White House 2006 budget: More IT spending

Officials says increase shows importance of technology and science

WASHINGTON - U.S. President George Bush's budget for the government's 2006 fiscal year includes an increase in IT spending, despite cuts elsewhere, and asks the U.S. Congress to permanently extend a research and development tax credit.

Bush's 2006 budget, which cuts back or eliminates 150 government programs because of record deficits, includes a 7 percent increase in government IT spending, with the 2006 request at $65.1 billion. About 55 percent of that IT-related spending would go toward defense and domestic security programs, but Bush's request for IT funding at the National Science Foundation (NSF) is up nearly 26 percent.

Bush on Monday delivered his $2.57 trillion 2006 budget to Congress, compared to a $2.4 trillion request for 2005. The 2006 fiscal year begins Oct. 1.

Separately, Bush's science and technology budget would drop from an estimated $61.7 billion in fiscal year 2005 to $60.8 billion [b] in 2006. The science and technology budget includes programs such as space exploration, renewable energy and agricultural research, as well as technology-related research and development at the National Institute of Standards and Technology (NIST).

Spending for information security at 17 federal agencies would increase by $113 million, up more than 7 percent, if Congress approves Bush's budget. The Information Technology Association of America (ITAA), a trade group, praised Bush's IT budget.

"America must pick up the pace in science, math and engineering," ITAA President Harris Miller said in a statement. "Countries around the world have clearly signaled their intent to challenge U.S. leadership in technology. Our economic well-being depends on answering this challenge. In this regard, NSF activities loom larger than ever."

The Bush 2006 budget calls for a permanent R&D tax credit, first passed as a temporary tax credit in 1981 and extended multiple times. IT lobbying groups such as the ITAA have long called for a permanent extension of the credit, which allows U.S. companies conducting research and development activities to get a tax credit of as much as 10 percent of R&D spending.

Bush's budget would provide $27 billion through 2010 for the tax credit, officially called the Research and Experimentation Tax Credit.

Bush's 2006 budget would eliminate a NIST program, the Advanced Technology Program, that provides funding for "high-risk, high-payoff" private-sector technology R&D, according to NIST. Bush, in a televised press conference Monday, called his budget "lean."

Bush has been trying to make major cuts in the program or eliminate it since taking office in 2001, but Democrats in Congress have fought the cuts. Some critics of the program, which included funding in the 2005 budget for computer chip research and experimental wireless technologies, have called the program "corporate welfare."

Proponents of the program, including 2004 Democratic presidential nominee Senator John Kerry, say the Bush cuts would eliminate a program that helps develop important new technologies, including cost-saving advances in manufacturing. "This program provides resources to high-risk research that leads to big pay-offs," Kerry's campaign said in materials targeted to Ohio voters before the November election.

The Advanced Technology Program received an estimated $137 million in funding in the 2005 budget.

The funds in the program can be better used in other areas of NIST, said John Marburger, director of the White House Office of Science and Technology Policy. "It is not the most high-leverage activity," he said at a press conference.

Marburger defended Bush's 2006 budget as "responsible" in light of efforts to reduce the federal budget deficit, which was more than $412 billion in fiscal year 2004. "This budget is not flat, but it's pretty close," he said of the federal R&D budget. "There are some difficult cuts."

Copyright © 2005 IDG Communications, Inc.

How to choose a low-code development platform