Timothy T. Taylor Home Page
Journal of Economic Perspectives
Articles and Writing
Economics Textbook
Classroom Teaching
The Teaching Company
High School Pedagogy

Articles and Writing

June 16, 1996
"Clinton Whittles Away at R&D"
San Jose Mercury News
By Timothy Taylor
<< Back to 1996 menu

WHEN IT comes to support of research and development, the Clinton administration follows a perplexing pattern: It first offers articulate and persuasive explanations of why government spending in this area is so crucial, and then it gradually cuts spending.

For example, here's an explanation of the importance of R&D spending taken from one of the supplements to President Clinton's proposed 1997 budget:

"Technological innovation has accounted for at least half of the nation's productivity growth in the last 50 years. We enjoy the fruits of this innovation every day in the many technologies we have come to depend on for our way of life, including lasers, computers, X-rays, Teflon, weather and communication satellites, jet aircraft, microwave overs, solar-electric cells, and human insulin.

"The development of these technologies has created new industries and millions of high-skilled, high-wage American jobs," it concludes. "Thus, technology has become a major engine of economic growth, a significant contributor to our national security, a generator of new knowledge, and a critical tool in protecting our health and environment."

With those words echoing in mind, flip to the actual spending levels listed in the chart that accompanies these fine words.

For 1997, the Clinton budget proposes that federal outlays for R&D rise from $70.6 billion to $71.3 billion, a rise of 1 percent. With inflation expected at between 2 and 3 percent, government R&D spending fails to keep up with inflation, and real spending declines.

This fall isn't just a one-year blip. During Clinton's term of office, from 1993 to 1997, dollars spent on research and development have fallen by 6.5 percent, after adjusting for inflation.

Part of this is due to the decline in defense-related R&D, which has fallen with the rest of the defense budget. But even if one ignores the reality that defense-related R&D has had some civilian spin-offs, and looks only at civilian-oriented R&D, Clinton's budget would be slightly lower in real dollars in 1997 than it was in 1995.

None of the responses one can make to this discrepancy between words and action are especially convincing.

For example, the Clintonites can boast that R&D has risen substantially in certain areas, like environmental protection and health. But if the overall size of the pie hasn't increased, then every much-ballyhooed increase is being more than offset by a cut someplace else.

Another hope might be that private industry would pick up the slack. But private R&D spending has also been flat the last few years.

To be sure, the Clinton administration isn't the only offender here. Government R&D spending (adjusted for inflation) actually peaked late in the Reagan administration, and has been drifting down ever since. But with total federal R&D spending at about $70 billion, it would cost just $7 billion for a 10 percent increase, or $3.5 billion for a 5 percent rise.

If, after four years in office, the Clinton administration can't find a way to squeeze out relatively small sums like these out of a $1.6 trillion federal budget, then it's fair to question the sincerity of its statements about the importance of research and development.

<< Back to 1996 menu