Obama’s Proposed Budget Raises R&D, Innovation Spending

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US President Obama’s proposal for the fiscal year 2013 budget, released today, raises or maintains spending in a number of key areas for technology and innovation, according to an industry analysis. [Updated]

According to the Information Technology and Information Foundation (ITIF), the budget includes increases in research and development at the National Science Foundation, Department of Energy, National Institute of Standards and Technology, and a new Advanced Manufacturing Technology Consortia programme, which ITIF said is a public-private partnership that will support research to address common manufacturing challenges faced by the private sector.

The budget also appears to allow the US Patent and Trademark Office to keep the fees paid for its services, which has been a source of debate in recent years as the patent office struggled with funding.

[Update:] The budget proposal calls for a significant increase in funding for the USPTO, according to the Intellectual Property Owners Association. The budget calls for USPTO spending of $2.95 billion, a “substantial increase over 2012,” according to the IPO. That’s because the patent office annual budget is based on the amount it collects in the year, and in 2012 the figure is lower than estimated “at least in part because of a surge of fee payments late in fiscal year 2011 on the eve of the 15 percent fee increase mandated by the AIA,” it said (referring to the America Invents Act patent reform legislation). The US fiscal year runs from 1 October to 30 September.

And the budget calls for a $5 billion for the 48(c) manufacturing tax credit, as well as keeps an R&D tax credit for companies. And there was a modest increase to export and trade agencies, ITIF said.

The president decided not to increase funding for the Manufacturing Extension Partnership, which is public-private partnership to assist manufacturers, drawing a rebuke from the tech association.

[update:] The budget also reflects the proposal to combine all agencies working on trade into one coordinated International Trade Enforcement Center, according to sources. President Obama made the proposal during his annual state of the union address in January (IPW, US Policy, 25 January 2012).

In the area of spectrum allocation to encourage innovation in wireless communication, the budget proposes that “the public safety network should rely on commercial technologies in place of the non-interoperable, proprietary technologies that public safety uses today and provides $500 million for R&D and standards development to make this goal a reality,” said ITIF. “This is a very sound approach that allows public safety and commercial networks to share spectrum, devices, and software.”

At the State Department and the US Agency for International Development (USAID) (which only get about 1 percent of the overall budget, or $51.6 billion), there were some limits, but the focus was on global economic security, including nearly $8 billion for public health, $1 billion for food security, and nearly a half billion dollars for climate change, according to a State Department release. It also “continues to expand the application of science, technology, and innovation in USAID and State Department programs to ensure the most efficient and effective use of assistance funding,” the department release said.

Senate Commerce, Science and Transportation Committee Chairman John D. (Jay) Rockefeller IV, issued a statement in support of the budget proposal on innovation, stating: “The President made clear in his State of the Union address that we need to focus on reviving our nation’s manufacturing sector by promoting innovation, competitiveness, and entrepreneurship. Millions of manufacturing jobs and factories have vanished over the past decade alone. If we are going to build an economy that lasts, it’s crucial that today we start making smart choices and investments when it comes to America’s manufacturing sector. The future of advanced technology and manufacturing jobs is on the line if we don’t.”

The overall budget proposes $3.8 trillion in spending (24.3 percent of GDP) and $2.5 trillion of revenue (15.8 percent of GDP) in 2013, resulting in a $1.3 trillion (8.5 percent of GDP) deficit, according to the independent Committee for a Responsible Federal Budget.

“The President is doing exactly the right thing by proposing to replace the mindless cuts of the sequester with health reforms, mandatory spending cuts, and new revenues,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement. “At the same time, his proposals would barely stabilize the debt – and at too high a level. We need to go bigger if we want to get this debt monkey off our back.”

[Update:] the Pharmaceutical Research and Manufacturers Association (PhRMA) issued a statement raising concern about the inclusion of a reduction in the length of data protection for new biologic medicines or biosimilars, which they said “is critically important to the development of cutting-edge medicines so needed by patients.”

They said the biosimilars provision of the healthcare reform law “provides appropriate incentives to support future medical advances. It supports high-value jobs that are critical to our nation’s economic recovery. And, it provides savings by creating the first pathway for federal regulators to approve biosimilars.” It also could discourage patent settlements, which they said are vital to protecting intellectual property, and without which costly litigation could keep generics from being available to patients for years.

William New may be reached at wnew@ip-watch.ch.

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