President's Budget Move in Right Direction But More Needed

February 13, 2012

WASHINGTON - ITIF President Rob Atkinson made the following statement in response to President Obama's proposed fiscal year 2013 budget released today.

"In his proposed fiscal 2013 budget, the President has chosen to invest today for a better future. However, we would like to see him set a more urgent pace down that path because the future has already caught up with usand we need to make up for lost time.

The President's call for increases in R&D through the National Science Foundation, the Department of Energy, NIST, and other agencies help set the nation's sights on our long-term innovation potential, not our short-term fiscal limitations.

We appreciate the President's leadership in making competitiveness and manufacturing top priorities. As ITIF has explained, our neglect of these priorities contributed to the severity of the recession and the anemic recovery. If U.S. manufacturing is not globally competitive, then the robust recovery we all hope for might elude us for years to come. 

We welcome the Administration's proposal for an increase of $39 million for research at NSF aimed at developing new manufacturing technologies in partnership with the private sector as well as a new proposal for $21 million for the Advanced Manufacturing Technology Consortia program, a public-private partnership that will support research to address common manufacturing challenges faced by private sector businesses. At the same time, we are disappointed that the President would leave funding for the Manufacturing Partnership Extension flat. The MEP is exactly the kind of public-private partnership our manufacturers need to become more globally competitive.

We are encouraged by the President's determination to expand investments in clean energy innovation. Key energy innovation programs at the Department of Energy would receive a $580 million increase in funding. Across all government, the President is proposing to increase clean energy by $760 million. That includes a $75 million boost for the Advanced Research Projects Agency- Energy budget for a total $350 million. We also welcome the President's call for $5 billion for the 48(c) manufacturing tax credit. ITIF testified in support of this program last year. We are pleased by this commitment to what we see as one of the most promising agencies in government.

When it comes to taxes, the Administration is plainly aware of the decline in the generosity of the U.S. R&D tax credit compared to what is offered by dozens of other countries. Therefore, we commend the President for adopting ITIF's recommendation to extend the R&D credit and to raise the rate of the Alternative Simplified Credit to 17 percent (although it would be better to go to 20 percent, as ITIF has called for).

At the same time, we think the President's pledge to "not add a dime to deficit" with corporate tax reform is missing a key point: U.S. effective corporate tax rates remain among the highest in the world. Ultimately, corporate tax reform needs to lower statutory and effective rates if U.S. firms in traded sectors want to be globally competitive.

On the trade front, it would have been unwise for the President to do anything less than the modest increases he proposes for trade enforcement and export promotion activities at the Export-Import Bank, the Overseas Private Investment Corporation (OPIC) and other agencies. We need a more stern approach to cracking down on non-tariff barriers, rampant IP theft, and a host of dubious trade practices and innovation mercantilism than the President appears to be proposing.

With specific regard to intellectual property, it makes sense to give the U.S. Patent and Trademark Office (USPTO) full access to its fee collections. This will help that agency implement the America Invents Act and speed-up the unacceptable five-year time frame for getting a patent approved.


Finally, with regard to allocation of spectrum for more innovation in wireless communications, we support the President's efforts. The budget proposes 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. This is a very sound approach that allows public safety and commercial networks to share spectrum, devices, and software. Harmonizing public safety with commercial networks produces benefits in efficient use of spectrum and advanced technology for all Americans."



The Information Technology and Innovation Foundation (ITIF) is a Washington, D.C.-based think tank at the cutting edge of designing innovation strategies and technology policies to create economic opportunities and improve quality of life in the United States and around the world. Founded in 2006, ITIF is a 501(c)(3) nonprofit, non-partisan organization that documents the beneficial role technology plays in our lives and provides fact-based analysis and pragmatic ideas for improving technology-driven productivity, boosting competitiveness, and meeting today's global challenges through innovation. For additional information, visit ITIF at or contact Steve Norton at (202) 626-5758 or

Contact: Samantha Greene
Phone: (202) 626 5744