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Budget
Bush Requests Major Increase For Fighting Terrorism
by Andrew Noyes
While holding the line in other areas of the federal budget, President Bush on Monday proposed a hefty increase for global anti-terrorism efforts at the Pentagon in fiscal 2008.
In addition to the $481.4 billion total proposed for the Defense Department, the administration also requested an extra $93.4 billion in supplemental funds for the rest of fiscal 2007 and $141.7 billion for fiscal 2008 for the global war on terror, which would be double the amount appropriated for this year. The total agency budget request is about 10 percent higher than the previous year's request.
Since 2001, $426.8 billion has been appropriated for agency-wide anti-terrorism operations. The funding request would increase the amount to $661.9 billion, according to the budget proposal.
"As commander-in-chief, my highest priority is the security of our nation," Bush said in his budget message. "My budget invests substantial resources to fight the global war on terror and ensure our homeland is protected from those who would do us harm."
On the intelligence front, Bush's request underscores his goal of improving human and signals intelligence and data-processing. It includes a proposed doubling of the number of Central Intelligence Agency case officers and analysts, and supports continued anti-terrorism-related data-sharing efforts.
The budget also requests $34.3 billion for the Homeland Security Department, an 11 percent increase over the fiscal 2007 budget request and about $2.3 billion above the amount appropriated for fiscal 2007. The proposal includes $13 billion for strengthening border security and $2 billion for preparedness grants to emergency responders.
Bush's budget would limit all federal programs unrelated to defense and homeland security to a 1 percent increase in discretionary spending for fiscal 2008, according to OMB. The amount would not keep pace with the 2.5 percent increase in inflation last year.
The request seeks to advance the president's broad competitiveness initiative, which he introduced in his 2006 State of the Union speech, by funding new investments in nanotechnology, hydrogen energy, climate-change science and other research. Global intellectual property protection commitments also would be upheld, the budget documents stated.
Other proposed funding increases for the departments include:
-- $20.2 billion for Justice, up 3 percent from fiscal 2007;
-- $69.3 billion for Health and Human Services, up 2.5 percent;
-- $6.6 billion for Commerce, up 8 percent;
-- $24.3 billion for Energy, up 2 percent;
-- $35 billion for State, up 15 percent.
-- And $39.4 billion for Veterans Affairs, up 10 percent.
The National Science Foundation would get 14 percent more at $6.4 billion, and the National Aeronautics and Space Administration would get $17.3 billion, a 2 percent boost.
The Education Department, meanwhile, would be virtually flat-funded at $56 billion in fiscal 2008 after two years of proposed cuts.
In the State of the Union speech last month, Bush previewed his budget request, saying it would include a plan to eliminate the federal deficit within five years. The deficit was $248 billion in fiscal 2006 after reaching a record-breaking $413 billion in fiscal 2004.
Senate Budget Committee Chairman Kent Conrad, D-N.D., issued a statement saying that Bush's budget request is "filled with debt and deception" and "disconnected from reality." The proposal "continues to move America in the wrong direction."
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Budget
Bush Proposes Boost For Basic Research Funding
by Heather Greenfield
The White House Office of Management and Budget said Monday that the proposed spending increases for basic research for fiscal 2008 match the outline of the president's American competitiveness initiative.
The budget proposal for the National Science Foundation seeks a 6.8 percent increase to $6.4 billion over the agency's expected fiscal 2007 budget.
The budget includes across-the-board increases for NSF programs, including a 4.5 percent increase over Bush's fiscal 2007 proposal for NSF's nanotechnology research investments. The funding increase is designed to help build a new NSF center to address environmental, health and safety research needs for nanomaterials.
The funding increases for basic research, a goal in the initiative, were echoed in the budget for another key agency doing research and development -- the Department of Energy's science office, which would get a 7 percent budget boost over likely fiscal 2007 spending.
"At NSF and DOE, the overall budget is in line with the plan in the ACI to double the budgets in the next 10 years. We're pleased in general with that," said Bob Berdahl, who directs the Association of American Universities.
Al Teich, the director of science and policy programs at the American Academy for the Advancement of Science, said the budget plan "looks reasonably good. It could be a lot worse given the constraints."
But at least one key lawmaker said the proposal by President Bush is not good enough.
"The president's budget includes a few good targets for R&D funding but ignores too many of our country's priorities," said House Science and Technology Committee Chairman Bart Gordon, D-Tenn. "Today's young people planning for careers, as well as researchers at our labs and universities, deserve a better budget, one that shows a strong federal commitment to the priorities that will ensure our nation's competitive position in the world in science and technology."
Another key agency involved in basic research, the National Institute of Standards and Technology, faces a mixed outcome. Optimists, including the NIST press office, point to a 21 percent proposed increase in its "core programs."
The overall fiscal 2008 budget request for NIST, which includes Industrial Technology Services, is $640 million. While that is more than Bush's fiscal 2007 request, the White House proposal is 5 percent less than the $675 million Congress is expected to approve when the Senate clears the fiscal 2007 spending measure for NIST and other agencies.
The cut in funding would come from Bush's proposal to eliminate funding for the Manufacturing Extension Partnership and Advanced Technology Program.
"Rather than a balanced approach to an innovation agenda, the president once again is using a 'robbing Peter to pay Paul' approach," Gordon said. "This is hardly the way to develop a robust innovation portfolio to maintain our economic competitiveness in the 21st century."
Gordon also complained that basic research often "never makes it beyond the lab."
Within Energy's science office, the president's fiscal 2008 budget proposal would again seek to cut the small-business programs for innovation research and for transferring government-funded technology research to the private sector.
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Budget
Bush Revives Calls To Cut Aid To Tech Programs
by Michael Martinez
The White House on Monday requested that Congress boost funding for a host of technology-related programs in its fiscal 2008 budget plan, but it continued to target others that have been marked for cuts in recent years.
President Bush once again has targeted the Advanced Technology Program at the National Institute of Standards and Technology. Bush has proposed eliminating funding for the program, which invests in high-risk, long-term research aimed at providing "payoffs far beyond private profit." Bush has tried to phase out ATP in previous years, but has been rebuffed by Congress. A pending spending bill for fiscal 2007 would provide $79 million for the program.
Funding at NIST for industrial technology services would be cut nearly in half, to $46.3 million under Bush's proposal. That budget line includes the Hollings Manufacturing Extension Partnership, which provides resources for small manufacturing companies.
Bush has targeted MEP for cuts for several years running now as well, but lawmakers have defended the program. Sens. Joseph Lieberman, I-Conn., and Olympia Snowe, R-Maine, went to bat for MEP funding last year.
The White House also called for cuts at the Commerce Department's National Telecommunications and Information Administration. NTIA would receive $18.6 million in fiscal 2008 under the budget proposal.
New grants for planning and construction of public telecom facilities are proposed for termination. NTIA received $22 million for those grants in fiscal 2006. The Bush administration also tried to eliminate the 62-year-old program in last year's budget request.
Since 2000, most of the awards through the program have been for helping public-television stations convert to digital broadcast signals. "Funding for remaining digital conversion and other activities is available from a number of different sources," the budget proposal said.
Bush has proposed $1.5 million for the Technology Administration. The Bush administration slashed its proposal for the agency last year by about $5 million as part of an effort to streamline the office.
On the education front, a series of tech-related programs have been put on the chopping block under Bush's proposal. Educational technology state grants marked for $279 million in fiscal 2007 would be terminated. State grants for innovative programs, which are expected to receive $99 million from Congress in fiscal 2007, also would be eliminated.
Additionally, the White House is looking to curtail funding for community learning centers. Funding for those centers would be trimmed to $981 million in fiscal 2008, down from the estimated $991 million they are slated to receive in fiscal 2007.
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Budget
New E-Government Successes Balanced By Failures
by Aliya Sternstein
The federal government has more agencies succeeding in managing e-government initiatives this year, but the number of failing grades also has increased, according to the latest scorecard.
In past years of the Bush administration, the color-coded scores in the President's Management Agenda were included in the annual budget, which was released Monday. This year, the grades were released a few days before the budget, but the budget said that because of the agenda, federal employees "are successfully addressing the government's most serious management challenges and making programs more effective and customer-focused for taxpayers."
The scorecard covers e-government, human capital, competitive sourcing, financial performance, and integrated budget and performance. Red means failure, yellow indicates improvement and green signifies adequate implementation.
For the quarter ending Dec. 31, 2006, eight agencies earned green scores -- an increase of two agencies compared with the same quarter in 2005. The number of failing grades, however, increased by the same amount -- from four agencies last year to six this year.
In evaluating all five areas, discipline has improved greatly since the agenda was launched in 2001, according to Clay Johnson, OMB's deputy director for management. "The average agency is better managed today than the best managed agency was in 2001," he said last week.
The State and Labor departments met standards for success in all five categories, marking the second consecutive year that Labor earned a green light across the board.
On Monday, Labor Chief Information Officer Patrick Pizzella said his department "has been able to sustain excellence in e-government work because of the strong support" from Labor Secretary Elaine Chao and a "sustained and coordinated effort" by senior management and technology staff.
The Health and Human Services Department, Homeland Security Department, National Aeronautics and Space Administration, and Veterans Affairs Department were among the agencies showing a series of flaws. A data breach last year at VA exposed the private information of as many as 26.5 million veterans.
The Interior Department, marked with a red dot in e-government last year, improved to an intermediate level of performance this year. In November, the department activated crucial components of a new system that will consolidate financial and business management platforms by 2010, department officials said at the time.
The department is still contending with a decade-old class-action lawsuit concerning the security of Indian trust fund information. American Indian plaintiffs accuse the department of failing to protect their data from hackers.
Darrell West, a professor at Brown University who specializes in e-government, said that generally, the government does a better job of providing online services to the public than at automating its own internal operations. The government is most effective at "collecting money" with technology, he said.
He praised the Web sites maintained by the Housing and Urban Development Department, Internal Revenue Service, and State Department. He said, however, that he could not endorse the IRS' free e-filing program for eligible taxpayers because "sometimes people are subjected to ads or pitches that require payment."
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Defense
Bush Seeks Billions Of Dollars For Army Technology
by Winter Casey
Under the Bush administration's fiscal 2008 budget released Monday, the Defense Department would receive $3.7 billion for an Army modernization program that involves developing and integrating new technology systems into traditional warfare practices.
The figure would mark a $300 million increase over the amount expected to be appropriated in fiscal 2007 for the Army's Future Combat System, which entered the development phase in 2003, according to a Defense Department summary. Major areas of the investment include unmanned aerial vehicles, manned and unmanned ground vehicles, and battlefield command-and-communications systems.
In the past, Congress has regularly trimmed hundreds of millions of dollars from the Pentagon's funding requests for the Future Combat System. About $400 million was slashed from the fiscal 2007 budget request. To gain more support on Capitol Hill, government officials have encouraged congressional staffers to visit Army testing sites to learn more about the systems.
The Government Accountability Office has further criticized the program in studies that have questioned the Army's ability to successfully deploy the project.
The budget also requests $1.6 billion for research, development and procurement focused on protecting military forces that could be exposed to chemical or biological warfare agents, and the budget would support improved early attack warnings.
Overall, Bush requested roughly $481.4 billion for the Defense Department for fiscal 2008 -- an 11.3 percent increase over the fiscal 2007 allocation. For that year, the president asked Congress for $435.4 billion.
Bush also requested an additional $141.7 billion to be used for the "global war on terror" in fiscal 2008 and $93.4 billion in emergency supplemental funding to cover war equipment and operation costs for the remainder of fiscal 2007.
The administration said the budget would support improved sharing of intelligence information through a government-wide effort to share terrorist data among interested parties in federal, state and local governments.
"Policymakers, military commanders and law enforcement personnel need timely, accurate information regarding the capabilities and intentions of foreign powers, terrorists and other international actors," according to the budget.
Additionally, the fiscal 2008 budget calls for a 50 percent increase in the number of CIA case officers and analysts.
The United States needs to support improved technology to enable troops to meet future threats successfully, according to the budget. Within the document, Bush touted the success of the Defense Department's global electronic health record system which is expected to eventually serve more than 9 million service members and affiliated parties.
In 2008, the system will be active in 60 percent of military hospitals, the budget stated.
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Budget
More Money, End Of Fee Diversion Sought For PTO
by Andrew Noyes
The Patent and Trademark Office would receive $1.9 billion in fiscal 2008 under the budget plan President Bush released Monday. This also is the fourth year in a row the White House has recommended the Congress allow the agency keep fees collected from patent and trademark applications instead of diverting funding to other government programs.
The proposed increase for PTO is about 8 percent higher than the amount Congress is expected to appropriate for fiscal 2007, PTO Deputy Director Stephen Pinkos said in a telephone briefing with reporters.
If approved, the fiscal 2008 budget request would allow the PTO to "build on its recent successes in improving quality and increasing the number of patent and trademark examinations," Pinkos said. The agency also could continue hiring patent examiners and expand its worldwide intellectual property protection efforts, he added.
In fiscal 2008, the PTO anticipates hiring an additional 1,200 patent examiners and plans to continue expanding the agency's telework efforts. The net gain in examiners would be about 800 employees because the agency's attrition rate is about 10 percent annually, Pinkos said.
The funding request also would let the agency move toward its goal of processing all patent and trademark applications electronically. Almost 50 percent of patent applications already are filed electronically, he said.
Under Bush's proposal, PTO could expand its global intellectual property academy, which has provided training programs for foreign government officials since its launch in September 2005. The funding request also would allow the agency post additional IP experts abroad, Pinkos said.
According to PTO, examiners completed 332,000 patent applications in 2006 -- the largest number ever -- while achieving the lowest patent allowance error rate (3.5 percent) in more than two decades. At 54 percent, the amount of applications reviewed and approved also was the lowest on record, the agency reported.
PTO also processed a record number of trademark applications in 2006, Pinkos said. His agency's trademark attorneys took final action on 378,111 applications, a 36 percent surge over the previous year.
California Democrat Howard Berman, chairman of the House Judiciary's Court, the Internet and Intellectual Property Subcommittee, praised the budget request's stipulation barring fee diversion. The agency should keep the fees they collect "so they can implement quality initiatives for higher quality patents and hire additional necessary staff to reduce pendency," he said.
A spokesman for patent crusader Sen. Orrin Hatch, R-Utah, echoed Berman's remarks. He said PTO's full access to its fees, plus a $72 million increase over the fiscal 2007 budget, is the key to a healthy future for the agency.
Herb Wamsley, executive director of the Intellectual Property Owners Association, noted that if the PTO income generated from fees is greater than what is projected, the agency does not get to pocket the excess money. "The system is not perfect yet, but it's getting better," he said.
PTO did not have to relinquish any surplus fees to the government in fiscal 2005 or fiscal 2006 because the agency actually collected "slightly below our authorization figure for those two years," Pinkos said.
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On The Download
The Campaign-Finance Implications Of Online Video
by Shira Toeplitz
When YouTube co-founder Chad Hurley announced last week that he has plans to start sharing profits with users, the online video-sharing site joined the ranks of others that already pay contributors for their content. But the pay-for-play system raises legal questions for campaigns because any payments fall under the rare circumstance of making profit without fundraising.
The Federal Election Commission could judge the issue one of two ways: Either the money earned would count as a corporate contribution from YouTube, or the profit would be considered a normal business transaction as long as it is made at market value.
Former FEC Chairman Bradley Smith subscribes to the latter camp. He said that as long as the sale is made at a market price, then it is just like a campaign selling extra office furniture.
"Traditionally, the basic standard is that these have to be commercially reasonably transactions," Smith said. "If YouTube was buying out space that the campaign had leased and paid for ... that would not be considered a contribution by YouTube."
Most election law experts, including Smith, said campaigns should seek an FEC advisory opinion on the matter. But other campaign law attorneys see the profit-sharing arrangements with video-sharing companies as corporate contributions.
Paul Ryan, the FEC program director for the Campaign Legal Center, said that with few exceptions (mailing lists, for example) the FEC usually has deemed selling anything developed uniquely for political committees as contributions subject to limits -- even if the campaigns technically earn the money by creating popular Internet videos.
"I don't think this notion of earning has historically played into the FEC's analysis," Ryan said. "At the end of the day, this is very new territory. The Internet presents many new questions in campaign finance law."
Most political videos are not that popular. Now-freshman Sen. Claire McCaskill, D-Mo., last year scored a coup with a campaign commercial that featured actor Michael J. Fox arguing for federal funding of stem-cell research. Its nearly 2.3 million views made the ad one of the most popular "news" clips in YouTube history. But every other clip that the campaign put on the site received limited views.
Video-sharing sites typically use targeted advertisers to sponsor videos or reward popular clips based on viewing numbers. Revver.com attaches advertisements to the back of video, and users split the money with the company. Break.com rewards good videos with $2,000.
Blip.tv, which hosts the video Web log of Democratic presidential candidate and former Iowa Gov. Tom Vilsack, lets users opt in to sharing ad revenue. For the top clips, Blip.tv will try to match them with advertisers. Blip.tv executives said Vilsack's campaign is not sharing ad revenue.
Blip.tv CEO Mike Hudack said political content is on the lower end of the audience scale. "Is it going to make a difference between a $500-a-plate-fundraiser and not having a $500 political fundraiser? Probably not," Hudack said.
He added that political content makes finding advertisers more difficult. "Politics are a difficult area for brand advertisers because a brand never wants to be associated with a certain side of the spectrum," Hudack said.
Pairing advertisers with political content also raises legal questions. For example, what if Exxon wanted to sponsor, but not endorse, the video blog of a presidential candidate.
"If it's a blind pairing, I suspect the argument can be made that Exxon is not paying the campaign, it's paying YouTube," said Smith, who also heads the Center for Competitive Politics. But he said seeking an FEC advisory opinion would be wise.
Editor's Note: On The Download is Hotline's weekly dispatch on politics, multimedia and the Internet.
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Today's Feature:
Issue of the Week
For online gambling firms, the writing is on the wall: The United States is not a good place to do business.
Every Monday, read the Issue of the Week by the Technology Daily staff.
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E-briefs
Budget: The White House on Monday recommended that the FCC receive $313 million in fiscal 2008, $23 million more than the $290 million the agency is set to secure from a pending bill for fiscal 2007. The fiscal 2008 proposal is $10.5 million more than the $302.5 million the Bush administration proposed for this year. In the request, the administration endorses revamping the multibillion-dollar universal service fund, which subsidizes telecommunications connections in rural and underprivileged areas, and pledges to minimize abuse and waster associated with the program. The White House also calls for legislation arming the FCC with new authority to charge fees to improve spectrum management. "The commission would be authorized to set user fees on unauctioned spectrum licenses based on public-interest and spectrum-management principles," the budget says. Also proposed is legislation to permanently extend the FCC's authority to auction spectrum licenses, which expires Sept. 30, 2011.
Budget: The Bush administration on Monday proposed $300 million for high-speed Internet loans to rural areas for fiscal 2008. The loans, part of the Agriculture Department's Rural Utilities Service, are made to communities with populations of 20,000 or less to enable broadband deployment. The proposal is down from the $356 million sought for fiscal 2007. But under the continuing resolution funding the government, the loan program is slated to receive $495 million from appropriators in fiscal 2007, considerably higher than President Bush requested. The White House also is seeking $24.8 million in grants for telemedicine and distance learning initiatives, close to the $25 million requested -- and appropriated -- for fiscal 2007. In the budget, the administration said since there is "little demand" for distance learning and telemedicine loans, and since they "cost the government," it proposes that no loans be offered in 2008. Schools and hospitals mostly apply for those loans, which, unlike grants, are not competitive.
Budget: President Bush has proposed a $4.4 billion increase for the Department of Energy's Office of Science. The 7 percent increase over the amount expected to be appropriated for fiscal 2007 is in line with funding for the president's American competitiveness initiative. The 2008 budget would increase funding for basic research for high energy physics, bio-energy research and nuclear physics. The president asked for a 44 percent increase over what he proposed last year for supercomputing. He said he would like Congress to approve $340 million for advanced scientific computing research. He also has proposed a 12 percent increase over what he proposed last year for biological and environmental research. But the $532 million funding request is still $32 million less than the program's budget for 2006. Under the budget plan, infrastructure at science labs would get an 83 percent boost over what Bush proposed last year to $79 million.
Crime: The FTC issued a final opinion and order Monday in the legal proceeding against computer technology developer Rambus that bars the company from making misrepresentations or omissions to standard-setting organizations. The firm was found to have unlawfully monopolized markets for several devices that have been worked into industry standards for chips used in computers, servers, printers and cameras. Rambus failed to disclose it owned patents on technology being considered by a standard-setting process, the FTC said. The order requires Rambus, which manufactures dynamic random-access memory chips, or DRAM, to license its technologies and sets maximum allowable royalty rates it can collect for the licensing. The ruling also bars Rambus from collecting or attempting to collect more than the maximum allowable royalty rates from companies that already may have incorporated DRAM and requires the firm to employ a commission-approved compliance officer to ensure that its patents and patent applications are disclosed to standard-setting bodies.
Budget: President Bush has proposed $668 million to use toward supporting radio, television and Internet broadcasting around the world, according to a White House fact sheet released Monday along the fiscal 2008 budget. The funding would go to the Broadcasting Board of Governors, a self-described autonomous entity responsible for all government-sponsored, non-military, international broadcasting. The broadcasts are meant to promote democracy, counter extremism and improve the world's understand of the United States. "The president's budget funds broad outreach to developing and oppressed countries around the world through international broadcasting, exchanges and public diplomacy," the document said. In particular, the president mentions the need to support broadcasts in Cuba, Iran, the Middle East and North Korea.
Education: The Education Department could see the biggest Pell grant scholarship increase in 30 years under the fiscal 2008 budget plan released by the White House on Monday. If Congress backs the proposal, the scholarships -- which fund low- and moderate-income college students -- would give individual students up to $4,600 next year, a $550 increase. Over the next five years, the sum would rise to $5,400. "Higher education costs have made it more difficult for low- and middle-income families to afford college," Education Secretary Margaret Spellings said. "With more than 90 percent of today's jobs requiring a post-secondary degree, it's critical that we provide the information and resources necessary to help students pursue higher educational opportunity." The proposed maximum surpasses a recent House-passed Pell measure by about $300 for each student in fiscal 2007. Any increase would be the first since 2003, when it was raised by $50.
White House: President Bush on Friday declared this week as National Consumer Protection Week and urged citizens to learn more about the risks of identity theft. "When doing business through the Internet, it is especially important to protect personal data with appropriate software and commonsense security practices," Bush said in a statement. "I call upon government officials, industry leaders and consumer advocates to provide citizens with information about how they can prevent fraud and identity theft, and I encourage all citizens to be responsible consumers and take an active role in protecting their personal information," he said.
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