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Does Obama budget 'win the future'? Six ways he wants to boost innovation.

The Obama budget proposal for 2012 includes significant funding increases for scientific research and science education. But some supporters of an innovation agenda say it isn't ambitious enough.

By Staff writer / February 14, 2011

President Obama's fiscal year 2012 budget proposal sits on a table at the US Government Printing Office in Washington on Monday.

Molly Riley/Reuters

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Over the past three weeks, President Obama has been hammering on one major domestic theme: "winning the future" by investing to make the economy more innovative and competitive.

On Monday, the president moved to put his budget money where his mouth is. Mr. Obama's proposed 2012 budget includes significant funding increases for scientific research and for educating young Americans in math and science.

His budget drew sharp criticism from Republicans, who say the best way to make America's economy more competitive is through deep spending cuts that rein in the size of government. Meanwhile, even supporters of an innovation agenda take issue with some of Obama's specific proposals – or argue that his plans should be even more ambitious.

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The White House concedes that its pitch represents an effort to set priorities against a backdrop of a big squeeze, with Obama proposing cuts in discretionary spending and Republicans seeking even bigger cuts.

The budget "puts the nation on a path to live within our means so we can invest in our future," the budget document says. "It targets scarce federal resources to the areas critical to winning the future: education, innovation, clean energy, and infrastructure."

Top priorities

Here are Obama's top innovation-related budget priorities:

• Funding scientific research. The 2012 budget includes $148 billion for R&D overall, with new money targeted at sectors (including clean energy, advanced manufacturing, and cyber-security) which are "most likely to directly contribute" to job creation.

• Promoting private-sector research. Obama calls for making the research and experimentation (R&E) tax credit for business permanent, to simplify it, and to expand the credit by 20 percent. The up-front cost of this boost for business: an estimated $4.6 billion in lost tax revenue in 2012, or $106 billion over the next decade.

• Improving the patent system. Obama proposes boosting the speed and quality of patent examinations, with a fee surcharge to better align application fees with processing costs.

• Boosting education. In addition to broader proposals regarding schools and universities, the budget allocates $100 million toward an Obama goal of preparing 100,000 new teachers in STEM (science, technology, engineering, and mathematics) over the next decade.

• Ramping up clean energy. Obama seeks to move on several fronts here. He would transform an existing $7,500 tax credit for electric vehicles into a rebate that will be available to all consumers immediately at the point of sale. He would lure manufacturing for renewable energy by extending tax credits and adding $5 billion in new ones. And he would add three "Energy Innovation Hubs" – which bring together top scientists to work on an important issue – to the three his administration has already created, with the new ones focusing on critical materials, batteries and energy storage, and new power-grid systems.

• Bringing wireless broadband nationwide. Obama calls wireless broadband connections an increasingly important part of the nation's economic infrastructure. He seeks to make such networks available nationwide, and to create a new public-safety network to improve first-responder communications during emergencies. Key funding would come from auctions to reallocate airwave spectrum.

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