IT Budget Busters?

Defense, security would gain, but other areas would take hits.

Working with the largest deficit in U.S. history, the Bush administration is proposing spending boosts on IT and research for 2005. The lions share of the budget increase is directed at defense and security, including a doubling of the Department of Homeland Securitys funds from its creation in 2001, but it would leave some civilian research and development initiatives looking at cuts.

Technology and science programs at the Department of Energy and Department of Commerce would take major hits. The White House would eliminate two technology grant initiatives from Commerce: the ATP (Advanced Technology Program), run by the National Institute of Standards and Technology, and the TOP (Technology Opportunities Program), run by the National Telecommunications and Information Administration.

The ATP loss would be a blow to cutting-edge R&D, industry experts warned. The program was designed to promote public and private partnerships to spread the costs and risks of research that transcends immediate commercialization. As Wall Street pressures corporations to focus on short-term profitability, the ATP is critical for long-range projects, said David Peyton, director of technology policy at the National Association of Manufacturers, in Washington. "We certainly are happy to see money going into research and development at DHS and DOD [Department of Defense]. But in the middle of the picture, weve got one area that continues to be shortchanged," Peyton said, noting the cuts in advanced-technology funding.

If Congress does not reinstate the ATP for 2005, some long-range IT research projects already under way will likely be curtailed. Starthis Inc., in Arlington Heights, Ill., may not be able to complete a three-year project supported by a $2 million grant awarded by ATP last year. "This grant is vital for the activities that were performing," said David Naylor, Starthis president and CEO. "Projects that get funded tend to be longer-term activities than people would typically fund from other sources of capital. The payoff is going to come two, three or four years down the road."

Starthis is developing software that will let engineers at manufacturing plants reconfigure their operations quickly for changing project lines. Typically, a plant is configured to perform a single set of operations, and plant engineers are trained to use one kind of control program, Naylor said. Part of the project would design a testbed to give manufacturers more confidence in new ways of reconfiguring plants.

NTIAs TOP typically supports smaller-scale efforts, often at universities, but beneficiaries said they are no less reliant on the funding.

The University of Alaska Museum, in Fairbanks, has received two TOP awards, totaling more than $800 million, to create an electronic catalog of museum objects that will be linked to resources in the universitys library and archives. One goal is to bring better educational opportunities, based on visual learning skills, to some of Alaskas most remote villages, said Terry Dickey, museum education coordinator. "The funding from the Department of Commerce is absolutely critical to the kind of work that we are trying to do here in Fairbanks," Dickey said. "TOP has been very supportive in trying to solve the urban and rural technology divide. Technology can help us bridge this gap if we have the right tools."

The White House plan to cut the Commerce Departments ATP and TOP programs—and to emphasize technology R&D at defense and security agencies—reflects the administrations preoccupation with the threat of terrorism. At DHS, much of the increased funding on research would go toward biotechnology, but disproportionate spending on biotechnology in comparison with IT is nothing new, sources said.

"Weve had a situation develop over 20 to 25 years where Congress has been willing to fund biomedicine generously and has not been willing to fund other endeavors," Peyton said. "Many of us do think that an imbalance has grown up over time."

This is not the first time the Bush administration has sought to cut the ATP, and longtime observers said there will likely be a battle in Congress to retain it.