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Dr. HARRIS. In figure I, which is also attached at the back of your document, I would like to show the 13 functional fields that we identified. These are national security, welfare, health, and so on. In this figure we show the percent of the total Federal Budget allocated to these 13 functional fields in fiscal


1969. National security amounts to about 45 percent and is first in priority. Welfare is second, with 20 percent of the total outlays allocated to it. Health is third, with 7 percent of the total outlays allocated to it. Commerce, transportation, and communication are 4.7 percent. Education and knowledge, are 3.3 percent. Agriculture is 3.2.

And the other fields all fall at 3 percent or less: International relations, labor and manpower, veterans, space, housing and community development, natural resources and environmental and general government.

I think it is important to recognize space as only 2.3 percent of the total Federal budget in 1969. Space is defined as the space mission per se,

without the NASA program areas of aircraft technology or space Mr. MOSHER. Mr. Chairman, can I interrupt just a second ? Mr. DADDARIO. Of course, anytime.

Mr. Mosher. When you are talking about Federal budget, are you talking about the budget as proposed by the President or funding as finally appropriated by the Congress?

Dr. HARRIS. As proposed by the President.
Mr. DADDARIO. Yes. While you have been interrupted.
Dr. HARRIS. Yes, sir.

Mr. DADDARIO. How does the interest on the national debt fit into this?

Mr. LEDERMAN. In our particular study, we excluded the interest on the national debt as having no function in itself, but a method of financing other functions.

Mr. DADDARIO. So we would have to take the overall budget, and deduct from it.

Dr. HARRIS. That is correct, and then that is the allocation.
Mr. DADDARIO. Then you have your list.
Dr. HARRIS. Right.

Mr. DADDARIO. One other point. Is that the only deduction we would have to consider? Have you left anything else out?

Mr. Mosher. What budget are you using; the old budget?
Mr. LEDERMAN. This is the new budget concept.

Mr. MOSHER. The new budget. Do you leave out the trust funds then, like the social security trust fund?

Dr. HARRIS. They are in the budget.
Mr. DADDARIO. The interest on the debt would be the only-

Mr. LEDERMAN. The interest on the debt and some relatively minor intragovernmental payments that are not specified in the budget as to functional field.

Mr. DADDARIO. Well, Dr. Harris, I would appreciate it if you would take a look at it just so we might know what the other items were and then we would be in pretty good shape to use these procedures.

Dr. HARRIS. Fine. We can amplify our statements and be explicit on that point.

Mr. DADDARIO. Fine. That can be done for the record, just to serve that particular purpose.

(In response to the preceding questions, the following information is presented :)

The estimated FY 1969 total outlay figure shown in the FY 1969 Budget was $186.1 billion. Modifications made to this figure for purposes of our study were: (a) interest on the National Debt ($14.4 billion) was subtracted as having no function in itself, but being a method of financing other functions; (b) special allowances of $2.0 billion were subtracted. There were requested to cover pay increases and contingencies and are not distributed by function in the Budget; (c) undistributed adjustments of $5.0 billion were subtracted. These are intragovernmental payments undistributed by function, and include the Government contribution for employee retirement, and interest received by trust funds. The resulting figure which was distributable by function was $174.8 billion.

Dr. HARRIS. Figure No. II, which is also shown on the back of your report, talks about the total Federal R. & D. budget. And now with the same 13 functional fields, it identifies the percentage of the total R. & D. budget for fiscal year 1969 that is allocated to each of these functional fields.

National security, again, emerges as the leader, with 53.1 percent of the total budget allocated to it.

Space is second, 23.4.
Health, third, 7.3.
Education and knowledge, 6.8.
Natural resources and environmental, 4.9.

All the other fields fall in the category of 2 percent or less, of the Federal R. & D. budget allocated to these functional areas.

Mr. DADDARIO. Dr. Harris, do you separate from national security R. & D. its educational activities so that they reflect themselves as would the space activities within the education and knowledge, or have you not done that?

Mr. LEDERMAN. We have not. That is included under national security, primarily because the goal statements both from the President and from the Department of Defense specified that they are predominantly for the purpose of their contribution to national security. They may also serve other very useful purposes.

Mr. DADDARIO. Well, Project Themis, then, would be within the 53.1? Dr. HARRIS. That is correct. Mr. DADDARIO. We would have to reflect our own thinking into the education and knowledge activities.

Dr. HARRIS. Yes; looking in figure III at the changing pattern from 1961 to 1969 of the total R. & D. conduct by functional field for all of those agencies that had more than 2 percent of the Federal R. & D. budget in 1969, you can see that in 1961 the percentage of the Federal R. & D. budget allocated to national security was considerably higher that it is today. There is a near mirror image of its trend when compared with the allocations of space R. & D. The space program was a very modest part of the total Federal R. & D. budget in 1961, rising to a substantial level in 1966, and decreasing since then. The national security R. & D. budget line shows a decrease from 1961 to 1966 and an increase during the latter years.

Mr. MOSHER. Doctor, are you suggesting there is some direct relationship or is that just a coincidence?


Dr. HARRIS. I was interested in the observation of the trends which in this data must add to 100 percent and therefore a higher percent of total for one field must be accompanied by a proportional reduction in another field or fields.

Mr. MOSHER. Yes.

Dr. HARRIS. I do want to emphasize that I am talking now about percentage here. I am not talking about total dollars. The actual dollars that are expended today are rather considerably more than they were in 1961, as you well know.

Mr. MOSHER. Yes.

Dr. HARRIS. The only other point I would like to make on this chart is that the percent of Federal R. & D. expenditures for health have taken over the third place position, moving above the education and knowledge line by a small amount in 1969.

For those functional fields that have less than 2 percent of the Federal R. & D. budget in 1969, it is not feasible to plot their trends from 1961 to 1969, because they are so close to each other and so close to zero. Nevertheless, there are some interesting changes to observe. In the functional field of housing and community development there has been an increase from a tenth of a percent up to three-tenths of a percent. In labor and in welfare there have been small increases. These still receive very modest R. & D. budgets. In the next figure I can show you the relationship between the Fed

I eral funds allocated to a field and the Federal R. & D. funds allocated to that field. These data are presented in terms of the percentage of total outlays allocated to research and development.

In 1961, nearly 15 percent of the functional field of national security was allocated to research and development. This had fallen to a little over 11 percent by 1969.

In the field of health, 20 percent of the outlays in 1961 were allocated to research and development. This has now fallen to about 10 percent.

In the field of education and knowledge, a larger fraction of the budget was devoted to research and development in 1961 than in 1969.

As shown in figure IV, about 9.5% of the total Federal budget was allocated to research and development in 1961 and in 1969, but there have been changes in the patterns of allocations in various fields

Now, I would like to return to page 7 of my prepared statement.
(The portions of the prepared statement not read are as follows:)

Figure I shows relative priorities among the 13 functional fields in terms of percent of total Government outlays as presented in the budget, fiscal year 1969. It shows that out of every dollar of total Government expenditures: 45 cents went for national security, 20 cents for welfare, 7 cents for health, and so on.

Figure II shows the same picture with regard to relative R. & D. priorities. It indicates that out of every Federal dollar spent on R. & D., about 53 cents was spent on national security; 23 cents on space; 7 cents on health; 7 cents on education and knowledge; 5 cents on natural resources and environmental; 2 cents on commerce, transportation and communications; about 112 cents on agriculture; and less than one-half cent each on welfare, housing and community develop

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Ball R. & D. figures discussed are R. & D. conduct expenditures. That is, actual expenditures for the conduct of R. & D., exclusive of R. & D. plant and major equipment.

ment, labor and manpower, general Government, and international relations.

Figure III shows trends in relative R. & D. fundings priorities from 1961 through 1969 by functional field and shows that:

(a) The five functional fields for which trend lines are shown making up 95.5 percent of all R. & D. expenditures in 1969.

(6) National security R. & D. is the largest program but shows a relative reduction over the 1961-69 period with a corresponding increase in space, which is in second place. This graph shows quite strikingly an almost mirror image of the trend lines for national security and for space in terms of their relative percentage of the total Federal R. & D. budget. The trend for national security R. & D. decreases and that for space increases between 1961 and 1966. Subsequently, both trend lines reversed their slopes as national security began to increase its relative position and space to decrease.

(c) The relative position of the other fields remains fairly constant except for health, which rises more quickly after 1965 and takes third position from education and knowledge in 1969.

(d) Figures for the remaining eight functional fields are shown next but trend lines are not drawn because the percentages are too low to be shown in any meaningful way on the same scale. No one of these functional fields comprises as much as 2 percent of R. & D. expenditures and the eight together comprise less than

5 percent. It should be clear from the preceding material that the order in which functional fields are ranked by total budget allocations is very different from that when ranked by research and development allocations. This is not surprising since R. & D. is less important to some functional fields than to others. Some functional fields are more science and technology limited than others.

With these data in hand, it is now feasible to determine the percentage of total outlays allocated to R. & D. for Government as a whole and the percentage of the budget of each functional field that is allocated to R. & D.

Mr. DADDARIO. Mr. Lederman, why don't you come forward and sit at the table so you won't feel inhibited, and break in at anytime you would like.

Mr. LEDERMAN. Thank you.

Dr. HARRIS. In some functional fields, the allocations for R. & D. are significantly above the Government average, and in others, below it, as shown in the following list. More than 9.5 percent

Less than 9.5 percent Space

98 Agriculture Natural Resources and

Commerce, transportation, Environmental

22 and communication --Education and knowledge----- 20 Housing and community National Security11 development

1 Health 10 Labor and manpower.

1 General government

<1 Welfare

<1 International relations. Veterans



There are a group of functional fields that are above the national average and another group of functional fields that are below.

It is understandable that R. & D. would be a higher proportion of the fields of space, natural resources, and environmental, education, and knowledge, and national security, and a lower proportion of some

a other fields such as welfare, labor, and manpower, and veterans. However, it is not clear why a higher proportion of the budgets are not allocated to R. & D. in such fields as commerce, transportation, and communication; and housing and community development. Those individuals and organizations interested in increasing the contributions of science and technology to national goals and objectives should explore the adequacy of such resources as applied to all fields, but particularly to those fields with increasing national priority that appear to be confronted by significant technical problems but which are devoting relatively small amounts of their budgets to R. & D.

In general, in those fields in which R. & D. is a higher percentage than the 9.5-percent Government average, total outlays are tending to increase faster than funding for R. & D. This leads to the allocation of a lower percentage of the increased outlays to R. & D. This pattern has been observed in the fields of national security, health, and education and knowledge, although space and natural resources and environmental have not followed the pattern. On the other hand, in those fields in which R. & D. is a smaller percent of the total budget than the 9.5percent Government average, R. & D. has increased more rapidly than outlays. R. & D. represents a higher percentage of the increased outlays in such fields as welfare; commerce, transportation, and communications; agriculture; international relations; labor and manpower; housing and community development; and general government. Thus, there is some movement in most fields toward the Federal average, but substantial differences can be expected to continue because the various fields are not equally science and technology limited.

I would like now to summarize the implications of some of our findings and my own thoughts in terms of the subcommittee's current interests:

(1) The major issue, as I see it, on which the future health of Federal R. & D. is predominantly dependent is its capacity to contribute to the achievement of national goals and priorities. Very different organizational structures for R. & D. can be successful if effective and acceptable relationships between R. & D. and goals are established and maintained.

(2) The present Federal R. & D. program established by the U.S. Congress and administered by executive branch agencies is the envy of most of the world. It has permitted active participation by hundreds of thousands of individuals in a wide variety of governmental, educational, business, and nonprofit institutions. Any reorganization should make it possible for the total scientific and engineering resources of the United States to contribute even more to the achievement of national goals.

(3) In analyzing the background material prepared for the subcommittee, and our work as summarized above, we have observed that many of the suggestions for reorganizing Federal scientific and technological activities seem to involve those functional fields in which many agen



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