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.
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Emphasis on scientific research
With these proposals, Obama is putting a clear emphasis on scientific research, which many economists welcome as a building block for future growth.
"This administration is moving innovation closer to the heart of our economic policy, where it needs to be," Robert Atkinson, an economist and president of the Information Technology and Innovation Foundation in Washington, writes in a recent statement.
But Obama's moves would not be dramatic in terms of the overall budget. For example, the $4.6 billion R&E tax credit would equal about one-tenth of 1 percent of federal spending in 2012, by Obama's plan. That's because so much of federal spending is locked in for mandatory programs like Medicare, Medicaid, Social Security, and interest on the debt.
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Similarly, Obama calls for the National Science Foundation to get 13 percent more than in 2010 (the last budget Congress passed) to fund research at universities, businesses, and other institutions. That $1 billion gain is a lot of money, but it's almost invisible when viewed as a piece of the total budget.
Outside economists offer a mixture of skepticism and applause for Obama's priorities.
Many praise the idea of making the R&E tax credit permanent, to foster long-range investments by innovative businesses. By contrast, Congress has for years managed this tax credit from year to year, extending it amid lobbying (and campaign contributions) from business.
Mr. Atkinson lauds that effort, and the idea of expanding the R&E credit. He also calls for Obama to follow through on goals of making the US business tax code more competitive globally, to lure jobs that might otherwise flow to other nations.
Too much focus on green energy?
Michael Mandel, an economist at the Progressive Policy Institute, argues that Obama puts too much focus on green energy. His argument: The US has no clear lead over other nations in that sector, so the job-creating "bang for the buck" might not be great in that area.
Some economists like the idea, urged in the budget, of a $30 billion National Infrastructure Bank, which would provide loans and grants to help fund projects that can boost economic growth.
A $53 billion investment in high-speed rail is more controversial. The Obama budget doesn't put this six-year tab on its list of "innovation" proposals, but says the project will "create skilled manufacturing jobs that can't be outsourced."
A goal of the project would be to give 80 percent of Americans access to high-speed rail within 25 years. It would be a lot faster than current Amtrak trains, but skeptics question whether it does much for the economy.
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