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FY 2005 Federal Budget

First Look

FY 2004 Federal Budget

Federal funding for information technology research and development would increase only slightly next year under President Bush's FY 2004 budget plan announced February, 2003.

Networking and Information Technology Research and Development (NITRD) activities would increase 5.9 percent over the FY 2003 requested level to $2.2 billion under the President's FY 2004 budget request.

Cybersecurity legislation signed into law in late 2002 signals a new focus on computer and network security in Congress and the Administration in FY 2004.

A National Science Foundation (NSF) Advisory Committee recommends a new initiative in Cyberinfrastructure at NSF; NSF would begin a new cyberinfrastructure subactivity in FY 2004.


  • Defense Appropriations - Congress overwhelming approved the FY 2004 Defense Appropriation, which provided a slight increase to basic defense research and included a provision to stop funding for the controversial Terrorism Information Awareness project at DARPA and dissolve the office that housed it. The program, an attempt to "design a prototype network that integrates innovative information technologies for detecting and preempting foreign terrorist activities against Americans," came under fire from a number of groups, including CRA, who saw the eventual deployment of such a system as a serious threat to the American civil liberties and security.

    However, CRA also argued, in a letter to the House and Senate negotiators, that while a prohibition on deploying the technology might be appropriate, prohibiting research into these areas would not be in the national interest.

    "We wish to emphasize that the technologies proposed for research under TIA could have valid uses in many other contexts, including predicting failure of safety-critical components, identifying fraud in contracting, and identifying suspicious transfers of controlled materials," CRA Chair James Foley wrote. "Many other uses may be discovered as the technology matures, including in counter-terrorism. The military and the country have repeatedly benefited from the technological advantages that result from research into difficult computing problems -- including information fusion, improved privacy technologies, and machine-learning algorithms for data mining. These are technologies that have been identified by many, including the National Research Council as worthy of further study. The problems that need solving are, indeed, sufficiently hard ('DARPA-hard') as to be worth the time and investment as independent research thrusts." CRA urged that the conferees reject Senate language that would prohibit research in TIA-related areas and allow research to go forward.

    Senate negotiators insisted on the more restrictive language, however, citing not only DARPA missteps on TIA, but also concerns about controversial research into predictive markets (FutureMAP) that was quickly cancelled and, more recently, revelations that JetBlue airlines had voluntarily turned over more than 5 million customer travel records to a military contractor as part of an unrelated database research project.

    The conferees also dissolved DARPA's Information Assurance Office (IAO), from where the TIA program idea originated. DARPA IAO's former head, Adm. John Poindexter, resigned over the TIA controversy in August.

    Conferees did insert vague language in the conference report that appears to allow work on TIA-related projects to continue at unspecified intelligence agencies, as long as that work does not focus on US citizens. Senate appropriations staff would not comment on what the language meant.

    Overall funding for defense basic research will remain essentially flat as a result of the appropriations agreement. Defense 6.1 spending will rise to $1.418 billion for FY 2004, up from $1.416 billion in FY 2003. The total 6.1/6.2/6.3 investment will rise from $10.8 billion in FY 2003 to $12.2 billion in FY 2004.

    Conference Report for the FY 2004 Defense Appropriations.

  • VA-HUD-Independent Agencies Appropriations (NSF) - Congress wrapped up the FY 2004 appropriations process after returning from its Thanksgiving recess by approving a modest increase in funding for information technology research and development and the National Science Foundation as part of a gargantuan 700-plus page omnibus appropriations bill for FY 2004.

    Under the agreement, NSF's budget will grow to $5.57 billion in FY 2004, an increase of $268 million over FY 2003, or 5 percent. The appropriation, the largest NSF budget in history, still falls well short of the 15 percent increase approved by Congress and the President last year in the NSF authorization bill, a rate of increase that would double the agency's budget in five years.

    Also slated for increase is NSF's Computer and Information Science and Engineering (CISE) directorate, which will grow to $606 million for FY 2004, an increase of $24 million over FY 2003, or just over 4 percent. The increase includes $225 million for NSF's Information Technology Research program (ITR) and "not less than $20 million" for the agency's cyberinfrastructure initiatives in FY 2004.

    The omnibus legislation (HR 2673) - a combination of seven of the thirteen annual appropriations bills Congress is required to pass annually to fund all activities of the federal government - passed well after the official start of the 2004 fiscal year, which began October 1, 2003. Lack of agreement with the Bush Administration over a final overall spending number had hindered progress on the seven outstanding bills. Unwilling to prolong the congressional session any longer, Congressional leaders agreed to package the seven outstanding bills Agriculture, Commerce/State/Justice, District of Columbia, Foreign Operations, Labor/HHS/Education, Transportation/Treasury, and VA/HUD/Independent Agencies (which includes NSF) into one omnibus bill and make a 0.59 percent cut to every program across the board to make the Administration's spending target.

    Conference Report for the omnibus appropriations legislation.

  • Department of Homeland Security Appropriations (DHS) - House and Senate negotiators finished work on the first Homeland Security appropriations bill, approving $874 million in research and development funding for the new agency, including $18 million in cyber security R&D. The $18 million is more than double the amount originally requested by the Administration ($7 million for FY 2004).

    R&D work at the new agency will run the spectrum -- from basic research to fully developed and deployed technologies in the hands of emergency workers. As a result, the Department's new "DARPA-esque" research arm, the Homeland Security Advanced Research Projects Agency (HSARPA), will focus on short term technologies, according to new HSARPA Deputy Director Jane "Xan" Alexander.

    Alexander, who comes to HSARPA after being a program director at DARPA, told a gathering of IT industry groups that the new research agency will focus on research horizons of 12 months or less, because DARPA is focused on the "long-term" technologies.

    The Homeland Security Appropriations was signed by the President on October 1, 2003.

    Conference Report for FY 2004 Dept. of Homeland Security appropriations.

Budget Request Documents

Congressional Response to the Budget Request
Independent Analyses of the Budget Request
The Budget Process
Archive of Previous Budget Information