Dr. Lane's House FY2000 Budget Testimony
Statement of
The Honorable Neil Lane
Assistant to the President for Science and Technology


Director of the Office of Science and Technology Policy
before the
Subcommittee on Veterans Affairs, HUD, and Independent Agencies
Committee on Appropriations
United States House of Representatives

March 24, 1999

Dr. Lane's Written Testimony


Mr. Chairman, Members of the Committee, I am pleased to appear before you today to discuss the Office of Science and Technology Policy's (OSTP) budget request for Fiscal Year 2000.

I very much welcome, and am encouraged by the current efforts in Congress in support of science and technology (S&T) funding. As you know, funding for S&T, like funding for education, is a high leverage investment in our continued quest for peace and prosperity. Support for such investments has traditionally been a matter of bipartisan agreement. It is imperative that we build common ground in support of a shared vision -- a commitment to keep America the world's leader in S&T.

As we approach the turn of the century, it seems appropriate to take stock of the Nation's S&T enterprise, and to look to the future -- to the opportunities that lie ahead as well as the challenges that we face. The Information Age, driven by rapidly advancing S&T, is bringing changes to our society that are only beginning to unfold. Already, new communications technologies are transforming the way we work, where we work, and what we need to know to be successful in tomorrow's competitive environment. Six years ago, "Internet" was still a word known mostly to those in S&T. Today, this offspring of federal research activities is the backbone of a new industry and a window to a tremendous world of information for all segments of our society, from business executives to school children.

The rapid economic growth of other nations means a future with greatly expanded markets for U.S. goods and services. Our ability to move our ideas, our goods, and ourselves swiftly to any place on the planet, with the help of new technologies, enhances our ability to share in the growth of global wealth. On the other hand, the increasing availability of these same capabilities throughout the world also means greater competition; it means increasing pressures on our shared environment, health, and natural resources; and it means more diverse dangers to our security from threats such as terrorism and the spread of nuclear and other materials of mass destruction.


Sustaining U.S. leadership in science and technology has been a cornerstone of President Clinton's economic and national security strategy. Investments in science and technology -- both public and private -- have driven economic growth and improvements in the quality of life in America for the last 200 years. They have generated new knowledge and new industries, created new jobs, ensured economic and national security, reduced pollution and increased energy efficiency, provided better and safer transportation, improved medical care, and increased living standards for the American people.

Our economy has never been more driven by science and technology than it is today. Over the past three years, information technology (IT) alone has accounted for more than one-third of America's economic growth. More than 7.4 million American's work in IT today -- and those jobs pay, on average, sixty percent higher than the average job. Alan Greenspan recently stated that rapid technological change has greatly contributed to eight years of record peacetime expansion, and is one of the forces producing what he called "America's sparkling economic performance."

Investments in research and development are among the highest-payback investments a Nation can make. Over the past 50 years technological innovation has been responsible for as much as half of the nation's growth in productivity.

We see the fruits of this innovation every day. Many of the products and services we have come to depend on for our way of life in America -- lasers, computers, magnetic resonance imaging (MRI), teflon and other advanced materials and composites, communications satellites, jet aircraft, microwave ovens, solar-electric cells, modems, semiconductors, storm windows, human insulin, and others -- are the product of U.S. science support and technology policies.

These innovations also mean jobs and economic prosperity for America. They've built some of these key industries:

Computers and Communications: A creative partnership among the Federal agencies, industry, and academia led to what has become the Internet, the backbone of a global electronic communication system. The Internet has driven the evolution of a $590 billion domestic telecommunications and information technology industry, which supports millions of high-paying American jobs. In just the past 10 years, American employment in the computer and software industries has almost tripled. Market capitalization of the top five companies alone is over $600 billion.

Biotechnology: Discoveries in biology, food science, agriculture, genetics, and drugs upon which the private sector has been able to build and expand a world-class industry today support $13.4 billion in annual sales and more than 150,000 American jobs.

Aerospace: Aerospace leads all other industry sectors in net exports. The latest figures show the U. S. Aircraft industry shipped nearly $40 billion worth of commercial aircraft and employed more than half a million people.

Environmental Technologies: Almost unheard-of 10 years ago, more than 30,000 environmental technology and services businesses employ over 1.3 million Americans in high-growth, high-wage jobs. The environmental technology industry has annual sales over $186 billion, a number that is expected to grow to $214 billion by the year 2002.

Energy Efficiency: Technology advances, developed in part through public-private partnerships, have cut refrigerator energy consumption from 1900 kWh/year in 1974 to an average today of less than 650 kWh/year, reducing consumer electricity costs by $100/year per refrigerator. A partnership with the glass industry led to the development of the oxygen-fueled glass furnace, which in just 8 years has captured 30% of U.S. glass production and provides annual net energy savings of $11 million. Geothermal heat pumps (GHP) reduce energy consumption by 63-72% compared to electric resistance heaters/standard air conditioners. Some 400,000 GHPs are now in use in the U.S., with estimated annual savings of $120 million to $160 million.

Every one of these industries has been built on federal investments in R&D, and they are not isolated occurrences. From satellites, to software, to superconductivity the government has supported -- and must continue to support -- exploratory research, experimentation and innovation that would be difficult, if not impossible, for individual companies or even whole industries to afford.

Recent Advances in Science and Technology

Over the past year there have been numerous scientific and technological advances, reminding us of how much there is yet to know, and of the potential of S&T to further enrich and improve our lives. It is important to note that federal funding was a key to virtually all of the scientific breakthroughs of 1998, which included:


The President and the Vice President remain unwavering in their support for science and technology as crucial investments in our future. They maintain that such investments enable our nation to compete aggressively in the global marketplace, protect our environment and manage our natural resources in a sustainable manner, safeguard our national security from emerging threats, and spur the technological innovation that has contributed so much to our economic prosperity and quality of life. They have brought the budget into balance. They have increased the investment in science and technology. We all, but especially our children and our grandchildren, will reap the rewards.

President Clinton has submitted a balanced budget request to Congress for FY 2000. Despite the tight constraint on discretionary spending, FY 2000 is the seventh year in a row that the President has proposed increased investments in civilian research and development -- to a total of $39.8 billion. Civilian R&D now constitutes 51% of the overall R&D budget of $78.2 billion.

The FY 2000 budget continues the important R&D trends established by this Administration. It boosts funding for basic research to $18.2 billion, an increase of 4.2% ($727 million) over FY 1999. The budget also strengthens university-based research, which increases by $353 million, and reflects an effort to reestablish an optimum balance between health care research and other scientific disciplines.

The 21st Century Research Fund continues to be the centerpiece of the President's R&D investment strategy. This year the Research Fund includes DOD basic and applied research programs, further evidence of the Administration's commitment to effective integration of the Nation's university-based research portfolio. The $38 billion Research Fund grows by 3% in FY 2000 and provides for overall stability and for growth in the highest priority research programs.

The proposed R&D investments will enable the S&T agencies to achieve the President's goals for science and technology: promote long-term economic growth that creates high-wage jobs; sustain a healthy, educated citizenry; harness information technology; improve environmental quality; enhance national security and global stability; and maintain world leadership in science, engineering, and mathematics. For example:

Interagency Initiatives

The budget increases investment in national priorities requiring multi-agency investments. For example:

Private Sector Stimulus

The budget provides $2.4 billion to extend the Research and Experimentation (R&E) tax credit until June 30, 2000. The R&E credit helps stimulate additional private sector investment in research and development which encourages technological advancement, leading to higher productivity, and helping to generate new American jobs.


In support of our Nation's science and technology priorities, OSTP has two primary responsibilities: advising the President on S&T; and providing leadership and coordination for our government's role in the national S&T enterprise.

In the 1950's, in response to Soviet advances, highlighted by the launch of Sputnik, President Eisenhower saw the need for expert S&T counsel, and he invited James Killian, then president of MIT, to Washington to serve as the head of the first President's Science Advisory Committee, an OSTP predecessor. Since then our Nation's Presidents have drawn on the expertise of our office for S&T policy advice, and I see this as a contribution that will continue to grow in value as the challenges we face become increasingly complex.

Within our agency, a small staff of professionals analyzes developments at the frontiers of scientific knowledge, and aids the President in shaping policy. OSTP also provides scientific and technical information and recommendations to the Vice President, the White House Offices, the Executive Branch Agencies, and to Congress.

A second responsibility of OSTP is to provide leadership and coordination across the Administration. OSTP plays this role for a range of Administration priorities, including national security and global stability, environment, science, and technology. The National Science and Technology Council (NSTC) has been an invaluable partner with OSTP in developing interagency evaluations and forging consensus on many crucial S&T issues.

OSTP Budget Request

I ask today for your continued support of OSTP's role in coordinating S&T policy for the Executive Branch and for our Nation at large. OSTP's budget request of $5,201,000 for FY 2000 represents an increase in budget authority of less than 3.5% and an increase of one in the FTE level from 39 in FY 1999 to 40 in FY 2000. This request will allow OSTP to fulfill its responsibilities in a White House that emphasizes the importance of science and technology in national and international affairs.

After freezing our requests at the FY 1996 enacted level for two consecutive years, this increase is essential to continue to provide quality support to the President and information to the Congress. Since personnel costs constitute the largest portion of OSTP's budget, our FY 2000 budget request reflects our commitment to operate more efficiently and cost-effectively without compromising the essential element of a top caliber science and technology agency -- high quality personnel.

National Science and Technology Council

To meet the Administration's priority S&T goals we must combine the efforts and the expertise of multiple agencies. OSTP personnel support the work of the NSTC, a Cabinet-level Council that sponsors interagency initiatives to advance key S&T objectives.

Our distributed system of research funding also places a premium on coordination between complementary agency programs. The NSTC, now in its fifth year, is improving such coordination.

NSTC membership includes Cabinet Secretaries, heads of science and technology agencies, and key White House officials with significant S&T responsibilities. In the process of generating specific budgetary and policy recommendations, NSTC routinely reaches beyond the federal government to seek input from a wide spectrum of stakeholders in the public and private sectors.

An important objective of the NSTC is to guide individual agency budget priorities for R&D and to orient the S&T spending of each Federal mission agency toward achieving national goals. To meet this objective, the NSTC has established five goal-oriented committees, each of which is chaired jointly by a senior agency official and an OSTP Associate Director. These standing committees, along with ad hoc working groups within the NSTC, provide an effective forum to resolve cross-cutting issues such as the future role of the U.S. national laboratories, or providing a program guide to federally funded environment and natural resources (see Appendix A for a full list of NSTC generated reports from 1998.)

The President's Committee of Advisors on Science and Technology

As Assistant to the President for Science and Technology, the Director of OSTP co-chairs the President's Committee of Advisors on Science and Technology (PCAST) with John Young, former President and CEO of Hewlett-Packard Co. The PCAST, which consists of distinguished individuals from industry, education, and research institutions, and other non-governmental organizations, serves as the highest level private sector advisory group for the President and the NSTC. (see Appendix B for a full list of PCAST generated reports from 1998.) President Clinton established the President's Committee of Advisors on Science and Technology (PCAST) at the same time that he established the NSTC to advise the President on matters involving S&T and to assist the NSTC in securing private sector involvement in its activities.

Mr. Chairman and Members of the Committee, I hope that this brief overview has conveyed to you the extent of this Administration's commitment to advancing S&T in the national interest. We are delighted that the fiscal discipline exercised over the past six years has put in reach the opportunity to place more emphasis on investments that can assure future economic progress, environmental protection, and other national priorities which depend so heavily on strong and sustained R&D.

Regardless of party affiliation, in the end we can all agree that investments in S&T are investments in our Nation's future. I look forward to achieving bipartisan support for a national S&T strategy that will combine the resources of industry, academia, non-profit organizations, and all levels of government to advance knowledge, promote education, strengthen institutions, and develop human potential.

I ask not only for your support for OSTP's Fiscal Year 2000 budget request, but also want you to know how much I appreciate the long-standing bipartisan support of the committee for OSTP and for the S&T research enterprise. I would be happy to answer any questions that you have.



National Plant Genome Initiative, January 1998

Program Guide to Federally Funded Environment and Natural Resources R&D, February 1998

Our Changing Planet: The FY 1999 U.S. Global Change Research Program, An Investment in Science for the Nation=s Future, March 1998

National Science and Technology Council 1997 Annual Report, April 1998

A National Obligation/Planning for Health Preparedness for and Readjustment of the Military, Veterans, and Their Families after Future Deployments, August 1998

FY 2000 Interagency Research and Development Priorities (Jones-Lew Memorandum), June 1998

Networked Computing for the 21st Century/Supplement to the President's FY 99 Budget,

August 1998

Transportation Technology Plan, November 1998

Air Quality Research Strategic Plan, November 1998

Public/Private Partnerships: Implications for Innovation in Transportation, December 1998

Endocrine Disruptors: Research Needs and Priorities, December 1998
Reports and Further Information may be obtained by calling: 202-456-6100 (phone) or 202-456-6026 (fax)

Reports are Also Available on the NSTC Home Page via Link from the OSTP Home Page at:










In 1998 PCAST provided the following reports:

Teaming With Life: Investing in Science to Understand and Use America's Living Capital (June 1998). Over the last few decades, a new paradigm has emerged: Improving and protecting our environment is compatible with growing the nation=s economy. As part of this paradigm, we have come to recognize the essential linkage between the economy and the environment. We now understand that the sustained bounty of our nation=s lands and waters and of its native plant and animal communities is the natural capital on which our economy is founded. We also realize that a sound forward-looking economic strategy requires that we protect this natural capital, rather than damage it and then spend millions or billions of dollars attempting to recreate what nature has already given us. To protect our natural capital, our Nation=s biodiversity and the ecosystems within which it thrives, we need to have an extensive and frequently updated environmental knowledge base. This knowledge base is required to evaluate alternative plans for managing biodiversity and ecosystems as we work to optimize the union between the environment and the economy. The report offers strategies as to how to amplify our knowledge that will allow us to accomplish these goals.

  PCAST issued the following letter reports:

Letter Report on R&D Partnerships, released March 6, 1998, reviewed the effectiveness of Federal technology partnership programs based on three studies and noted areas for improving programmatic effectiveness and efficiency.

Letter Report on Global Cooperation to Develop and Commercialize Energy Technologies to Meet the Global Challenge of Climate Change, released May 15, 1998. The report advised that the issues of climate change presents the United States and the world with one of the greatest challenges of the 21st century. The report recommended development of a plan to address the challenge of global impact of human activities through technology and development of a global collaborative framework in greenhouse-gas reductions.

Letter Report on the Education Research Initiative, released June 8, 1998. The report advised that the quantity, quality, and organization of education research in this country need renewed attention. The report recommended that the FY 1999 spending constitute an initial investment in building the methodological human, and institutional resources that will move the United States to a $1.5 billion annual program of peer reviewed, politically independent, reliable, and cumulative research in education that draws on a broad base of expertise.

Letter Report on the FY 2000 Budget, released November 4, 1998. The report urges the President to strongly support a broad S&T portfolio in the FY 2000 budget. PCAST advised the President to continue to focus Federal resources on strengthening the U.S. research capacity through an approach such as the 21st Century Research Fund and to broaden this concept to encompass the basic research programs of the DOD.


Dr. Lane's Oral Testimony


Mr. Chairman, Members of the Committee, I am pleased to appear before you today. My written testimony describes the Office of Science and Technology Policy's (OSTP) budget request for Fiscal Year 2000, and also provides highlights of the national science and technology enterprise during 1998 and the Administration's FY 2000 R&D Budget request, and I ask that it be included for the record.

As you know, OSTP plays a vital role in leveraging the government's science and technology investments for broad national goals. Support for such investments has traditionally been a matter of bipartisan agreement. It is imperative that we build common ground in support of a shared vision -- a commitment to keep America the world's leader in science and technology.

OSTP has four main functions:

We advise the President and other senior administration officials about the impacts of science and technology on public policy (and vice versa);
We coordinate the work of the R&D agencies to ensure we get the biggest bang for our science and technology bucks;
We promote strategic partnerships among science and technology stakeholders -- State and local government, industry, academia, and various international players; and
We report on what we've learned through all these efforts. Last year OSTP shepherded eleven multi-agency reports through the Nationsl Science and Technology Council, and seven reports and letter-reports through the President's Committee of Advisors on Science and Technology.
An example that provides a sense of the breadth of OSTP's influence is our work on the Administration's Initiative on Information Technology for the Twenty-First Century.

This initiative responds to a wake-up call from the Congressionally-chartered President's Information Technology Advisory Committee, or PITAC. OSTP was instrumental in getting the Committee established. We also worked closely with the Committee to make sure its work was useful to the federal agencies while also challenging those agencies to think outside of the box about their responsibilities and possibilities in information technology research.

Once we had the PITAC recommendations, OSTP pulled together the federal agencies to develop a response. We ultimately concluded that information technology is so important that we are proposing new Federal R&D investments of $366 million in FY2000 -- a 28% increase above and beyond our ongoing research programs. Out of this total Mr. Chairman, $184 million -- half of the initiative -- comes through your Subcommittee. To develop this initiative, we worked with the agencies to examine the existing information technology research programs to determine how we could leverage them to get the best returns from new investments responsive to the PITAC recommendations.

We decided to make these new investments in three major areas:

First, about two-thirds of the new funding ($228 million) will support long-term fundamental research aimed at fundamental advances in computing and communications.

The second element is $123 million to support advanced computing infrastructure as a tool to facilitate important scientific and engineering discoveries of national interest. The resulting supercomputing infrastructure will be orders of magnitude more powerful than that currently available to the civilian science community.

Third, $15 million in new funding will greatly expand research into social, economic, and workforce impacts of information technology, including transformation of social institutions, impact of legislation and regulation, electronic commerce, barriers to information technology diffusion, and effective use of technology in education. This element will emphasize finding ways to ensure that all Americans have the education they need to take advantage of large numbers of high-wage jobs created in the new economy.

One area that highlights the importance of these three areas is our ongoing work on the human genome. By providing fundamental advances in computing, the initiative will enable progression from sequencing of the human genome all the way to design of new drugs. It will also enhance our ability to address the important social issues that are raised by these breakthrough discoveries, such as genetic privacy.

Information technology is our largest R&D initiative for FY 2000, but OSTP also played a critical role in developing coordinated, interagency budgets and policies in the areas of the plant genome, food safety, emerging infectious disease, sustainable development, critical infrastructure protection, educational research, as well as others.

OSTP Budget Request

I ask today for your continued support of OSTP's role in coordinating S&T policy for the Executive Branch and for our Nation at large. OSTP's budget request of $5.2 million and 40 FTEs for FY2000 represents an increase in budget authority of less than 3.5 percent and an increase of one in the FTE level. These additional resources are essential to continue to provide the highest quality of work across our broad spectrum of responsibilities.


Mr. Chairman and Members of the Committee, I hope that this brief overview, combined with my written statement, has conveyed to you the extent of this Administration's commitment to advancing S&T in the national interest, and the importance of OSTP's role in that enterprise.

Regardless of party affiliation, in the end we can all agree that investments in S&T are investments in our Nation's future. I look forward to achieving bipartisan support for a national S&T strategy that will combine the resources of industry, academia, non-profit organizations, and all levels of government to advance knowledge, promote education, strengthen institutions, and develop human potential.

I ask not only for your support for OSTP's Fiscal Year 2000 budget request, but also want you to know how much I appreciate the long-standing bipartisan support of the committee for OSTP and for the S&T research enterprise. I would be happy to answer any questions that you have.

Office of Science and Technology Policy
1600 Pennsylvania Ave, N.W
Washington, DC 20502

1999 OSTP Speeches

OSTP Statements in Honor of George Brown

Remarks By Chief Of Staff John Podesta

Summit on Innovation: Federal Policy for the New Millennium

Nobel Laureates Reception

Understanding the Digital Economy:

Mount Sinai Commencement Ceremonies

Presidential Awards for Excellence in Science, Math, and Engineering Mentoring

The National Forensic Science Consortium

Summit on Women in Engineering

Federal Research Partnership With Universities

Regional Meeting on Government-University Partnership Purdue University

Town Hall Meeting on the Proposed Federal Research Misconduct Policy

Mount Sinai Commencement Ceremonies

Remarks By Neal Lane at Zuckerman Lecture

Sea-Space Symposium National Academy of Sciences

Symposium on International Models for R&D Budget Coordination and Priority Setting

Keynote Address Institute of Navigation

1999 National Geo-Data Forum

Regional Meeting on Government-University Partnership

Science and Technology Forum

Civilian Research & Development Foundation Symposium

Civilian Research and Development Oral Statement

National Bioethics Advisory Commission (NBAC)

International Mathematical Olympiad 2001 USA

Remarks to the U.S.-China Water Resources Workshop

National Association of State Universities

President's Remarks during National Medal of Science & Technology

Dr. Lane's House Basic Research committee Testimony

Remarks by Dr. Neal Lane at the AAAS Annual R&D Colloquium, April 14, 1999

Neal Lane's Testimony on Science, Technology and Space

Dr. Lane's Senate FY2000 Budget Testimony

Dr. Lane's House FY2000 Budget Testimony

Administration Testimony on H.R. 354

Neal Lane's Remarks at the PNGV Awards Ceremony

Improving Federal Laboratories to Meet the Challenges of the 21st Century

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