Dr. M.R.C. Greenwood
Associate Director for Science
Office of Science and Technology Policy
Executive Office of the President
House Committee on Science, Space, and Technology
September 21, 1994
Thank you, Mr. Chairman and Members of the Committee, for this opportunity to appear before you on behalf of the Administration. I commend you for holding this hearing on academic earmarks and furthering the national discussion of how best to support and maintain the world's leading research and development enterprise. The knowledge derived from America's research and technological innovation can keep us in the forefront of international economic competition while maintaining a strong national security position, improving our environment, creating intellectual capacity, providing good jobs for our people, and improving the quality of life for our citizens.
In a letter to Jack Gibbons, Director of the Office of Science and Technology Policy, the Committee asked that the Administration appear today to respond to three specific Questions:
1. "What is the Administration's position on academic earmarking?"
2. "What effect do such earmarks have on priority setting among research programs in the Federal government?" and
3. "What steps has the Administration taken to limit or end such earmarks?"
Today, I will present the Administration's response to each of these questions.
The Administration's Position
First, let me take a moment to describe the fiscal dimension of this issue. On August 3, 1994 The Chronicle of Higher Education reviewed trends in academic earmarking from 1988 to 1994. Congressional earmarks increased from $225 million in 1988 to $763 million in 1993. That is, earmarking more than tripled in a five year period. In 1994, academic earmarks decreased modestly to $651 million, the first significant decrease in more than a decade. This is the right trend and we encourage Congress to continue it.
The primary problem with academic earmarking is that it is not carried out within the context of national, agency, or Congressional priority setting. With limited resources available to appropriators, earmarks divert funds from key research programs to programs that are not as
essential to the achievement of national goals. Further, because earmarking is not a competitive process for recipients, earmarking may result in a generally lower quality scientific product.
Much of the tremendous success of American science and technology is directly attributable to the process of merit-based peer review funding that has developed over the years. In the United States, we have developed a unique and extraordinary process of competition that rests on excellence. We encourage investigator-initiated research that allows unique ideas and individual creativity to flourish. We also encourage mission-oriented research that allows agencies to pursue research programs that supports the accomplishment of their missions. Our success and leadership in science and technology is a direct derivative of this process. The practice of earmarking runs counter to the very process of research funding that has assured excellence in American science. To destroy the system would be a national tragedy.
The General Accounting Office has examined the issue of federal research funding and the system of peer review in a series of reports. In the most recent of these studies, dated June, 1994, the GAO found that the "peer review processes appear to be working reasonably well..." The report further assures us that, "...contrary to what some critics have asserted, reviewers were not more likely to come from elite institutions than were applicants, and there were few differences in region of origin." The GAO findings thus support the contention that the system of competitive funding underlying federal research programs is generally equitable and unbiased.
There are essentially two types of academic earmarking, both of which hinder the achievement of Administration and Congressional objectives, and the fulfillment of Agency missions. Certain earmarks direct funding to a specific recipient institution or research program and identify a specific issue to be studied, or a type of facility to be constructed. Such earmarks often may interfere with goals and strategies defined by Congress and the Administration. Furthermore, recipient-specific earmarking is the least likely to yield the best scientific results because such projects undergo no competitive process of selection.
The second form of academic earmarking provides funding for facilities or programs related to specific issues but does not direct the monies to a specific recipient. Such earmarks allow agencies to select the most qualified applicant to receive the earmarked funds and some level of peer review and competition is possible. The problem, of course, is that the earmark demands activities and programs that may not be consistent with the agency missions. Thus, both types of earmarks are likely to distort agency programs and the NSTC interagency process we are working so hard to develop.
A charitable view of earmarking is to view it in part as a symptom of the success of U.S. science and technology. Academic earmarking results from the fact that academic institutions with quality science and technology programs historically have gained prestige, offered superior training to their students, and spawned local industries, leading to economic prosperity for local districts. Thus, it has become dogma that local economic and intellectual prosperity is associated with the competitiveness of local universities. It is understandable, then, that members of Congress would advocate vigorously for Federal funding for their academic institutions.
The Effects of Earmarking on National Priority Setting
Perhaps the strongest argument against academic earmarking is that earmarks interfere with established policy and budget priorities on all levels: National, Congressional, and agency. As mentioned earlier, earmarks subvert both the priority-setting and peer review systems that have served our nation so well. On an agency level, earmarking diverts funding from projects that have been identified as essential to the achievement of agency and national goals. On a Congressional level, earmarking may run counter to the desires of the authorizing committees. On a national level, the practice of earmarking reduces the amount of support available for the best competitive projects and detracts from projects that address our national goals. In general, then, the process of earmarking interferes with progress toward goals, erodes the structure of our competitive process, and inadvertently may lower the quality of our research; such results ultimately may discourage young scientists from pursuing research careers.
Administration Efforts to Limit Academic Earmarking
In the recently released Science in the National Interest, The President and Vice President reminded us of an important tenet of our future which has longstanding bipartisan roots:
"America's future demands investment in our people, institutions and ideas. Science is an essential part of that investment, an endless and sustainable resource with extraordinary dividends." Furthermore..."The principal sponsors and beneficiaries of our scientific enterprise are the American people. Their continued support, rooted in the recognition of science as the foundation of a modern knowledge-based technological society, is essential. The nation's investment has yielded a scientific enterprise without peer, whether measured in terms of discoveries, citations, awards and prizes, advanced education, or contributions to industrial and informational innovation. Our scientific strength is a treasure which we must sustain and build on for the future."
In these difficult fiscal times, we must continue to ask ourselves: How well are we investing the American taxpayers' money and how can we be assured that this investment is sound? It is because of this Administration's commitment to excellence in American science and technology that we have attempted to identify those factors which contribute to our nation's excellence as well as working to overcome factors that can serve to erode our leadership in science and technology.
This Administration has taken several proactive steps to change the environment that encourages earmarks. To address the issue of the need to build science and technology capacity in regions with less standing in the research community, we support the Experimental Program to Stimulate Competitive Research (EPSCoR), a peer reviewed program with broad bipartisan support that has worked to increase both the research and scientific and technological capacity of regions of the country where local institutions' competitiveness for federal funding was in need of assistance. Programs such as EPSCoR build state, federal, interstate, and regional partnerships, and leverage resources, but preserve elements of peer review and program evaluation. In Science in the National Interest, the Administration committed itself to a goal of maintaining,
"...a strong commitment to Federal-state-industry partnerships for forging stronger links between the educational community and the workplace and for seeding merit-reviewed research program across the nation as important investments in developing research capabilities and associated educational benefits."
In addition, the clear intent of this Administration to fund research based on merit and peer review was communicated to the agencies in May, 1994 by then OMB director Leon Panetta and the President's Science and Technology Advisor, Jack Gibbons. Peer reviewed research was given the highest priority and it was expected that in each agency's FY 96 budget submissions, research subject to merit review with peer evaluation would increase and funding in areas not subjected to such review would decrease.
One other concern often advanced as motivation for earmarking is the lack of a broadbased substantial facilities and infrastructure renewal program. To address this concern, the Administration has charged the NSTC's Committee on Fundamental Science to recommend options for a multi-agency program for infrastructure renewal. This program would supplement the funds spent by the federal government on facilities through the use of indirect costs and grants. The preliminary report is due in mid Fall and the final report in February.
It is the joint task of this Administration and this Congress to sustain those policies that will give us the best assurance of future success and to take steps to eliminate practices that interfere with our leadership. The most productive approach for the country is to work together to strengthen existing peer review programs, to develop new mechanisms for ensuring broad participation in the process of research and development, and to promote excellence throughout the country. The nation's investment in science and technology research and development is so important that we must also commit ourselves to sustaining it and improving it overall for the future.
This concludes my formal remarks. I thank the Chairman and the Committee again and stand ready to answer your questions.