This year’s budget process has been complicated by a number of factors: confusion surrounding the sequestration cuts, the absence of the President’s FY2014 budget proposal, an expiring Continuing Resolution (CR), and Congress reviewing budget proposals for FY2014 and appropriations bills for FY2013 at the same time. While the FY2014 budget is yet to be decided, last week the House approved the Senate’s version of the Full-Year Consolidated and Further Continuing Resolution Act of 2013, which funds the federal government for the remainder of the 2013 fiscal year. Since the current Continuing Resolution is set to expire on March 27, the bill, which now heads to President Obama’s desk to be signed into public law, avoids a government shutdown by a matter of days.
As shown in the figure, the new CR is not very different from the old CR in terms of investments in energy innovation. The previous CR was based on FY2012 funding levels, and the new CR lowers investments in energy R&D by less than one percent from FY2012 levels.
The table below shows the recent appropriations legislative history in relationship to FY2012 funding levels. The new Continuing Resolution (CR) does not reflect the additional sequestration cuts mandated under the Budget Control Act of 2011, which are expected to cut key energy innovation programs at DOE by five percent and instigate significant losses to long-term U.S. GDP growth. Under sequestration and with Congress’s cuts, funding for ARPA-E declines by nine percent from FY2012 levels, and funding for EERE declines by six percent.
According to AAAS, the new CR plus the impacts of sequestration put federal R&D investment, “at its lowest point since FY2002, and more than $25 billion in constant dollars below the all-time peak in 2010.” The sequester cuts, combined with the new CR reductions, prolong the trend of underfunding research and development of clean energy at the federal level. As discussed in our report Breaking Down Federal Investments in Clean Energy, perpetually underfunding clean energy innovation – whether it is R&D, demonstration, or manufacturing – restricts the development of a strong and functional energy innovation ecosystem capable of producing the breakthrough technologies necessary to meet the nation’s energy challenges in the future.