Technology Administration
TESTIMONY

PHILLIP J. BOND
UNDER SECRETARY FOR TECHNOLOGY
U.S. DEPARTMENT OF COMMERCE

BEFORE THE
HOUSE SCIENCE COMMITTEE

February 11, 2004

Mr. Chairman and members of the Committee, I am pleased to join with my fellow Administration colleagues in your review of the President’s Fiscal Year (FY) 2005 budget request for science and technology programs. As you have already heard from Dr. Marburger, the President’s budget focuses on leadership in science and technology by calling for an unprecedented $132 billion investment in research and development (R&D) that represents a 44% increase since President Bush took office.

I want to thank the Committee, especially Chairman Boehlert, for your continued support and leadership on innovation issues. You have been a constant and strong voice for the science and technology community – especially in the areas of basic research and nanotechnology. I look forward to continuing to work together to ensure America remains the world leader in the science and technology field.

The President’s focus in the area of science and technology is reflected in the Department of Commerce R&D portfolio. The Commerce budget maintains substantial R&D investments in our two primary technical research bureaus, the Technology Administration (TA) and the National Oceanic and Atmospheric Administration (NOAA). Through these two bureaus, the Department of Commerce is engaged in critical cutting-edge research in high-priority areas of technological innovation such as nanotechnology, information technology, and manufacturing technology.

The Fiscal Year 2005 President’s budget request for TA is $529.8 million in total discretionary budget authority, which includes $8.3 million for the Office of Technology Policy and $521.5 million for the National Institute of Standards and Technology (NIST). The Fiscal Year 2005 President’s budget request for NOAA is $3.4 billion in total discretionary budget authority.

Additionally, both TA and NOAA have developed strong collaborations with other Federal science and technology agency partners to develop interagency activities and coordinate major R&D initiatives in these high-priority areas. Given the budget pressures facing our Nation, this approach is necessary in order to fund important Federal science and technology programs. Working with my fellow panelists and others throughout the Administration, at the Department of Commerce, we have been engaged in extending efforts to cross agency boundaries to strengthen our research and development capabilities.

Secretary Evans is proud that the Department has been able to play a leadership role in interagency coordination, especially through the President’s National Science and Technology Council (NSTC). For example, I co-chair the NSTC Committee on Technology and NOAA Administrator Admiral Lautenbacher chairs the NSTC Committee on Environment and Natural Resources. The Secretary has tasked us to continue developing partnership models inside and outside of our building to leverage the nation’s science and technology enterprise. By developing new methods for collaboration within Commerce and with other agencies, the Administration can maximize the best use of our scarce Federal dollars.

Mr. Chairman, in my time with you today, I wish to review the Department’s science and technology budget priorities for the upcoming fiscal year, as reflected in our TA and NOAA requests. Since I know that the Committee intends to hold a separate hearing in the near future just on the NOAA budget with Admiral Lautenbacher, I will give a short summary of the NOAA FY 2005 priorities before discussing the proposed budget priorities for the Technology Administration.

The Commerce budget priorities reflect the Department’s continuing commitment to creating conditions for both economic growth and employment opportunity by promoting innovation, entrepreneurship, competitiveness, and stewardship. To enhance these services, resources have been shifted from various lower priority programs. To be sure, the Administration has had to make some very tough choices and some otherwise well-managed and successful programs could not be given a high priority for funding. The Department, however, has an ambitious agenda to use our science and technology resources and we look forward to working with you as these proposals move through the legislative process.

National Oceanic and Atmospheric Administration (NOAA)

The President’s Fiscal Year 2005 budget request totals $3.4 billion for NOAA, including program increases of $146.9 million over the FY 2004 request. NOAA believes that the proposed budget maintains and enhances the programs that enable our scientific understanding of the oceans and atmosphere, while also sustaining the Nation’s environmental health and economic vitality. The budget request allows NOAA to develop the science necessary to improve weather, water and ecosystem forecasts of the future, as well as give policymakers the data they need to make important decisions related to climate change.

The Fiscal Year 2005 budget request supports the NOAA core activities, including its fisheries and oceans programs, climate research activities, weather forecasting capabilities, and the satellite infrastructure necessary to support these functions. In addition, the request continues to focus on maintenance and safety issues associated with NOAA facilities, vessels, and aircraft.

In order to meet international standards for research surveys and substantially improve the quality of fishery research, NOAA requests an investment of $34 million to complete NOAA’s third fisheries survey vessel. NOAA will also seek to expand its focus on climate research by devoting $19 million of new funding to address the critical knowledge gaps identified in the recently released Climate Change Science Program Strategic Plan. Finally, NOAA will continue to improve its weather forecasting abilities by requesting funding to expand air quality forecasts nationwide and investing in improved long-range weather forecasting. The Department will also request an additional $56 million for the continued development of next-generation geosynchronous and polar orbiting satellite programs.

Some additional highlights of the NOAA FY 2005 budget proposal include:

• Weather and Water - to serve society’s needs for weather and water information – The $1.41 billion request is an increase of $58.1 million over base goal levels.
• Climate - to understand climate variability and change to enhance society’s ability to plan and respond -- The $369.3 million request is an increase of $28.7 million over base goal levels.
• Ecosystems - to protect, restore and manage the use of coastal and ocean resources through ecosystem approach to management -- The $1.158 billion request is an increase of $145.3 million over base goal levels.
• Commerce and Transportation - support the Nation’s commerce with information for safe, efficient and environmentally sound transportation -- NOAA is requesting $252.1 million, an increase of $23.1 million over base levels, to address this goal.

Technology Administration (TA)

TA’s Fiscal Year 2005 funding priorities for its $529.8 million budget support programs that promote U.S. industries to meet the President’s national priorities of fostering economic growth, providing for a secure homeland and defense, and winning the war on terrorism. TA meets these priorities by helping to shape an economic climate that leads to innovation and growth; investing in the NIST core mission of measurements, standards, research, and services to industry; and supplying NIST scientists with the laboratory equipment and facilities necessary for world-class research.

TA’s NIST is well-known to the members of this Committee, but the world-class research of its award-winning scientists and engineers can often be overlooked because the NIST contributions are often made at the beginning of the R&D process – invaluable contributions that pave the way for the rapid commercialization needed to advance our economy.

NIST has been often referred to as the “crown jewel” of our Federal laboratory system. It is a well-deserved title because there is no other Federal lab that industry relies on as much as NIST. Industry needs the critical NIST metrology research standards for measurement, testing, analysis, and protocols that allow for interoperable products to be created, new products to be developed based on consensus standards, assurances that products meet conformity assessment requirements, and the ability to effectively bring their innovation from the laboratory to the marketplace.

NIST is an important component of the TA mission, performing world-class research to enhance productivity, facilitate trade, and improve the quality of life. Given the rapidly accelerating pace of technology development and change during the past decade, NIST has had to remain agile and flexible in order to make the best use of its resources. One telling measure of NIST’s success is that nearly 30 economic impact studies by independent experts calculate that every dollar invested in NIST measurement and standards programs returns at least three dollars in economic benefits to the Nation. Indeed, most NIST programs return substantially more.

The President’s request for NIST for FY 2005 reflects his appreciation of the role technology plays in both our economic security and our homeland security while holding the line on non-defense spending. This request – which is 5 percent more than his request for FY 2004 -- includes $417.5 million for the NIST laboratories and $5.4 million for the Baldrige National Quality Program. Another $59.4 million is requested for badly needed facilities maintenance and upgrades.

The Manufacturing Extension Partnership (MEP) requests $39.2 million to help small U.S. manufacturers become more competitive and productive. Through its network of centers, MEP makes it possible for small U.S. firm to tap into the knowledge, skill sets, and experience of leading manufacturing, business, and technology specialists from across the country. With MEP as a resource, American manufacturers have at their disposal the latest and most efficient technologies, processes and business practices.

Recognizing the importance of manufacturing to our economy, Secretary Evans recently released a comprehensive manufacturing strategy aimed at improving the climate for manufacturers in a global marketplace. With the Manufacturing Index rising to its highest level in nearly 20 years this past December and new orders at its highest level since 1950, it appears America’s manufacturing sector is expanding and moving in the right direction, but there is more work to be done. President Bush will not rest until every American who wants to work can find a job. So, the Secretary has asked all bureaus within the Department of Commerce to be engaged in support of manufacturers. A key part of the manufacturing strategy outlined in Secretary’s Evans’ report includes stable support for the MEP and new steps to review and improve its efficiency. To emphasize competition in global markets, for example, the Department is exploring ways to team MEP field agents will team directly with trade promotion specialists in the International Trade Administration (ITA) to leverage ITA’s connections and in-depth knowledge of industrial sectors. The report also recommends that MEP hold a recompetition of all centers that focuses on improving effectiveness and efficiency.

There is no funding proposed for the Advanced Technology Program (ATP) in the Fiscal Year 2005 budget. The total NIST request of $521.5 million is $89 million less than our FY 2004 appropriation. While there is an increase in the FY 2005 funding request for the NIST laboratories, the overall request for NIST is a net decrease due to the termination of funding for the ATP.

It is also important to note that a recent trend of shortfalls in funding for the NIST laboratories threatens to undermine the very core measurements and standards infrastructure upon which our nation’s scientific, technological and industrial enterprises depend. Accordingly, the President’s request for NIST incorporates several major new R&D initiatives, including $15.6 million to support advanced manufacturing, $18.6 million for work related to public safety and security, and $16.2 million to develop advanced measurement capabilities to meet the needs of 21st century science and industry.

Last June the President’s Science Advisor laid out the Administration’s priorities for science and technology R&D in the FY 2005 budget. These NIST R&D initiatives are an excellent fit with those priorities –

• Under R&D for Combating Terrorism, the NIST public safety proposal includes a funding increase to advance national measurement capabilities in the detection of chemical, biological, radiological, nuclear, or explosive materials; in biometric identification, and in cyber security. This work is closely coordinated with the Department of Homeland Security and other national security agencies.
• In the rapidly developing field of Nanotechnology, the NIST advanced manufacturing proposal encompasses a wide array of measurement tools, devices, measurement technologies, standards, and data to provide a critical measurement and standards infrastructure for leading-edge developments in nanotechnology manufacturing areas. These are assignments directly fulfilling NIST’s mission and in line with NIST’s role in both the National Nanotechnology Initiative and the 21st Century Nanotechnology Research and Development Act (P.L. No 108-153) that was spearheaded by this Committee.
• In line with the Administration’s priority emphasis on Molecular-level Understanding of Life Processes, NIST’s Measurement Science initiative includes the development of measurements and test methods that will be critical to developments in biosystems and health, such as work in the measurement and analysis of gene and protein expression, nanobiotechnology and DNA and protein markers.
• In Networking and Information Technology, NIST initiatives in Public Safety and Advanced Measurement include IT research ranging from improvements in the state of the art of computer and network security – especially wireless and industrial control systems – to cutting-edge research in the emerging field of quantum information science, which promises to lead to advanced information processing systems with phenomenal increases in information storage and processing speeds.
• NIST also maintains a substantial effort in the areas of Environment and Energy, including unique research facilities and expertise related to various aspects of hydrogen fuel cells, covering the entire spectrum from fundamental science to successful commercialization.

NIST is also requesting an FY 2005 funding increase to address an issue increasingly important to the U.S. economy – equipping U.S. manufacturers with the necessary tools to track and effectively respond to the development of international technical standards, particularly where they impact the access of U.S. manufacturers to international markets.

Our formal submission gives you additional details of these and other research initiatives, but I would like to draw the Committee’s attention in particular to two very important facilities issues at NIST.

This budget includes a proposed initiative for $8.3 million for capability improvements at the NIST Center for Neutron Research. The NCNR is one of NIST’s truly unique facilities and an extraordinarily valuable resource for the Nation’s research community. Neutron beams – especially the low-energy “cold” beams available at NCNR – have become an indispensable research tool in materials science, biotechnology, chemistry, engineering, and physics. The NCNR has been cited as the highest performing and most used neutron facility in the United States. In fact, it draws nearly twice the number of users at the Nation’s other three neutron sources combined.

Success, however, has strained the resources of the NCNR, which now serves over four times the number of users predicted in 1987 when it was first funded. Fuel- and fuel-related costs have spiraled. As a result, NIST’s ability to operate the facility to its maximum utility and to meet the growing demands of the U.S. research community has been seriously curtailed.

The NCNR initiative will not only address this serious problem in operating expenses but also allow NIST to expand significantly its literally irreplaceable service to the Nation’s industrial and academic researchers with new instrumentation and analysis methods. The types of research that would benefit include:

• The study of proteins, that could lead to the development of new drug therapies, new anti-toxins and improved vaccines;
• The development of ultra-high sensitivity detection methods for environmental pollutants as well as explosives and other terrorist materials;
• The study of the workings of complex cellular level biological systems; and
• The development of more efficient fuel cells, batteries and semiconductors.

The FY 2005 budget also includes a $25.7 million initiative primarily devoted to pressing issues of facility obsolescence at NIST’s Boulder, Colorado, laboratories.

Years of inadequate funding for maintenance and upgrades have left the NIST laboratories in Boulder, Colorado, severely deteriorated and obsolete. That these facilities have managed to provide U.S. researchers one of the world’s most accurate and precise time and frequency standards, for example, or the world’s most accurate voltage standards, is a tribute to the ingenuity and patience of the NIST staff, but it comes at a price.

• Poor heating and air-conditioning controls have prevented on-time delivery of specialized superconducting integrated circuit chips to defense contractors, instrument makers and other NIST clients.
• Researchers making sophisticated measurements of magnetic fields – important work done in support of the data storage industry – often must wait an hour or more for lab temperatures to stabilize sufficiently to work
• Outages, power spikes, brownouts, and other problems are damaging sensitive equipment, delaying research program, and necessitating expensive repairs.
  NIST conservatively estimates a 10 percent loss in productivity at the Boulder Labs purely due to environmental problems in obsolete buildings. And that does not begin to touch on the staff safety issues.

We appreciate that this Committee has long been a strong advocate for NIST. I am grateful that you understand that an investment in NIST returns great benefits to our nation as the only Federal laboratory with the express mission of working with industry. I look forward to working with you in addressing NIST’s needs so that its world-class scientists and engineers can continue to serve our nation effectively.

Conclusion

Mr. Chairman, the Department of Commerce’s R&D portfolio is not only strengthening our science and technology portfolio but also strengthening our Nation’s economy. The past few weeks have confirmed that America's economy is strong, and growing stronger. The nation's unemployment rate fell to 5.6 percent in January, the fourth consecutive monthly decline, and we added 112,000 new jobs, the largest single month increase since December of 2000. Overall, the nation has added 366,000 jobs in the past five months. There's more evidence of a strengthening economy. Manufacturers report new orders. GDP rose at a 6.1 percent in the second half of 2003, the fastest pace in nearly 20 years. Inflation remains low, and our nation's home ownership rate just reached an all-time high. All of these are signs that our economic recovery is becoming a lasting expansion. The President has made economic recovery a national priority and I know the members of this Committee are equally as passionate about this issue. At the Department of Commerce we are fully engaged in economic recovery by providing leadership in science and technology, with TA and NOAA leading our R&D efforts.