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Appendix E
Estimated Recommendation Cost Tables

The following tables provide each implementation action and a “back of the envelope” estimate of the incremental annual cost to the federal government for each. These cost estimates are to illustrate the size of the program the committee is proposing and are not definitive. To obtain a more definitive estimate, economic modeling would be necessary.

Since the prepublication version of the report was released on October 12, 2005, policy-makers have requested a 10-year annual cost estimate for the committee’s recommendations. That estimate is what is presented here. In developing this estimate, the committee collected more detailed information than it had at that time to develop these cost estimates. In addition, we have attempted to provide sufficient information so that the cost estimates could be re-created.

In many cases, programs are phased in over a number of years. In addition, some of the scholarship and fellowship programs take 3-4 years to reach steady state.

The aggregate cost estimate of all the recommendations remain in the same range as the committee developed in October 2005. The cost estimate at that time was $9.2 to $23.8 billion. The current aggregate cost estimate is $8.6 to $19.8 billion.



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Appendix E Estimated Recommendation Cost Tables The following tables provide each implementation action and a “back of the envelope” estimate of the incremental annual cost to the federal gov- ernment for each. These cost estimates are to illustrate the size of the pro- gram the committee is proposing and are not definitive. To obtain a more definitive estimate, economic modeling would be necessary. Since the prepublication version of the report was released on October 12, 2005, policy-makers have requested a 10-year annual cost estimate for the committee’s recommendations. That estimate is what is presented here. In developing this estimate, the committee collected more detailed informa- tion than it had at that time to develop these cost estimates. In addition, we have attempted to provide sufficient information so that the cost estimates could be re-created. In many cases, programs are phased in over a number of years. In addi- tion, some of the scholarship and fellowship programs take 3-4 years to reach steady state. The aggregate cost estimate of all the recommendations remain in the same range as the committee developed in October 2005. The cost estimate at that time was $9.2 to $23.8 billion. The current aggregate cost estimate is $8.6 to $19.8 billion. 501

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502 RISING ABOVE THE GATHERING STORM Gathering Storm Annual Cost Estimate, by Recommendation, 2007-2016 (millions of dollars) Recommendation 2007 2008 2009 2010 2011 K–12 376 747 1219 1689 1976 Research 1670 2790 4010 5430 6850 Higher Education 1100 1700 2300 2675 2675 Innovation 5423 5423 5423 5423 5423 TOTAL 8569 10660 12952 15217 16924 Gathering Storm Annual Cost Estimate, by Action Item, 2007-2016 (millions of dollars) Action Item Recommendation 2007 2008 2009 2010 A-1 Recruit 10,000 Teachers 110 295 550 815 A-2a Summer Institutes 40 80 120 120 A-2b Master’s Program 46 92 158 224 A-2c AP/IB Teacher Incentives 100 179 265 363 A-2d Science and Math Curriculum 20 20 20 20 A-3 AP/IB Student Incentives 60 81 106 147 Total (K–12) 376 747 1219 1689 B-1 Long-Term Basic Research 800 1700 2700 3900 B-2 Early-Career Research Award 20 40 60 80 B-3 Research Infrastructure 500 500 500 500 B-4 High-Risk Research 0 0 0 0 B-5 ARPA-Energy 300 500 700 900 B-6 Presidential Innovation Award 50 50 50 50 Total (Research) 1670 2790 4010 5430 C-1 Undergraduate Scholarships 375 750 1125 1500 C-2 Graduate Portable Fellowships 225 450 675 675 C-3 Continuing Educ. Tax Credit 500 500 500 500 C-4 Expedite Visa Processing 0 0 0 0 C-5 Intl Student Work Permits 0 0 0 0 C-6 Skills-Based Immigration Policy 0 0 0 0 Total (Higher Education) 1100 1700 2300 2675 D-1 Intellectual Property Protection 323 323 323 323 D-2 R&D Tax Credit 5100 5100 5100 5100 D-3 Innovation Tax Incentives Study 0 0 0 0 D-4 Ubiquitous Broadband Internet 0 0 0 0 Total (Incentives for Innovation) 5423 5423 5423 5423 2007 2008 2009 2010 Grand Total (Billions of Dollars) 8.6 10.7 13 15.2

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503 APPENDIX E % of 5-Year Total Total 2012 2013 2014 2015 2016 in 2016 6007 2071 2091 2091 2091 2091 10.5 20750 8250 9650 9650 9650 9650 48.6 10450 2675 2675 2675 2675 2675 13.5 27115 5423 5423 5423 5423 5423 27.3 64322 18419 19839 19839 19839 19839 99.9 5-Year 2011 Total 2012 2013 2014 2015 2016 965 2735 1040 1040 1040 1040 1040 120 480 120 120 120 120 120 290 810 310 330 330 330 330 400 1307 400 400 400 400 400 20 100 20 20 20 20 20 181 575 181 181 181 181 181 1976 6007 2071 2091 2091 2091 2091 5200 14300 6600 8000 8000 8000 8000 100 300 100 100 100 100 100 500 2500 500 500 500 500 500 0 0 0 0 0 0 0 1000 3400 1000 1000 1000 1000 1000 50 250 50 50 50 50 50 6850 20750 8250 9650 9650 9650 9650 1500 5250 1500 1500 1500 1500 1500 675 2700 675 675 675 675 675 500 2500 500 500 500 500 500 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2675 10450 2675 2675 2675 2675 2675 323 1615 323 323 323 323 323 5100 25500 5100 5100 5100 5100 5100 0 0 0 0 0 0 0 0 0 0 0 0 0 0 5423 27115 5423 5423 5423 5423 5423 2011 10045 2012 2013 2014 2015 2016 16.9 64.4 18.4 19.8 19.8 19.8 19.8

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504 RISING ABOVE THE GATHERING STORM Action A-1 (Recruit 10,000 Teachers) Detailed Analysis Year 2007 2008 2009 2010 Millions of Dollars Scholarships 75 225 450 675 Bonuses 0 0 0 40 Institutional Awards 35 70 100 100 Total 110 295 550 815 Scholarship if $15,000 per Year Number of Old Students 5000 5000 15000 30000 Number of New Students 10000 15000 15000 Scholarship $ 15000 15000 15000 15000 Total $M 75 225 450 675 Bonuses Number of Teachers 0 0 0 4000 Bonus $ 0 0 0 10000 Total $M 0 0 0 40 Institutional Matching Grants Number of Institutions 35 70 100 100 Grant $M 1 1 1 1 Total $M 35 70 100 100 Action A-2a (Summer Institutes) Detailed Analysis Year 2007 2008 2009 2010 Number of Teachers 16500 33500 50000 50000 Cost per Teacher ($) 2400 2400 2400 2400 Total ($M) 40 80 120 120 Action A-2b (Master’s Program) Detailed Analysis Year 2007 2008 2009 Number of Programs 100 200 300 400 Students per Program 20 20 20 20 Number of Students/Program 2000 4000 6000 8000 Cost per Student 23000 23000 23000 23000 Cost per Program ($M) 46 92 138 184 Number of Graduates 2000 4000 Cost per Bonus 10000 10000 Bonus Cost ($M) 20 40 Total ($M) 46 92 158 224 Breakdown of Program Cost ($) (100 students over a 5-year period) Course Development 100,000 Administrative Staff Cost 500,000 Tuition 1,500,000 Transportation Reimbursement 150,000 Equipment 50,000 Total $/Student 23,000 NOTE: Program cost estimate based on email from Hai-Lung Dai of the University of Pennsylvania to Deborah Stine dated December 20, 2005.

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505 APPENDIX E 2011 2012 2013 Steady State 825 900 900 900 40 40 40 40 100 100 100 100 965 1040 1040 1040 45000 55000 60000 60000 10000 5000 15000 15000 15000 15000 825 900 900 900 4000 4000 4000 4000 10000 10000 10000 10000 40 40 40 40 100 100 100 100 1 1 1 1 100 100 100 100 2011 2012 2013 Steady State 50000 50000 50000 50000 2400 2400 2400 2400 120 120 120 120 2010 2011 2012 2013 Steady State 500 500 500 500 20 20 20 20 10000 10000 10000 10000 23000 23000 23000 23000 230 230 230 230 6000 8000 10000 10000 10000 10000 10000 10000 60 80 100 100 290 310 330 330

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506 RISING ABOVE THE GATHERING STORM Action A-2c (AP/IB Teacher Incentive Program) Detailed Analysis Year 2007 2008 2009 Number of Math and Science AP/IB Teachers 14000 28000 42000 Number Laying the Foundation (LTF) 16000 32000 48000 (Pre-AP/IB) Teachers Training Fee per Teacher 800 800 800 Total Training Cost ($M) 24 48 72 Stipend Fee/AP/IB Teacher 1800 1800 1800 Total Stipends for AP/IB Teachers ($M) 25 50 76 Stipend Fee/LTF Teacher 1000 1000 1000 Total Stipends for LTF Teachers ($M) 16 32 48 Estimated Number of Passing AP/IB Scores 313500 385000 495000 Teacher Bonus for Passing AP/IB Scores 100 100 100 Total AP/IB Teacher Bonuses ($M) 31 39 50 Estimated Number of Passing LTF Scores 160000 384000 768000 Teacher Bonus for Passing LTF Scores 25 25 25 Total LTF Teacher Bonuses ($M) 4 10 19 Total ($M) 100 179 265 Action A-2d (Curriculum Standards) Cost: $100 million over 5 years Action A-3 (AP/IB Student Incentive Program) Detailed Analysis Year 2007 2008 Number of Math and Science AP/IB Students 570000 700000 Exam Fee (50% of $82 fee) 41 41 Total AP-IB Exam Fee Cost 23 29 Estimated Number of Passing AP/IB Scores 313500 385000 Student Mini-Scholarship for Passing AP/IB Scores 100 100 Total Mini-Scholarships 31 39 Number of Pre-AP/IB Students Taking Test 640000 1280000 Exam Fee (50% of $20 fee) 10 10 Total Pre-AP/IB Exam Fee Cost 6 13 Total ($M) 60 81

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507 APPENDIX E 2010 2011 2012 2013 Steady State 56000 56000 56000 56000 56000 64000 64000 64000 64000 64000 800 800 800 800 800 96 96 96 96 96 1800 1800 1800 1800 1800 101 101 101 101 101 1000 1000 1000 1000 1000 64 64 64 64 64 700000 870000 870000 870000 870000 100 100 100 100 100 70 87 87 87 87 1280000 2080000 2080000 2080000 2080000 25 25 25 25 25 32 52 52 52 52 363 400 400 400 400 2009 2010 2011 2012 Steady State 900000 1250000 1500000 1500000 1500000 41 41 41 41 41 37 51 62 62 62 495000 700000 870000 870000 870000 100 100 100 100 100 50 70 87 87 87 1920000 2560000 3200000 3200000 3200000 10 10 10 10 10 19 26 32 32 32 106 147 181 181 181

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508 RISING ABOVE THE GATHERING STORM Action B-1 (Research Funding) Detailed Analysis: The base for this cost estimate was determined using information from the following National Science Foundation (NSF) publication: Federal Funds for Research and Development: Fiscal Years 2002, 2003, and 2004 (Publication No: NSF 05-307), which identifies the amount of basic research funding, by agency, in the physical sciences, mathematics, computer sciences, and engineering. (FY 2004 is the most recent year this information is available.) This is summarized in the table below: Preliminary federal obligations for basic research in the physical sciences, mathematics, computer sciences, and engineering, by agency, FY 2004a Funding Percent AGENCY (Billions) of Total All agencies $7.4 Department of Defense $1.1 15% Department of Energy $2.1 28% NASA $1.5 21% NSF $1.9 26% aOther agencies which fund these areas are Department of Commerce, Department of Health and Human Services (HHS), US Department of Agriculture, Department of Homeland Secu- rity, Department of Interior, Veteran’s Administration, and Environmental Protection Agency. HHS is largest at 6%; remainder at 1% or less for a total of 10%. SOURCE: National Science Foundation. Federal Funds for Research and Development: Fiscal Years 2002, 2003, and 2004. NSF 05-307. Arlington, VA: National Science Foundation, 2005. The committee also proposed that all of DOD basic research funding be increased. The following number provides the amount of DOD basic research funding included and not included in the table above (i.e., not in the research fields identified): DOD Basic Research Funding (including above): $1.6 billion (not including above): $0.5 billion This provides a total base: $7.9 billion ($7.4B + $0.5B), which is that increased at a rate of 10% per year over the next 7 years as indicated in the recommendation. Year 2007 2008 2009 2010 2011 2012 2013 Millions 800 1700 2700 3900 5200 6600 8000 of Dollars Action B-2 (Early-Career Research Grants) Detailed Analysis: As with the scholarship programs, this estimate gradually increases over time as the $500,000 research grants are payable over 5 years. Steady Year 2007 2008 2009 2010 State #Previous Researchers 200 400 600 800 #New Researchers 200 200 200 200 200 Research $ 100000 100000 100000 100000 100000 Total $M 20 40 60 80 100

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509 APPENDIX E Action B-3 (Advanced Research Instrumentation and Facilities) Detailed Analysis: This proposed action indicates that the funding will be $500 million per year for the next 5 years. Year 2007 2008 2009 2010 2011 Millions of Dollars 500 500 500 500 500 Action B-4 (High-Risk Research) Detailed Analysis: No new funds required for this action—just a specification that 8% of existing funds will be directed toward high-risk research. Action B-5 (ARPA-E) Detailed Analysis: This recommendation indicates that ARPA-E will be funded at $300 million per year, gradually increasing over 5-6 years to $1 billion per year at which time it would be evaluated. Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Millions 300 500 700 900 1000 1000 1000 1000 1000 1000 of Dollars Action B-6 (Presidential Innovation Award) Detailed Analysis: This program for a Presiden- tial Innovation award would not require a monetary award, but one may be provided as indicated here. Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Millions 50 50 50 50 50 50 50 50 50 50 of Dollars Action C-1 (Undergraduate Scholarships) Detailed Analysis: The committee recommends that up to $20,000/year be provided for scholarships. This analysis focuses on the mid- range scholarship of $15,000/year. This allows the amount of the scholarship to vary relative to an institution’s tuition. Because scholarship programs provide funding for a number of years, this program will take several years to reach steady state (when the number of new students entering is equal to the number of old students graduating and no longer receiving a scholarship). Year 2007 2008 2009 2010 Steady State #Old Students 25000 50000 75000 100000 #New Students 25000 25000 25000 25000 Scholarship $ 15000 15000 15000 15000 15000 Total $M 375 750 1125 1500 1500

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510 RISING ABOVE THE GATHERING STORM Action C-2 (Graduate Fellowships) Detailed Analysis: As with the undergraduate scholar- ships, the committee recommends that up to $20,000/year be provided for fellowships. This analysis focuses on the mid-range fellowship of $15,000/year. This allows the amount of the fellowship to vary relative to an institution’s tuition. Because fellowship programs provide funding for a number of years, this program will take several years to reach steady state. This program also provides a stipend for the graduate student at $30,000/year. Year 2007 2008 2009 Steady State #Old Students 5000 10000 15000 #New students 5000 5000 5000 Fellowship $ 15000 15000 15000 15000 Stipend $ 30000 30000 30000 30000 Total $M 225 450 675 675 Action C-3 (Continuing Education) Detailed Analysis: Based on a similar existing credit, the budget for this action is assumed to be $500 million per year. Education tax credits are available to individual families to help defray the cost of college. According to the College Board, the federal government provided $81.5 billion in student aid during 2003-2004. This can be roughly disaggregated as follows: 70% loans, 21% grants, 8% tax benefits. The tax benefits (Hope and Lifetime Learning Credits) amounted to approximately $6.3 billion. The $500 million the committee proposes is a modest amount in this context designed to spur corporate sponsorship of continuing education. The cap on tax credits could be increased over time or even lifted altogether. The following Web page provides an overview of existing tax credits: http://www.ed.gov/offices/OPE/PPI/HOPE/index.html. Actions C-4 to C-7 (International Students and Scholars) Detailed Analysis: These are assumed to have no major cost as they involve only a policy change. Action D-1 (Enhance Intellectual Property Protection) Detailed Analysis: The base amount for this estimate is the FY 2006 request for the US Patent and Trademark Office which was $1.7 billion, a 10% increase from FY 2005. The proposed $340 million per year, reflects a 20% increase in FY 2007 in order to institute a post-grant review system and enhance other capabilities aimed at increasing the quality and timeliness of patent examinations. The other proposed changes do not require funding. Year 2007 2008 2009 2010 2011 2012 2013 2014 Millions 340 340 340 340 340 340 340 340 of Dollars

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511 APPENDIX E Action D-2 (Strengthen the R&D Tax Credit) Detailed Analysis: Tax credits vary from year to year. In FY 2005 the R&D tax credit was forecast to cost $5.1 billion. Since the amount of the R&D tax credit in any given year depends on overall corporate profitability and tax liability, as well as on R&D spending decisions, the overall cost cannot be determined precisely in advance. Maintaining the existing R&D tax credit, therefore, is assumed to result in no incremental cost. The proposed doubling of the existing R&D tax credit is assumed to cost about the same as the existing R&D tax credit, but the actual increment could be larger or smaller. In addition, the proposed expansion of the number of companies eligible for the R&D tax credit is not reflected in the $5.1 billion figure as the number of companies who might potentially be involved is unknown. Year 2007 2008 2009 2010 2011 2012 2013 2014 Millions 5100 5100 5100 5100 5100 5100 5100 5100 of Dollars Action D-3 (Innovation Tax Incentive Study) Detailed Analysis: The proposed studies should be able to be performed within existing budgets. Action D-4 (Ubiquitous Broadband Internet) Detailed Analysis: The most important steps would not necessarily entail federal outlays.

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