoR funding is tied to administrative appropriations, it may create an incentive to bloat the administrative line items. Further, if the mandate is applied to the entirety of the NSF budget and administrative costs must increase for other reasons (for instance, to cover future capital investments at NSF headquarters), then NSF may be forced to “balance the books” by cutting non-EPSCoR extramural funding to maintain the 20% ESPCoR share.

    

3. Establish a multi-year trajectory to achieve the 20% target. As mentioned above, a major year-over-year increase in the proportion of NSF funding directed to either EPSCoR or EPSCoR-eligible institutions could cripple other essential NSF programs from which funding would have to be pulled. Managing the deluge of new dollars could also prove a challenge for EPSCoR-eligible institutions. Phasing in the 20% target over, say, five years would (i) enable federal appropriators to navigate pathways for increasing EPSCoR funding while avoiding drastic cuts elsewhere at NSF, and (ii) give EPSCoR-eligible institutions time to build out the capacities needed to maximize return on new research investments.

Crunching the numbers

To illustrate what this proposed compromise could mean fiscally, let’s say Congress mandates that NSF funding for EPSCoR-eligible institutions rises from its current ~13% share of total research dollars to 20% in five years. To achieve this target, the share of NSF funding received by EPSCoR-eligible states would have to rise by approximately 9% per year for five years.

Under this scenario, if NSF achieves 3% annual increases in appropriations (which is close to what it’s done since the FY 2013 “sequestration” year), then we’d see about 13% annual growth in NSF research dollars funneled to EPSCoR states due to the escalating set-aside. NSF research dollars funneled to non-EPSCoR states would increase by about 1% annually over the same time period. By the end of the five-year period, EPSCoR-eligible institutions would have seen a more than 80% increase in funding.

Annual increases in NSF appropriations of 2% would be enough to achieve the 20% set-aside without cutting funding for institutions in non-EPSCoR states, but wouldn’t allow any growth in funding for those institutions either. In other words, the appropriations increases would have to be entirely directed to the rising EPSCoR set-aside.

Finally, annual increases in NSF appropriations of 5% would be enough to achieve the 20% set-aside for EPSCoR-eligible institutions while also enabling non-EPSCoR-eligible institutions to enjoy continued 3% annual increases in funding growth.
 

The next step

U.S. strength in innovation is predicated on the scientific contributions from all corners of the nation. There is hence a clear and compelling reason to ensure that all U.S. research institutions have the resources they need to succeed, including those that have historically received a lower share of support from federal agencies.

he bipartisan innovation package offers a chance to achieve this, but it must be done carefully. The three-pronged compromise on EPSCoR outlined above is a prudent way to thread the needle. It should also be supported by sustained, robust increases in NSF funding as a whole. Congress should therefore couple this compromise with an explicit, bipartisan commitment to support long-term appropriations growth for NSF—because such growth would benefit institutions in every state.

The bipartisan innovation package offers enormous potential upside along several dimensions for U.S. science, innovation, and competitiveness. To enable that upside, an EPSCoR compromise is worth pursuing.

S. 1605 — National Defense Authorization Act for Fiscal Year 2022

​SEC. 1004. Commission on Planning, Programming, Budgeting, and Execution Reform.

            (a) Establishment.–

                         (1) In general.–There is hereby established an independent commission in the legislative branch to be known as the “Commission on Planning, Programming, Budgeting, and Execution Reform” (in this section referred to as the “Commission”).

                        (2) Date of establishment.–The Commission shall be established not later 30 days after the date of the enactment of this Act.

            (b) Membership.–

                        (1) Number and appointment.–The Commission shall be composed of 14 civilian individuals not employed by the Federal Government who are recognized experts and have relevant professional experience one or more of the following:

                                    (A) Matters relating to the planning, programming, budgeting, and execution process of the Department of Defense.

                                    (B) Innovative budgeting and resource allocation methods of the private sector.

                                    (C) Iterative design and acquisition process.

                                    (D) Budget or program execution data analysis.

                        (2) Members.–The members shall be appointed as follows:

                                    (A) The Secretary of Defense shall appoint two members.

                                    (B) The Majority Leader and the Minority Leader of the Senate shall each appoint one member.

                                    (C) The Speaker of the House of Representatives and the Minority Leader shall each appoint one member.

                                    (D) The Chair and the Ranking Member of the Committee on Armed Services of the Senate shall each appoint one member.

                                    (E) The Chair and the Ranking Member of the Committee on Armed Services of the House of Representatives shall each appoint one member.

                                    (F) The Chair and the Ranking Member of the Committee on Appropriations of the Senate shall each appoint one member.

                                    (G) The Chair and the Ranking Member of the Committee on Appropriations of the House of Representatives shall each appoint one member.

                        (3) Deadline for appointment.–Not later than 30 days after the date described in subsection (a)(2), members shall be appointed to the Commission.

                        (4) Expiration of appointment authority.–The authority to make appointments under this subsection shall expire on the date described in subsection (a)(2), and the number of members of the Commission shall be reduced by the number equal to the number of appointments so not made.

            (c) Chair and Vice Chair.–The Commission shall elect a Chair and Vice Chair from among its members.

            (d) Period of Appointment and Vacancies.–Members shall be appointed for the term of the Commission. A vacancy in the Commission shall not affect its powers and shall be filled in the same manner as the original appointment was made.

            (e) Purpose.–The purpose of the Commission is to–

                        (1) examine the effectiveness of the planning, programming, budgeting, and execution process and adjacent practices of the Department of Defense, particularly with respect to facilitating defense modernization;

                        (2) consider potential alternatives to such process and practices to maximize the ability of the Department of Defense to respond in a timely manner to current and future threats; and

                        (3) make legislative and policy recommendations to improve such process and practices in order to field the operational capabilities necessary to outpace near-peer competitors, provide data and analytical insight, and support an integrated budget that is aligned with strategic defense objectives.

            (f) Scope and Duties.–The Commission shall perform the following duties:

                        (1) Compare the planning, programming, budgeting, and execution process of the Department of Defense, including the development and production of documents including the Defense Planning Guidance (described in section 113(g) of title 10, United States Code), the Program Objective Memorandum, and the Budget Estimate Submission, with similar processes of private industry, other Federal agencies, and other countries.

                        (2) Conduct a comprehensive assessment of the efficacy and efficiency of all phases and aspects of the planning, programming, budgeting, and execution process, which shall include an assessment of–

                                    (A) the roles of Department officials and the timelines to complete each such phase or aspect;

                                    (B) the structure of the budget of Department of Defense, including the effectiveness of categorizing the budget by program, appropriations account, major force program, budget activity, and line item, and whether this structure supports modern warfighting requirements for speed, agility, iterative development, testing, and fielding;

                                    (C) a review of how the process supports joint efforts, capability and platform lifecycles, and transitioning technologies to production;

                                    (D) the timelines, mechanisms, and systems for presenting and justifying the budget of Department of Defense, monitoring program execution and Department of Defense budget execution, and developing requirements and performance metrics;

                                    (E) a review of the financial management systems of the Department of Defense, including policies, procedures, past and planned investments, and recommendations related to replacing, modifying, and improving such systems to ensure that such systems and related processes of the Department result in–

                                                (i) effective internal controls;

                                                (ii) the ability to achieve auditable financial statements; and

                                                (iii) the ability to meet other financial management and operational needs; and

                                    (F) a review of budgeting methodologies and strategies of near-peer competitors to understand if and how such competitors can address current and future threats more or less successfully than the United States.

                        (3) Develop and propose recommendations to improve the effectiveness of the planning, programming, budgeting, and execution process.

            (g) Commission Report and Recommendations.–

                        (1) Interim report.–Not later than February 6, 2023, the Commission shall submit to the Secretary of Defense and the congressional defense committees an interim report including the following:

                                    (A) An examination of the development of the documents described in subsection (f)(1).

                                    (B) An analysis of the timelines involved in developing an annual budget request and the future-years defense program (as described in section 221 of title 10, United States Code), including the ability to make changes to such request or such program within those timelines.

                                    (C) A review of the sufficiency of the civilian personnel workforce in the Office of the Secretary of Defense and the Office of Cost Assessment and Program Evaluation to conduct budgetary and program evaluation analysis.

                                    (D) An examination of efforts by the Department of Defense to develop new and agile programming and budgeting to enable the United States to more effectively counter near-peer competitors.

                                    (E) A review of the frequency and sufficiency of budget and program execution analysis, to include any existing data analytics tools and any suggested improvements.

                                    (F) Recommendations for internal reform to the Department relating to the planning, programming, budgeting, and execution process for the Department of Defense to make internally.

                                    (G) Recommendations for reform to the planning, programming, budgeting, and execution process that require statutory changes.

                                    (H) Any other matters the Commission considers appropriate.

                        (2) Final report.–Not later than September 1, 2023, the Commission shall submit to the Secretary of Defense and the congressional defense committees a final report that includes the elements required under paragraph (1).

                        (3) Briefings.–Not later than 180 days after the date specified in subsection (a)(2), and not later than 30 days after each of the interim and final reports are submitted, the Commission shall provide to the congressional defense committees a briefing on the status of the review and assessment conducted under subsection (f) and include a discussion of any interim or final recommendations.

                        (4) Form.–The reports submitted to Congress under paragraphs (1) and (2) shall be submitted in unclassified form but may include a classified annex.

            (h) Government Cooperation.–

                        (1) Cooperation.–In carrying out its duties, the Commission shall receive the full and timely cooperation of the Secretary of Defense in providing the Commission with analysis, briefings, and other information necessary for the fulfillment of its responsibilities.

                        (2) Liaison.–The Secretary shall designate at least one officer or employee of the Department of Defense to serve as a liaison between the Department and the Commission.

                        (3) Detailees authorized.–The Secretary may provide, and the Commission may accept and employ, personnel detailed from the Department of Defense, without reimbursement.

                        (4) Facilitation.–

                                    (A) Independent, non-government institute.–Not later than 45 days after the date specified in subsection (a)(2), the Secretary of Defense shall make available to the Commission the services of an independent, nongovernmental organization, described under section 501(c)(3) of the Internal Revenue Code of 1986 and which is exempt from taxation under section 501(a) of such Code, which has recognized credentials and expertise in national security and military affairs, in order to facilitate the discharge of the duties of the Commission under this section.

                                    (B) Federally funded research and development center.–On request of the Commission, the Secretary of Defense shall make available the services of a federally funded research and development center in order to enhance the discharge of the duties of the Commission under this section.

            (i) Staff.–

                        (1) Status as federal employees.–Notwithstanding the requirements of section 2105 of title 5, United States Code, including the required supervision under subsection (a)(3) of such section, the members of the commission shall be deemed to be Federal employees.

                        (2) Executive director.–The Commission shall appoint and fix the rate of basic pay for an Executive Director in accordance with section 3161(d) of title 5, United States Code.

                        (3) Pay.–The Executive Director, with the approval of the Commission, may appoint and fix the rate of basic pay for additional personnel as staff of the Commission in accordance with section 3161(d) of title 5, United States Code.

            (j) Personal Services.–

                        (1) Authority to procure.–The Commission may–

                                    (A) procure the services of experts or consultants (or of organizations of experts or consultants) in accordance with the provisions of section 3109 of title 5, United States Code; and

                                    (B) pay in connection with such services the travel expenses of experts or consultants, including transportation and per diem in lieu of subsistence, while such experts or consultants are traveling from their homes or places of business to duty stations.

                        (2) Maximum daily pay rates.–The daily rate paid an expert or consultant procured pursuant to paragraph (1) may not exceed the daily rate paid a person occupying a position at level IV of the Executive Schedule under section 5315 of title 5, United States Code.

            (k) Authority to Accept Gifts.–The Commission may accept, use, and dispose of gifts or donations of services, goods, and property from non-Federal entities for the purposes of aiding and facilitating the work of the Commission. The authority in this subsection does not extend to gifts of money. Gifts accepted under this authority shall be documented, and conflicts of interest or the appearance of conflicts of interest shall be avoided. Subject to the authority in this section, commissioners shall otherwise comply with rules set forth by the Select Committee on Ethics of the Senate and the Committee on Ethics of the House of Representatives governing Senate and House employees.

            (l) Legislative Advisory Committee.–The Commission shall operate as a legislative advisory committee and shall not be subject to the provisions of the Federal Advisory Committee Act (Public Law 92-463; 5 U.S.C. App) or section 552b, United States Code (commonly known as the Government in the Sunshine Act).

            (m) Contracting Authority.–The Commission may acquire administrative supplies and equipment for Commission use to the extent funds are available.

            (n) Use of Government Information.–The Commission may secure directly from any department or agency of the Federal Government such information as the Commission considers necessary to carry out its duties. Upon such request of the chair of the Commission, the head of such department or agency shall furnish such information to the Commission.

            (o) Postal Services.–The Commission may use the United States mail in the same manner and under the same conditions as departments and agencies of the United States.

            (p) Space for Use of Commission.–Not later than 30 days after the establishment date of the Commission, the Administrator of General Services, in consultation with the Commission, shall identify and make available suitable excess space within the Federal space inventory to house the operations of the Commission. If the Administrator is not able to make such suitable excess space available within such 30-day period, the Commission may lease space to the extent the funds are available.

            (q) Removal of Members.–A member may be removed from the Commission for cause by the individual serving in the position responsible for the original appointment of such member under subsection (b)(1), provided that notice has first been provided to such member of the cause for removal and voted and agreed upon by three quarters of the members serving. A vacancy created by the removal of a member under this subsection shall not affect the powers of the Commission, and shall be filled in the same manner as the original appointment was made.

            (r) Termination.–The Commission shall terminate 180 days after the date on which it submits the final report required by subsection (g)(2).

WASHINGTON, D.C. – Today, Federation of American Scientists Acting President Dan Correa released the following statement on President Joe Biden’s proposed $6 trillion budget request to Congress:

“With a global pandemic disrupting the world and highlighting both the strengths and liabilities of the United States’ economy and infrastructure, the Federation of American Scientists commends President Biden on putting forward a budget that would address critical needs, from childcare and paid leave to investing in electric vehicle charging stations. Foundational investments in roads, water pipes, broadband internet, and advanced manufacturing are key to helping our nation rebuild, enhancing national security, and supporting all Americans. Included in the President’s budget request is $7.5 billion to launch Advanced Research Project Agencies for health and climate, representing a generational investment in advancing innovative research and development. Further, the budget includes a $500 million investment in the Technology Modernization Fund, $300 million for research and development in technologies of the future, and an additional $750 million devoted towards upgrading the security of IT, which represent opportunities for the federal government to deliver services more effectively to the American people. The budget request includes a critical $8.7 billion investment to support the Centers for Disease Control and Prevention to help prepare for emerging global threats, a necessary national security priority.”

The Federation of American Scientists is committed to ensuring that insights from scientists and technologists are included at policymaking tables. For further information on modernizing technology in government, you can read Scaling Proven IT Modernization Strategies Across the Federal Government, a Day One Proposal by Ann Dunkin and Greg Godbout. For further information on delivering high-speed internet to rural communities, clean infrastructure development, investing in health research, and building a competitive workforce, you can read the Day One Project proposals to Prioritize Funding for High-Speed Internet Connectivity that Rural Communities Can Afford to Adopt by Caroline Stratton, a proposal on Revitalizing the DOE Loan Program Office to Support Clean Infrastructure Development by David Foster, Michael Kearney, and Chris Knittel, a proposal on Creating the Health Advanced Research Projects Agency (HARPA) by Michael Stebbins and Geoff Ling, and a proposal on Responding to the COVID-19 Unemployment Crisis and Meeting the Future of Work Challenge by Marcus Courtney and Adam Bobrow.

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Just a small group of nationally-ranked universities are awarded the majority of federal research funding. In 2018, a study found that out of more than 600 colleges and universities that received federal funding for science and engineering research, about 22 percent received over 90 percent of the funds. The equity and accessibility of these funds was the focus of this week’s Senate Appropriations Committee hearing held to discuss the budget that could be allotted to the National Science Foundation (NSF) in fiscal year 2022. During the hearing, NSF director Sethuraman Panchanathan emphasized that addressing research disparities and establishing far-reaching partnerships were priorities for the agency.

Disparities in research funding

Disparities in research funding can greatly harm the ability of students to enter scientific careers, and diminish the potential of the country’s scientific workforce overall. The institutions that received over 90 percent of federal science funding in 2018 served only 43 percent of all students in the U.S., and only 34 percent of students from underrepresented groups. So two-thirds of underrepresented minorities and almost 70 percent of Pell grant recipients (who are undergraduates with “exceptional financial needs”) have more limited access to valuable opportunities to participate in scientific research. At the same time, researchers argue that incorporating diverse perspectives and talents leads to more innovative solutions, and that not including underrepresented minorities in science will only harm the U.S.’ competitiveness.

NSF’s most well-known program to address research funding disparities is the Established Program to Stimulate Competitive Research (EPSCoR). This program, which is now over 40 years old, partners with institutions of higher education to stimulate sustainable improvements in research and development capacity in specific states. States (as well as U.S. territories and DC) become eligible for EPSCoR funding if they receive 0.75 percent or less of total NSF research and related activities funding over the previous three years. Studies have shown that states with EPSCoR funding increase the quality of their universities’ publications, and that they become more competitive for future federal research funding competitions. However, more research needs to be done to fully assess the program’s impact.

Expanded access to research funding a priority for the Biden Administration

The Biden Administration has emphasized the importance of addressing research funding accessibility in the FY 2022 skinny budget request, which highlights the President’s top spending priorities for the next year in advance of the release of the full request for each agency. Specifically, President Biden is requesting $100 million for programs that “aim to increase participation in science and engineering of individuals from racial and ethnic groups, who are traditionally underrepresented in these fields.” This funding is intended to support increasing science and engineering research and education capacity at Historically Black Colleges and Universities (HBCUs) and other Minority-Serving Institutions (MSIs), as well as research on recruitment and retention methods, mentorship programs, and curriculum development. Studies by the National Academies of Science, Engineering, and Medicine (NASEM) have determined that this type of funding is critical to ensure the success of underrepresented minority students.

Director Panchanathan’s priorities for NSF

During the hearing, Director Panchanathan echoed (46:05) that more needs to be done to tap into the U.S.’ potential scientific talent. His two main priorities for NSF are to increase access to scientific research through regional innovation accelerators and to strengthen partnerships with other agencies, including the Department of Energy (DOE) and its national laboratories. The regional accelerators would rely on an expanded EPSCoR program, as well as support from other NSF directorates. NSF is also working to expand artificial intelligence (AI) research to every state to tap into as much talent as possible. Last year, NSF distributed grants to develop seven AI institutes which have operations in 20 different states. Director Panchanathan hopes (46:45) to expand this further in the coming years. This idea of widely-distributed hubs aligns with a new proposal from FAS’ Day One Project that suggests a path forward for the creation of innovation ecosystems that would launch new startup ideas and cultivate the next generation of research and development talent.

Regarding strengthening partnerships with DOE, NSF collaborates with the agency on a variety of programs, including the development of new algorithms to bolster the security and efficiency of modern power grids, the creation of collaborative robots to assist humans with a variety of tasks, and the advancement of basic plasma research and education. NSF historically focuses on basic research, while DOE, and its national labs in particular, drive the commercialization of new technologies. Director Panchanathan aims (1:22:06) to further develop relationships with the agency to more closely connect NSF’s basic research strengths with DOE’s expertise in technology transfer and ensuring cutting-edge research and technologies are commercialized in the U.S., instead of by other countries. By fostering closer cooperation between NSF and the other federal science agencies, the U.S. will be able to better compete with countries, such as China, that aim to supplant the U.S. as world leader in critical technology and science fields.

The future of research and development in the U.S.

Both the Biden Administration and Congress would like to accelerate science and engineering education and research to boost the U.S.’ domestic growth and global competitiveness. In the formulation of the FY 2022 federal budget for science funding, there will be more discussions on Capitol Hill about how to bolster the country’s expertise in high-priority fields such as AI, climate science, quantum computing, clean energy, and biotechnology, and harmonize the approaches of the executive and legislative branches. We encourage the CSPI community to get involved in future CSPI calls to action, and serve as a scientific resource for policymakers.

Updated below

The Department of Defense is quietly asking Congress to rescind the requirement to produce an unclassified version of the Future Years Defense Program (FYDP) database.

Preparation of the unclassified FYDP, which provides estimates of defense spending for the next five years, has been required by law since 1989 (10 USC 221) and has become an integral part of the defense budget process.

But the Pentagon said that it should no longer have to offer such information in an unclassified format, according to a DoD legislative proposal for the pending FY 2021 national defense authorization act.

“The Department is concerned that attempting publication of unclassified FYDP data might inadvertently reveal sensitive information,” the Pentagon said in its March 6, 2020 proposal.

“With the ready availability of data mining tools and techniques, and the large volume of data on the Department’s operations and resources already available in the public domain, additional unclassified FYDP data, if it were released, potentially allows adversaries to derive sensitive information by compilation about the Department’s weapons development, force structure, and strategic plans.”

Therefore, DoD said, “This proposal would remove the statutory requirement to submit an Unclassified Future Years Defense Program (FYDP) to the Congress, the Congressional Budget Office, the Comptroller General of the United States, and the Congressional Research Service.” It follows that FYDP data would also not be included in the published DoD budget request, as it typically has been in the past.

The DoD proposal would preserve a classified FYDP for Congress but it would repeal the requirement that DoD officials “certify that the data used to construct the FYDP is accurate.” DoD said that “This requirement is unnecessary as information from these systems is already used to provide the President’s Budget.”

The unclassified FYDP helps inform budget analysis

At a time when it is clear to everyone that US national security spending is poorly aligned with actual threats to the nation, the DoD proposal would make it even harder for Congress and the public to refocus and reconstruct the defense budget.

Without an unclassified FYDP, Congress and the public would be deprived of unclassified analyses like “Long-Term Implications of the 2020 Future Years Defense Program” produced last year by the Congressional Budget Office. Other public reporting by GAO, CRS, the news media and independent analysts concerning the FYDP and future defense spending would also be undermined.

Some information in the FYDP — such as projected intelligence spending — has always been deemed sensitive enough that it can be classified.

But most information in the FYDP is unclassified and is properly the subject of public oversight. So, for example, the recent FY2021 defense budget request for military construction includes an “FY21 FYDP Project List” identifying numerous proposed construction projects across the country and around the world that are anticipated through 2025.

DoD no longer publishes its legislative proposals

Until two years ago, DoD published its legislative proposals to Congress on the website of the DoD General Counsel. (The proposals for FY 2019 are still online.) But that is no longer the case. As part of a broader retreat from public oversight and accountability, the Pentagon today does not make its legislative proposals easily accessible to the public.

A copy of the current package of DoD legislative proposals through March 6, 2020 was obtained by Secrecy News. A complete tabulation of the dozens of specific proposals is available here. A section-by-section description of all of the proposals is here.

Among the current batch is a proposed exemption from the Freedom of Information Act for certain unclassified documents concerning military tactics, techniques, or procedures.

That very same proposed FOIA exemption has previously been rejected by Congress on at least four prior occasions. So legislative approval of such requests is not necessarily a foregone conclusion.

Late last week, the House Armed Services Committee filed a preliminary version of the FY21 defense authorization act (HR 6395) based on the DoD legislative proposals. “When the Committee meets to consider the FY21 NDAA, the content of H.R. 6395 will be struck and replaced with subcommittee and full committee proposals,” according to a March 27 news release.

Update 1: On March 31, DoD posted its legislative proposals for the FY 21 defense authorization act.

Update 2: A DoD spokesman said the Pentagon’s proposal was not intended to limit public access to all future year spending data. “There will be no reduction in any currently provided information,” the spokesman said. See Pentagon denies it seeks to hide future budget information by Aaron Mehta, Defense News, April 3, 2020.

A new congressional tally of military construction projects that have unobligated fund balances turned up hundreds of current projects fitting that description. See “FY2017-2019 Military Construction Projects/Programs with Unobligated Balances.”

Because the President declared a national emergency, some of the funds for those military construction activities could be repurposed in order to pay for barriers along the border with Mexico, pursuant to 10 USC 2808.

Declaring that a national emergency exists made it possible “to secure additional resources” to construct barriers along the border, the Trump White House said on February 15.

The White House said that up to $3.6 billion in unobligated Department of Defense military construction funds would now “be available to build the border wall.”

Funds are said to be “obligated” as the result of a purchase, contract or other government action that incurs a legal obligation to pay them. Until that happens, they are “unobligated” even though they have been appropriated for a specific purpose.

There is a considerable amount of military construction money that has not been obligated.

“According to DOD information, the department reported unobligated balances in the military construction and family housing accounts totaling $13.3 billion at the end of FY2018,” the Congressional Research Service noted recently.

Even though the money may be legally available, it is not “free.”

“All of this money has been assigned for other purposes, so it really then comes to what can — what are you going to trade off, because when you say tradeoff, it really is a tradeoff,” said Acting Secretary of Defense Patrick Shanahan on February 16.

The President’s declaration of national emergency faces a legislative challenge as well as pending litigation.

Government agencies may remove or omit budget information from their public financial statements and may present expenditures that are associated with one budget line item as if they were associated with another line item in order to protect classified information, the Federal Accounting Standards Advisory Board concluded last week.

Under the newly approved standard, government agencies may “modify information required by other [financial] standards” in their public financial statements, omit otherwise required information, and misrepresent the actual spending amounts associated with specific line items so that classified information will not be disclosed. (Accurate and complete accounts are to be maintained separately so that they may be audited in a classified environment.)

See Classified Activities, Statement of Federal Financial Accounting Standards (SFFAS) 56, Federal Accounting Standards Advisory Board, October 2018.

The new policy was favored by national security agencies as a prudent security measure, but it was opposed by some government overseers and accountants.

Allowing unacknowledged modifications to public financial statements “jeopardizes the financial statements’ usefulness and provides financial managers with an arbitrary method of reporting accounting information,” according to comments provided to the Board by the Department of Defense Office of Inspector General.

Properly classified information should be redacted, not misrepresented, said the accounting firm Kearney & Company. “Generally Accepted Accounting Principles (GAAP) should not be modified to limit reporting of classified activities. Rather, GAAP reporting should remain the same as other Federal entities and redacted for public release or remain classified.”

The new policy, which extends deceptive budgeting practices that have long been employed in intelligence budgets, means that public budget documents must be viewed critically and with a new degree of skepticism.

A classified signals intelligence program dubbed “Vesper Lillet” that recently became the subject of a fraud indictment was ostensibly sponsored by the Department of Health and Human Services, but in reality it involved a joint effort of the National Reconnaissance Office and the National Security Agency.

See “Feds allege contracting fraud within secret Colorado spy warehouse” by Tom Roeder, The Gazette (Colorado Springs), October 5, 2018.

“Since September 11, 2001, the Department of Defense (DoD) has obligated $1,500.8 billion for war-related costs.”

That’s the headline from the latest report to Congress on the post-9/11 costs of war, according to the Pentagon’s own reckoning. See Cost of War Update as of March 31, 2018 (FY 2018, Quarter 2).

Independent estimates of military spending that use a broader definition of the term yield a considerably higher total.

The new DoD report provides a detailed retrospective account of post-9/11 military spending, broken down by theater (Afghanistan, Iraq, Syria), by fiscal year, and by military service. A copy was obtained by Secrecy News.

The fraction of war-related funds that were appropriated to DoD in the post-9/11 period for classified purposes totaled $88 billion, the report said.

The 76-page DoD report itself exemplifies a certain financial profligacy, with a price tag that is orders of magnitude higher than one might have supposed. “The cost to the Department of Defense to prepare and assemble this report is approximately $209,000 for FY 2018,” the document states.

The so-called “black” budget — which refers to classified government spending on military procurement, operations, and intelligence — is not merely secret. It is actually deceptive and misleading, since it produces a distortion in the amount and the presentation of the published budget.

The amount of money that is purportedly appropriated for the US Air Force, for example, does not all go to the Air Force, the Senate Armed Services Committee recently observed.

“Each year, a significant portion of the Air Force budget contains funds that are passed on to, and managed by, other organizations within the Department of Defense. This portion of the budget, called ‘pass-through,’ cannot be altered or managed by the Air Force. It resides within the Air Force budget for the purposes of the President’s budget request and apportionment, but is then transferred out of the Service’s control,” according to a Senate report on the 2019 defense bill (S.Rept. 115-262).

Although the report does not say so, the Air Force budget may also include pass-through funding for the Central Intelligence Agency, which of course is not even part of the Department of Defense, as well as for other non-Air Force intelligence functions.

“In fiscal year 2018, the Air Force pass-through budget amounted to approximately $22.0 billion, or just less than half of the total Air Force procurement budget. The committee believes that the current Air Force pass-through budgeting process provides a misleading picture of the Air Force’s actual investment budget.”

The Senate therefore recommended that such “pass-through” funds be removed from the Air Force budget and included in Defense-wide appropriations.

But in the House-Senate conference on the FY2019 defense bill, this move was blocked and so the deceptive status quo will continue to prevail.

Earlier this month, the Director of National Intelligence and the Pentagon Comptroller wrote to Congress to present their views on the Senate provision. A copy of their letter, which presumably objected to the proposed move, has been requested but not yet released.

The logic of the Senate proposal was explained by Mackenzie Eaglen of the American Enterprise Institute in “Time to Get the Black Out of the Blue,” Real Clear Defense, June 13.

The Trump Administration budget request would cut federal spending on research and development in every major agency except for the Department of Defense and Veterans Affairs, the Congressional Research Service said yesterday in a new report.

“Nearly every federal agency would see its R&D funding decrease under the President’s FY2018 request compared to their FY2016 levels,” the CRS report said.

“The largest declines (as measured in dollars) would occur in the budgets of HHS (down $6.099 billion, 18.9%), DOE (down $1.809 billion, 11.9%), USDA (down $666 million, 25.1%), NSF (down $639 million, 10.6%), and the EPA (down $239 million, 46.3%).”

Federal R&D is generally understood to provide support for scientific, medical, military and other research of economic, social, security or other value that would not normally be undertaken by the private sector. Reducing R&D therefore means foregoing the benefits that might otherwise accrue from such investment.

CRS noted that the Trump budget request is “largely silent” on funding for existing multiagency R&D initiatives such as the National Nanotechnology Initiative, Networking and Information Technology Research and Development program, U.S. Global Change Research Program, Brain Research through Advancing Innovative Neurotechnologies (BRAIN) initiative, Precision Medicine Initiative, Cancer Moonshot, Materials Genome Initiative, National Robotics Initiative, and National Network for Manufacturing Innovation. The future of these programs, some of which have a statutory basis, is left uncertain in the Administration budget request.

However, the budget request is the first word, not the last word, in the budgeting process.

“Congress may opt to agree with none, part, or all of the request, and it may express different priorities through the appropriations process,” CRS said. “In particular, Congress will play a central role in determining the allocation of the federal R&D investment in a period of intense pressure on discretionary spending.”

See Federal Research and Development Funding: FY2018, July 31, 2017.

Other new or updated reports from the Congressional Research Service include the following.

Bail: An Overview of Federal Criminal Law, updated July 31, 2017

The Federal Communications Commission: Current Structure and Its Role in the Changing Telecommunications Landscape, updated July 28, 2017

Ongoing Section 232 Steel and Aluminum Investigations, CRS Insight, July 28, 2017

In Brief: Highlights of FY2018 Defense Appropriations Actions, July 31, 2017

NAFTA and Motor Vehicle Trade, July 28, 2017

Rwanda’s August 4 Presidential Election, CRS Insight, July 31, 2017

Honduras: Background and U.S. Relations, updated July 28, 2017

U.S. Petroleum Trade with Venezuela: Financial and Economic Considerations Associated with Possible Sanctions, CRS Insight, July 27, 2017

Afghanistan: Post-Taliban Governance, Security, and U.S. Policy, updated July 24, 2017