Good morning, and thank you for joining us to discuss the science and technology investments in the FY98 budget request that the President is releasing today.

Today marks an anniversary of sorts for me. This is my fifth annual appearance before you to present President Clinton's R&D budget request. More importantly, and more to the point, the President's FY98 budget marks the fifth year in a row that President Clinton has called for increases in science, technology and education investments.

Two days ago, in his State of the Union speech, President Clinton stated clearly his convictions, saying that, "to prepare America for the 21st century, we must harness the powerful forces of science and technology to benefit all Americans." This budget, as have his past four budgets, delivers on President Clinton's commitment to maintain critical science and technology investments as a priority while balancing the budget.

To provide you with some context, let me introduce OMB Associate Director T.J. Glauthier to review the President's overall FY98 federal budget strategy that will be presented later this morning. (Glauthier remarks)

Now, as in past years, I would like to take just a few minutes to review the highlights of the R&D budget request:

The President's FY98 budget increases total federal research and development funding by more than $1.6 billion over 1997, to roughly $75 billion (as traditionally reported). This is the fifth year in a row that President Clinton has proposed to increase research and technology unding, at the same time that he has cut the budget deficit and has put our country on track for a balanced budget.

The President's FY98 budget boosts funding for basic research. The budget proposes $15.3 billion for basic research, an increase of $418 million (3%) over 1997. This includes, for example, a 4% increase for R&D at the National Science Foundation on the civilian side, and a 5% increase in defense basic research. Basic research funded by the Department of Energy is slated to increase by more than 4 %. In the outyears, basic research is projected to increase steadily by nearly 5% to the year 2002.

The President's FY98 budget strengthens university-based research. University-based research is key to America's future; it provides new knowledge and new technology, while at the same time training the next generation of scientists and engineers. We are proposing to increase university-based research by $289 million, to a total of $13.3 billion in FY98.

The President's FY98 budget provides major new support for technologies that ensure that America benefits from the revolution in information technology. Investments in computing and communications R&D are increased by 10%, to $1.1 billion. This includes a 3-year, $300 million Next Generation Internet initiative. This initiative will create the foundation for the networks of the 21st century by connecting more than 100 U.S. universities and national labs at speeds that are 100 - 1,000 times faster than today's Internet -- with an ability to transmit voice, video and virtual reality in a secure and reliable fashion.

The FY98 budget also provides $205 million for the Department of Energy's Accelerated Strategic Computing Initiative (ASCI), a critical part of our Science-based Stockpile Stewardship program. This program is producing new generations of the world's fastest supercomputers, which will be available for both civilian and defense applications.

The FY98 Budget provides significantly increased support for programs that will bring the power of modern information technology to classrooms throughout America. The budget includes $524 million for research and development in education technology. This includes $75 million for the Technology Innovation Challenge Grants program that funds competitive grants for consortia of schools, businesses, universities, and other organizations to develop innovative applications of innovative technology. In addition to these R&D programs, the budget more than doubles, to $425 million, the funding for the President's $2 billion, 5-year Technology Literacy Challenge Fund designed to stimulate public-private partnerships focused on fully integrating education technology into teaching and learning.

The President's FY98 budget increases investment in technologies essential for ensuring continued US economic leadership and job creation. A 6% increase in civilian applied research ensures that the U.S. will benefit from a continuing flow of technological advances. The budget boosts investments in critical technology initiatives like the Advanced Technology Program at the Department of Commerce, which gets a 22% increase over FY97 (to $275 million), and provides a 36% increase for the Manufacturing Extension Partnership program that operates in close cooperation with state governments to ensure that our nation's small and mid-sized companies are able to compete worldwide with state-of-the-art technology. Funding for the Partnership for a New Generation of Vehicles initiative is increased 7%, to $281 million*, and funding for the construction and building technologies initiative is increased 15%.

The budget ensures that information technology is used effectively. Examples include $36 million for the Department of Commerce's Telecommunications and Information Infrastructure Assistance Program (TIIAP), and $250 million for the Intelligent Transportation System (ITS) initiative. The ITS is critical for reducing congestion, improving the safety, and mitigating environmental impacts of our nation's highway system.

The President's FY 98 budget includes tax incentives to encourage private sector investment in research and technology. The budget proposes a one year extension in the Research and Experimentation tax credit. In addition, benefits of the Foreign Sales Corporation tax credit would be extended to computer software producers whose products are licensed for reproduction abroad.

The President's FY98 budget increases funding for environmental research. Science and technology investments are critical for enhancing environmental quality, and this budget funds vital research needed to ensure clean air, pure water, and safe food. The FY98 budget allocates $5.3 billion for environmental research, a four % increase over FY97. This funding supports a broad research agenda, including sustainable use of natural resources, preservation of biodiversity, ecosystem management and restoration, social and economic dimensions of environmental problems and environmental technologies. The largest component is $1.9 billion for understanding and predicting global climate change and its regional impacts.

This budget invests in the highest quality research aimed at understanding our most challenging problems, coupled with development of technology to enable better environmental protection at lower cost. The budget allocates $115 million for the STAR Program (Science To Achieve Results), a 21% increase over 1997 for this multi-agency program that awards research grants and fellowships on the basis of rigorous peer review. The budget increases support for research on the health effects of airborne particulate matter by 37% over FY97, to $26 million. We have increased solar and renewable energy research programs at DOE by $60 million, or 22%, to enable clean energy sources for the 21st century. Funding for energy efficiency and pollution-prevention R&D increases $97 million, for a total of $517 million.

The President's FY98 budget provides increased support for health, food and safety research. The budget for the National Institutes of Health (NIH) contains a 2.6% increase, primarily going to investigator-initiated, peer-reviewed research grants. This increase will fund high priority research areas such as HIV/AIDS-related illnesses, breast cancer and other women's health issues, minority health initiatives, disease prevention research and spinal cord injury research.

The FY98 budget also contains an increase of $43 million to enhance the safety of our nation's food supply. The President has requested a 38% increase in the USDA's National Research Initiative for support of investigator-initiated, peer-reviewed research grants. To protect our health from the threat of new infectious diseases, the President's budget calls for a 34% increase for CDC's emerging infections surveillance and response programs to $59.5 million.

The President's FY98 budget continues the President's strong support for the nation's civil space program. The budget maintains funding for the International Space Station program at $2.1 billion; strengthened commitment to Mission to Planet Earth at $1.42 billion (a 4% increase over FY97); and solid support for the X-33 Reusable Launch Vehicle program ($330 million) and aeronautics initiatives ($456 million). In addition, NASA's space science budget has been augmented by $1 billion over the next five years.

The overall out year projections for NASA in the President's FY98 budget represent a significant improvement over the FY97 estimates, which had the agency dropping to $11.6 billion by FY00. Under the FY98 run out, the NASA budget will go from $13.5 billion in FY98 to $13.2 billion in FY00, then remain at that level through FY02. In total, NASA's five-year budget has been increased by $2.7 billion compared to last year, to provide a stable planning environment.

The President's FY98 request continues to support the investments in research and technology that ensure our nation's security. We are emphasizing investments which sustain our military defense capabilities, prevent conflict before it occurs, and address other global threats to the well-being of our nation.

The budget maintains our long-term investments in the science and technology base and our commitment to advancing our defense capabilities efficiently and cost-effectively. We are requesting a 5% increase in defense-related fundamental research, which includes an 8% increase in the basic research budget of the Department of Defense to $1.16 billion. We are also continuing our support of defense R&D which also leverages innovation in the commercial sector through the Dual-Use Applications Program (DUAP). The request for DUAP is $225 million.

We are maintaining our priority for investments that will help to control the spread of nuclear weapons and the materials used to make them. The FY98 budget requests a 16% increase in the Cooperative Threat Reduction Program to $382 million. This U.S.-Russia cooperative program has proven to be a critical investment in helping the states of the former Soviet Union sequester, dismantle and destroy Cold War era nuclear and chemical weapons. We are also requesting a funding increase of 21 % to $137 million to strengthen the control and accounting of the materials that can be used to make nuclear weapons, to prevent these materials from misuse.

We are requesting $1.4 billion for the Department of Energy's Stockpile Stewardship Program. This program is designed to support the research needed to assure the reliability and safety of our nuclear stockpile without nuclear testing. It underpins our commitment to the Comprehensive Test Ban Treaty, which was signed by the President last September. We are also requesting $1.3 billion for the construction of facilities needed for this program which includes $900 million for the National Ignition Facility.

This sums up the S&T highlights in the FY98 budget -- I would refer you to individual agency briefings and budgets for more details. Before taking your questions, there are two additional points I would like to make.

First, there have been many well-publicized predictions -- fears may be a better description -- within the science community that balancing the budget would require deep cuts in civilian research programs -- cuts on the order of one-quarter to one-third over the next five years. Every one of my years in this office, I have heard rumors of the imminent demise of our nation's S&T enterprise. This year is no different.

In fact, in the years between 1998 and 2002, the President's plan will preserve civilian research funding while completing the job of balancing the budget. The President's baseline outyear budget plan proposes civilian R&D to grow by 2% (nominal) between 1998 and 2002. This represents a solid investment, given the fact that the budget will eliminate the deficit (and actually produce a surplus) over the same time period. Above this base, I fully expect some increases including those required to launch exciting new initiatives to be realized each year, at the time that year's budget request is prepared and submitted to Congress.

Second, the 1996 elections capped a year of sometimes-acrimonious debate on the role of Federal support for science and technology. That debate may well continue, but what emerged is clear: The American public and the vast majority in Congress su pport a strong federal research program to produce new jobs and economic growth, protect the environment, improve health care, and educate our children for the 21st century.

It is time to put that debate behind us and rebuild the historical bipartisan support for a strategy to maintain America's world leadership in science and technology into the 21st century. We need to put our disagreements aside and look for the common ground we once shared, the common commitments to keep America the world's undisputed leader in S&T while bringing the budget to balance. I and my colleagues in the Administration look forward to working with the Congress on a bipartisan basis to achieve this.

Thank you.

*Previous versions of this statement contained an incorrect funding figure for the Partnership for a New Generation of Vehicles initiative. $281 million is the correct figure.

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