Science Community Is Mixed On Clinton's Economic Plan

While some experts see virtue in the new president's technology policy, others warn of hidden probems High-technology company executives and association officials, along with leading scientists and others in the United States research and development community, are largely upbeat in their initial responses to President Bill Clinton's economic program and his ambitious effort to redirect U.S. technology policy. At the same time, several science and technology policy-watchers interviewed by The Scientist say they will need further details about the administration's science and technology initiatives, including specific budget figures, before they can offer a more thorough assessment of the Clinton plan. The Clinton administration has proposed the following new initiatives in its technology policy, as presented in a White House policy paper, "Technology for America's Economic Growth" (released on February 22): Research and Experimentation Tax Credit: The administration is calling for permanent extension of this tax credit, which would apply to qualified research expenditures paid or incurred after June 30, 1992. Information Infrastructure: Includes implementing the High- Performance Computing and Communications Program, to assist development of more powerful supercomputers, faster computer networks, and more sophisticated hardware; also, creating an interagency task force on information infrastructure; providing funds for networking pilot projects; and promoting dissemination of federal government information. Advanced Manufacturing Technology: To provide increased federal funding for advanced manufacturing R&D, particularly to consortia such as SEMATECH; also, supporting "agile manufacturing," facilitating more flexible production; creating a national network of manufacturing centers; and promoting environmentally conscious manufacturing. Technology for Education and Training: Includes expanding access to Internet and developing high-speed National Research and Educational Network (NREN); also enhancing programs being developed through Federal Coordinating Council for Science, Engineering, and Technology (FCCSET) to improve the teaching of science, mathematics, and engineering at all levels. "I guess at this stage you could say there's a lot of excitement," says Fred W. Weingarten, executive director of the Washington, D.C.-based Computing Research Association, which has been distributing to its members--mainly university computer scientists--information about Clinton's proposals. "They're reading it, and they're talking about it on the [Inter]net." But Weingarten adds that "there are still a lot of unanswered questions about how exactly it would be organized, what the funding would be." Clinton's technology plan--emphasizing increased government assistance for the development of advanced industrial technologies--is estimated to cost about $17 billion over the next four years. It may amount to the most far-reaching R&D policy initiative since 1954, when the Eisenhower administration directed federal agencies to help support basic research. According to White House science and technology adviser John H. Gibbons, "The nation urgently needs improved strategies for government/industry cooperation in the support of industrial technology. We cannot afford to wait for investments in defense and space to trickle down to civilian industry." Key elements of the administration's technology policy include: making the research and experimentation tax credit permanent; accelerating efforts to create a national "information infrastructure" through development of more powerful computers and faster computer networks; directing federal laboratories to undertake more R&D partnerships with private industry; increasing funding for advanced manufacturing consortia, along with creating a national network of manufacturing extension centers; providing government support to assist the development of a new generation of efficient, nonpolluting automobiles; and improving technology for use in education and training. A White House policy paper spelling out the technology plan contends that "this new policy will result in significantly more federal R&D resources going to (pre-competitive) projects of commercial relevance. It will also result in federal programs that go beyond R&D, where appropriate, to promote the broad application of new technology and know-how." The announcement of the new technology policy on February 22-- during a trip by Clinton and Vice President Al Gore to a computer firm in California's Silicon Valley and a Boeing aircraft plant near Seattle--came less than a week after Clinton, in a speech to Congress, presented his overall economic plan, including proposed funding increases for certain research programs along with cutbacks for others. Clinton administration is proposing additional federal funding (amounts listed are the requested total increases over current projected budgets for fiscal years 1994-97): NSF--including support for more "strategic research." Clinton also requesting $207 million supplemental appropriation for current fiscal year. $2.297 billion NIH--including HIV/AIDS, women's health, and other NIH research; also, immunizations and other public health initiatives. (Not yet specified how much of this total will go to biomedical research.) $8.182 billion NIST--for Advanced Technology Program; manufacturing extension centers; other R&D to assist industry. $1.306 billion FCCSET research initiatives (climate, advanced supercomputers and networks, math and science education, materials processing, biotechnology, advanced manufacturing). $1.206 billion High-performance computing and networks (NSF, NIH, NIST, and NASA). $ 784 million "Information highways"--Commerce Department (for telecommunications demonstration projects). $ 275 million Industry/government civilian research at DOE laboratories. $ 180 million Advanced Neutron Source--for biomedical, materials, and other applied research (to be constructed at Oak Ridge, Tenn.). $ 420 million Tokamak Physics Experiment--for fusion energy research (to be constructed at Princeton, N.J.). $ 210 million According to an analysis of Clinton's plan prepared by the House Committee on Science, Space, and Technology, "S&T programs are relatively unscathed in the deficit reduction package. Of the $54 billion in non-defense discretionary reductions which are identified, less than 2 percent (net) are in the S&T area." At the same time, the committee analysis says, S&T programs are an important component of the additional "investment" spending proposed by Clinton. "Out of approximately $100 billion in spending incentives for FY [fiscal years] 1994-1997, over 10 percent are in the S&T area.... If all these investments were in fact funded, they would probably come close to restoring a 50:50 civilian/military R&D ratio by FY 1997." Currently, the civilian share of the total federal R&D budget is about 41 percent. The panel's chairman, Rep. George E. Brown Jr. (D-Calif.), said in releasing the analysis that he looks forward to working with Clinton on the S&T initiatives: "The administration clearly is committed to science, space, and technology as critical components of a long-term investment strategy aimed at job creation and sustained economic growth." However, the science committee's ranking Republican, Rep. Robert S. Walker of Pennsylvania--reflecting the views of other conservative-oriented critics in Congress, private industry, and here--says he is concerned about several aspects of Clinton's plan. "My principal concern about the package is its endorsement of overt government participation in technology development ... where we are now going to have government involved in commercial applications of one kind or another, and where you have government playing a more substantive role in picking technology winners and losers," Walker says. Also, he says, "I believe that a substantial part of the problem that we face is as a result of excessive litigation, excessive regulation, and excessive taxation in the technology field. And until we deal with those issues, we are not likely to end up with a global competitiveness posture which is satisfactory." Clinton's proposals have drawn statements of support--though not unqualified endorsement--from leaders of several R&D-intensive industries, such as aerospace, computers, and electronics, and bio- technology. But there have also been complaints from some sectors--such as the pharmaceutical industry, which is concerned over possible moves to impose government price controls on prescription drugs as part of an overall effort to deal with spiraling health care costs. J. Richard Iverson, president of the American Electronics Association--a group based in Santa Clara, Calif., that represents about 3,000 high-tech companies across the U.S.--said in a press statement that "we applaud the president's leadership in presenting a long-term, serious plan to get the economy moving again. Like everyone we have concerns about the impact of some of the tax provisions, especially those related to foreign tax issues. However, on balance, the package is a significant step forward." Major programs in which the Clinton administration is proposing federal funding cutbacks. Space station--Undertaking fourth redesign of project in order to save $2.126 billion during 1994-97. Superconducting supercollider--Administration proposing $640 million for fiscal 1994, or $70 million cutback from previously projected budget. However, stretch-out of SSC completion over four years will raise total cost by $1.770 billion. Indirect costs--Seeking to save $1.2 billion over next four years by capping overhead costs of university research grants. Nuclear reactor research--Savings of $820 billion from phasing out advanced reactor program. Martha Sloan, president of the Institute of Electrical and Electronics Engineers, an association with about 250,000 members in the United States, says Clinton's technology policy and its emphasis on aiding U.S. high-tech companies shows that "the whole attitude of the administration is very different from the previous one.... " Adds Sloan, who is a professor of electrical engineering at Michigan Technological University in Houghton, Mich.: "His visit to Silicon Valley was very positive. The whole [area of] high- speed computing and high-speed communication is certainly a very valuable initiative, and I think it's great." Don Fuqua, president of the Washington, D.C.-based Aerospace Industries Association, said in a statement that "we are encouraged by the president's statement that he will give special attention to the aerospace industry, which he singled out as one that is of critical importance." Another industry group that has come out in support of Clinton's economic package and technology policy is BIO--recently formed through the merger of the Industrial Biotechnology Association (IBA) and the Association of Biotechnology Companies (ABC)--also based in Washington. The group's president, Carl Feldbaum, said in a press statement that he believes Clinton "fully appreciates how government actions can strengthen or strangle the development of a high-technology-based industry such as biotechnology." He specifically cited Clinton's support for making the research and experimentation tax credit permanent, for active R&D partnerships between industry and government, and for what Feldbaum called "a regulatory policy that encourages innovations and achieves social objectives efficiently." At the same time, however, Feldbaum warned that "the government could destroy biotechnology through counterproductive policies such as imposing controls on the introductory prices of new biopharmaceuticals. If companies are not able to generate a reasonable return on these types of long-term, high-risk investments, then it will be impossible to attract the venture capital that has been the lifeblood of the biotechnology industry in the United States." David L. Winter, president and chief operating officer of GenPharm International, a biotechnology company based in Mountain View, Calif., says he believes it is "really much too early to tell right now" what kind of longer-term impact Clinton's initiatives may have on the biotech industry. With regard to the administration's proposal for making the research and experimentation tax credit permanent, Winter says: "Any tax credit in this area helps us, there's no question. We're just totally R&D-dependent." Overall, the GenPharm executive says of Clinton's economic program and technology policy: "We're very pleased that the administration is saying some of the right words. What we're concerned about is that the biotech industry be so wrapped into the pharmaceutical situation that it's not looked at as a high- tech field distinct from the pharmaceutical industry, with its own problems and needs." With S&T "megaprojects," the administration has decided to propose stretching out for another four years--until 2003-- completion of the superconducting supercollider, and also undertaking a fourth redesign of the space station. The SSC stretch-out will trim near-term outlays but result in raising the project's final cost from $8.3 billion to roughly $10 billion, while redesign of the space station is aimed at reducing costs of the project by $2.1 billion over the next four years. Although the administration's main focus has been on technology, it has also called for sustained federal funding of basic research. Presidential science adviser Gibbons told the House science committee at a March 4 hearing: "None of the innovations in technology proposed in our initiative will be funded at the expense of basic science. Our budget proposal ensures that support for basic science remains strong and that stable funding is provided for projects that require continuity. We will not allow short-term fluctuations in funding levels to destroy critical research teams that have taken years to assemble." To underscore this commitment to basic research, the administration is requesting a fiscal year 1993 supplemental appropriation of $207 million for the National Science Foundation, along with further budget increases for NSF--over previously projected levels--totaling $2.297 billion during the next four years. With regard to biomedical research supported primarily by the National Institutes of Health, Clinton's plan would involve spending an additional $8.182 billion in 1994-97 on HIV/AIDS, women's health, and other NIH research, along with child immunizations and other public health initiatives. No specific figures were provided on the portion of this overall amount going to research. Shu Chien, president of the Bethesda, Md.-based Federation of American Societies for Experimental Biology (FASEB), says that "I applaud the goal of emphasizing basic research, and also the point of the need for continuity--stable funding." Chien, a professor of bioengineering and medicine at the University of California, San Diego, says FASEB will be urging Congress to provide enough additional funding to offset the $217 million cut it imposed on NIH's budget last year. As for how he views the current research funding climate on Capitol Hill, Chien says: "It's still hard to assess. I think we need to do a lot more work, because there are a lot of new members of Congress."

Science Community Is Mixed On Clinton's Economic Plan

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