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THE WHITE HOUSE

                     Office of the Press Secretary
                         (Aboard Air Force One)
________________________________________________________________________
For Immediate Release                                   January 21, 2000

                             PRESS BRIEFING
                                   BY
                     DR. NEAL LANE, DIRECTOR OF THE
                OFFICE OF SCIENCE AND TECHNOLOGY POLICY

AND DR. RITA COLWELL, DIRECTOR OF THE NATIONAL SCIENCE FOUNDATION

En route to Los Angeles, California

8:55 A.M. EST

Q Which one of you can tell me about the Center for Research on Minority Health Care? I thought that was kind of interesting.

DR. LANE: Let me say a comment or two to lead up and then I'll say a word about that. Can everybody hear me? Okay. You've all got the mics on. How come I don't have earphones so I can hear you? Let me say a few general things, let Rita say a few general things and then we'll take your question first.

The President is going to give a speech today at Cal Tech, of course, and he's going to focus on science and technology and, in particular, his budget request, which he'll roll out on February 7th. The President has consistently proposed to the Congress increases in civilian R&D, research and development, science and technology, with particular emphasis on excellence in science and on the applications of science and technology to the things that people care about, that improves their lives in areas like biomedical research and environmental protection and information technology.

And in this budget he's going to propose a new initiative on nanotechnology. And nanotechnology may not be something that everybody talks about every day, but they will, because it's really the whole next generation in manufacturing and in applications the whole variety of societal needs. So what is nanotechnology all about? It's really about miniaturization of technologies, from computing to medical diagnostics to environmental monitoring. Almost every area you can think of that could benefit from making things smaller, cheaper, with lower power requirements will benefit from nanotechnology.

Now, of course, what the federal government is going to do is make the investment in the basic research, in the long-term research, where industry generally does not invest. That's our role. That's our partnership with the private sector. And so this is a new initiative. It's a grass-roots initiative. The scientists and engineers have been anxious to do more research in this area for a long time. Industry needs the new knowledge and the new technologies. So we're very excited about it. The President is very excited about it.

He will also propose a significant increase in information technology research. That's an initiative we rolled out last year. The arguments are clear: information technology has been responsible for roughly a third of our recent economic growth. It's an extraordinary, booming industry. The federal government needs to continue to make the investment in long-term basic research to assure that America is in the lead in information technology 10 years from now, 20 years from now. So the President is giving another very large boost to his information technology budget.

There are a variety of other initiatives in the budget, but the President is going to try roll our three main messages today, and you've seen them in his speech. He's going to remind us that science and technology really fuels economic growth. And you've heard Alan Greenspan talk about that on a number of occasions. He's going to want to point out the importance of the American people not only benefiting from science and technology, all Americans, but also understanding how important investment in science and technology is to all of their lives, health, environment, new kinds of energy and everything that they need in their day-to-day lives.

He is also going to talk about how important science and technology is to protecting our environment. We want our economy to continue to grow, we want to do it in a way that is sustainable, that makes sure that our children and their children have clean air to breathe and clean water to drink and an environment that they enjoy living in. That requires smart decisions and it requires science and technology. That's the third point he's going to make.

So those are the principal messages. He'll challenge the research community to ensure that while we're doing this important science, while we're carrying out this research we keep in mind some fundamental values of our society and he'll give some examples of that.

Let me turn to Rita. As you know, Rita is the Director of the National Science Foundation, an extraordinary leader in science and she's with us on this trip and will tell us in a minute how the National Science Foundation, in particular, is going to make use of this quite extraordinary budget request.

DR. COLWELL: The President is really making an historic announcement for the National Science Foundation, because it's the largest increase in the history of the National Science Foundation. Our mission is basic research and this is a most appropriate investment for the country to make; and that is, in the future of the country in science and technology.

Now, NSF is the lead agency for the information technology initiative and we'll be investing in a variety of aspects of scalability and encryptation of security, transmission of data, working on building the next stage of computers, the terra-scale computer, a second terra-scale -- that's a trillion calculations per second.

So we also do something very, very important that's not so well recognized. And that is producing the work force for the next generation. That is, we support up to 30,000 students with fellowships, assistantships, scholarships through the National Science Foundation. And so we will have the money now to explore the initiative of learning, how do children learn, tie this to teaching so that we can have the wherewithal for producing the highly skilled, technologically skilled work force for the 21st century.

We will also be emphasizing biocomplexity, which is the scientific underpinning for understanding the processes of environmental function -- function of the environmental systems, as Dr. Lane has pointed out, environmental protections, but bringing science to the fore, genomic sequencing, new molecular tools, remote sensing, application of information technology for modeling -- to be able to really build a full understanding of how the environment works, so that we can actually derive mathematical concepts to explain and predict in the case of environmental phenomena, as we've been so successful in doing with el nino, we will be able to incorporate a full understanding of how the planet really works.

So this is an historic event for the National Science. Scientists and engineers throughout the country are going to be ecstatic at learning that we are now moving toward addressing what has been becoming an imbalance between investment and biomedical research and the other research in physics, in chemistry, in mathematics and biology and the social sciences. We need the investment in these areas because from that basic research come the magnetic resonance imaging, the MRIs; come the advances in being able to devise drug treatment tailored to an individual using molecular structure analysis and being able to have prescriptions in the future that are not just a general prescription, but a prescription for you as an individual and you as an individual, based on your metabolism, your specific genetic traits and so forth.

So it's through the basic research that we do that's so important in physics, in mathematics, in chemistry and biology, that leads to the medical advances. And so we'll be able to invest this new money in these areas to bring a better balance into the basic sciences in the biomedical science investment. Thank you.

DR. LANE: Should we take questions, starting with you.

Q Just tell us about that one Center.

DR. LANE: The health issue, of course, is that we know from studies that have been done that some of our minority communities are affected disproportionately by certain kinds of health problems -- infant mortality, for example, is higher in some of our minority communities; instances of diabetes and other disease.

And so then the question is, how do you be sure that we're carrying out the necessary research to try to understand what these differences are, because we're essentially no different from one another, so why do we find communities with particular disease vulnerabilities. And I think the idea of the Center is not to generate a whole new set of research programs, because NIH is already supporting research in various disease areas -- heart and cancer and other areas -- that are relevant to all of us.

But we need to make sure that we are understanding what might be particular to minority communities. So the Center is in a coordination role. The purpose of the Center is to interact with all the different institutes at NIH and see that the whole is greater than the parts, make sure we've got some kind of coherent program to understand these important issues for so many of our citizens. So it's not a new institute, it's a coordination activity. It's, I think, $20 million in the President's budget, and I think it could be extremely powerful.

Q How has Congress reacted to the President's funding in these areas in previous years and how do you expect Congress to react to this request?

DR. COLWELL: Let me just comment that I have found, in this year and a half that I have been staff director, that there is very strong bipartisan support and recognition of the fundamental contribution of basic research to the betterment of society and certainly to the economy.

When Alan Greenspan continually says that at least 70 percent of our economic boom is due to technological advances, I think everyone across the country gets it.

Q How much did the President request last year and how much got in the budget?

DR. LANE: For the whole science and technology budget? I don't remember the numbers, but we'll get you the numbers. The Congress increased the funding above the President's request, even though the President's request was quite strong overall. The Congress increased funding for NIH, for example, NSF, Department of Defense research programs. And so I just want to underscore what Rita has said.

Science and technology has been an area that garnered strong bipartisan support and it should, because it's so clear from every study, every kind of data, economic analysis, that the federal investment in science and technology is about as good an investment as you can possibly make with the American taxpayer's money. And Republicans don't disagree with us on that, and Democrats don't disagree. So I think if there is any area of government where you can expect the two parties to get together, this is it. So I expect a very positive response, and what I've seen in the paper, in very early responses, in the Congress, pretty positive about the President bringing this unprecedented budget request in science and technology to the Congress. And I've had my -- Rita and I have both had conversations with key members of Congress on this issue, and the response has been very positive.

Q But do you have an estimate of how much the Congress increased the budget for science and technology last year, any ballpark estimate?

DR. NEAL: I don't know. We got a ballpark estimate for how much Congress increased science and technology beyond the President's request. I think we can find out, find the number, because we've got the numbers with us.

Q Can you talk about the pace of industry R&D, compared to the federal government?

DR. COLWELL: Industry has been increasing its investment in R&D but, as you know, it's usually the short-term, more applied approach to investment. And the federal investment has dropped significantly to roughly 30 percent of the total R&D. So --

DR. NEAL: As a fraction of the total, is what you're saying.

DR. COLWELL: That's right.

DR. NEAL: That doesn't mean that our -- it's not contradictory. In other words, the President's budget request has consistently been increasing; but industry's increase has been even larger. And one thing I think we all need to keep in mind is that when the President and Vice President came in at the beginning of the administration, they challenged the country to invest 3 percent of the GDP on research and development. And at that time, the number was probably 2.6 percent. So this was a huge gap. We are approaching 2.9 percent right now of GDP.

If you add together all of the national investment, public and private, in research and development, we are approaching 2.9 percent. That's a big increase.

Q Of GDP?

DR. NEAL: Of GDP. So we're getting close to the President and Vice President's target. And some of that has been our increase in federal investment. But as Rita points out, most of the increased investment has come from the private sector and it has been primarily short-term. You would expect that -- product development and applied research.

The other thing I would say is, why was it possible for industry to increase its investment to such an extraordinary degree in recent years? It's because of the healthy economy. And the healthy economy has certainly benefited from the policies of the administration and also from our government investments in R&D 10 years ago, or 20 years ago. So these things cycle back. They play on one another. And in the end it's very good news. We're very happy that the private sector is increasing its investment in R&D. And to show that, of course the administration has pushed for the R&D tax credit year after year.

DR. COLWELL: Can I just add that the National Science Foundation represents only about 4 percent of the R&D, federal R&D budget. But we fund 50 percent of university-based research. And it's the university-based research, when you track patents, that we find a 50 percent increase of the patents that have been filed have cited, or depended on, university-based research. So this investment really is investing in the future.

Q What is the total dollar number of what you're asking? The increase is $2.8 billion? What would the dollar impact be overall?

DR. NEAL: The $2.8 billion increase is in a collection of agencies' budgets. The $2.8 billion increase that the President is requesting is in a collection of agencies and programs that all support science and technology. It's something we call the 21st century research fund. For example, it's all of NIH, it's all of NSF, it's the science programs in NASA, Energy, Defense.

And that number will be about $43 billion in the request for 2001, and that will be 2.8 more than the current number. And if I could subtract, I would give you the current number. But it's going from about $40 billion to $43 billion.

Q Forty-one billion is obviously a significant number.

DR. NEAL: Yes.

Q This is not -- no one feels starved, at this point. These research institutions always, obviously, can use more.

DR. COLWELL: We're working our way up to what the investment really should be in basic research. This is a very, very good budget and I think it's getting us on the right track toward where we need to go.

Q What do you think the best comparison should be between the federal government investment in R&D and industry? I mean, what would be the best number?

DR. COLWELL: What kind of things or the dollars?

Q The total dollar -- compared to what you think would be needed to keep investment in R&D going.

DR. NEAL: Well, I'm not going to speculate on what the right balance between the federal investment and the private sector should be. But let me say a couple of things and then Rita can express her views on this.

I think the President's and Vice President's target for all of R&D, 3 percent of GDP, that was a very ambitious target, there's no formula that produces 3 percent of GDP. What the President and Vice President were saying is, we know we should do more, we've got to get a target out there and reach it as soon as you can. And so I think once we reach that, we have to revisit what that target is.

Then within that, you asked the question about the appropriate role between the public and private. My view is, the federal investment is so clearly in the best interest of the country, that if you can afford it -- and that's a decision that the President has to make with the Congress -- if you can afford it, you want to increase the federal investment in R&D, particularly the basic research. Because every economic analysis that I know says that if you track that downstream the pay-off from that investment for the country -- not for one company -- before the whole country is as high as any kind of investment you can make with that money.

So I think just like my own household, if it's the best investment I can make, put as much money into it as you can afford, in a reasonable time. And Neal can't make a judgment on how much we can afford; but the President, working with the Congress, has that kind of choice to make.

DR. COLWELL: I think that Neal has said it extremely well. Investing in basic research is the investment you make in the future. So the judgment that you have to make as to where you want the country to be five or 10 or 20 years from now -- and that's why the basic research aspect of it is so critical.

Q Thank you very much.

Q Where is the R&D credit for this? Is this included or --

DR. NEAL: The R&D tax credit proposal in this budget --

Q -- another one this year?

DR. NEAL: It's a five-year R&D tax credit, right? And I think the administration has been pretty clear that the R&D tax credit is an excellent mechanism and you ought to continue it for as long as you -- it ought to be as long as you can afford it. And five years was what got passed this last time.

Q Thank you

END 9:15 A.M. EST