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DEPARTMENT OF COMMERCE
AT A GLANCE:
2006 Discretionary Budget Authority:
(Increase from 2005: 49 percent)

$9.4 billion

Major Programs:
• Economic Development
• International Trade
• Patent and Trademark Office
• Scientific and Technological Standards
• Census Bureau
• Oceanic and Atmospheric Science and Management

MEETING PRESIDENTIAL GOALS
Promoting Economic Opportunity and Ownership
• Promoting economic growth and entrepreneurship in economically distressed areas by proposing
the new Strengthening America’s Communities Grant Program.
• Growing the economy by expanding access to foreign markets by helping nearly 900 U.S. firms
export for the first time and facilitating over 6,000 transactions to new markets.
• Advancing science and technological leadership by improving the quality and processing times
for patents and trademarks and enhancing standards research on emerging technologies.

Protecting America
• Efficiently protecting U.S. national security through programs that control the export of sensitive goods by ensuring up-to-date export control lists and timely processing of export licenses.

Making Government More Effective
• Improving fishery management and the accuracy of weather, climate, and ocean-conditions
forecasts through targeted investments and improved program design.

73

74

DEPARTMENT OF COMMERCE

PROMOTING ECONOMIC OPPORTUNITY AND OWNERSHIP
Enhancing Economic Development and Trade
The President’s 2006 Budget creates a new economic development program within the Department
of Commerce, the Strengthening America’s Communities Grant Program. The President’s proposal
replaces the current duplicative set of Federal community and economic development programs with
a more consolidated approach that focuses resources on the creation of jobs and opportunities, encourages private sector investment, and includes rigorous accountability measures and incentives.
The Strengthening America’s Communities Grant Program is a targeted, results-oriented approach
that will encourage innovation and economic opportunity. By streamlining the delivery of Federal
economic development programs, taxpayers will see administrative savings. The President’s Budget
includes $3.7 billion for this program to provide economically distressed communities with a source
of funding for planning, infrastructure development, and business financing to achieve long-term
economic stability and growth (see table below).

Promoting Results-Oriented Economic Development
The 2006 Budget proposes a new approach, the Strengthening America’s Communities Grant Program,
for targeting assistance to needy communities and focusing on achieving tangible results for low-income
persons and economically distressed areas:
Old Model

New Approach

Clear Purpose

Programs lack clarity in purpose and
overlap in mission and function.

Clear objectives focusing on: job
creation, homeownership, commercial
development, reducing blight, and
private sector investment.

Targeted to Need

38 percent of Community Development
Block Grant funds go to States and
communities with poverty rates that are
lower than the national average.

Target resources only to communities
that need assistance, based on poverty
and job loss.

Efficiency

The sprawling bureaucracy at
the Federal level has duplicated
bureaucracies at the local level with
funding provided to over 3,000 grantees
a year. As a result, funding is spread
thinly across the Nation with very little to
demonstrate relative to total investment.

Streamline Federal programs to
eliminate inconsistent criteria and
reduce administrative burdens and red
tape.

Leverage Private
Sector

Too little focus on whether economic
and community development projects
lead to sustained economic growth and
opportunity.

Work with the private sector to identify
opportunities for economic growth in
distressed areas.

Results and
Accountability

Focus on short-term outputs rather than
long-term outcomes that demonstrate
improvement toward community
self-sufficiency.

Hold grantees accountable for achieving
results and make continued funding
contingent upon demonstrating
progress.

THE BUDGET FOR FISCAL YEAR 2006

75

Our changing economy presents challenges for certain communities where traditional industries,
such as manufacturing, do not employ as many workers as they did a generation ago. The President
has proposed a new Opportunity Zone Initiative that will help these local economies adapt and diversify by targeting Federal resources and encouraging new and existing businesses to invest in these
areas. The Commerce Department will have the lead role in managing this initiative. These efforts,
combined with the President’s tax relief packages and initiatives to increase homeownership and reduce regulatory burdens, will help more communities participate in our growing national prosperity.
The Minority Business Development Agency (MBDA) also strives to improve economic opportunity.
In 2004, MBDA programs provided assistance and improved access to financial and procurement
opportunities to over 25,000 clients nationwide. In the spring of 2004, the President, by Executive
Order, renewed the Advisory Commission on Asian Americans and Pacific Islanders. The 2006 Budget supports increases for the Commission’s efforts to improve economic opportunities.
Enhancing the growth of export businesses and reducing barriers to trade help strengthen the
economy. The Budget provides a program level of $409 million for the International Trade Administration (ITA) for trade promotion and compliance activities. This level of funding will expand the
U.S. exporter base by increasing the number of U.S. exporters entering new markets and the number
of U.S. firms exporting for the first time, and by supporting efforts to ensure compliance with trade
agreements.
China is our third largest trading partner. Currently, there are almost 13,000 U.S. small- and
medium-sized enterprises that export to China. Nevertheless, trade with China continues to present
a number of challenges for U.S. companies. ITA, together with other Federal agencies, has worked
to help U.S. companies overcome these barriers. Recently, ITA has increased staff working on market access problems in China, created a China Business Information Center to better advise small
and medium-sized companies on doing business with China, increased its staff at our Embassy and
Consulates in China, and created a China office in the Import Administration to better focus resources on China anti-dumping cases. To help ensure that China honors its World Trade Organization commitments, the United States continues to engage China on specific trade issues in a number
of forums, including the Joint Commission on Commerce and Trade (JCCT). The first meeting of the
ministerial-level JCCT, held in mid-2004, achieved progress on several important issues, including
technical standards and distribution services, and strengthened commitments to improve intellectual property right protections.

Building the Infrastructure for Innovation
The 2006 Budget includes increases for Commerce programs that support and enhance innovation
and technological advancement—creating the conditions for economic growth.
The Patent and Trademark Office (PTO) issues patents, registers trademarks and works to protect
U.S. intellectual property rights holders through international treaties and enforcement training programs. The 2006 Budget requests a program level of $1.7 billion for PTO, a 10-percent increase from
2005. This program level provides PTO full access to its fee collections in 2006. PTO developed an
aggressive strategic plan and proposed legislative changes to restructure patent and trademark fees
to modernize and improve its operation. This included initiatives to improve the quality and the processing times of patents and trademarks, and initiatives to improve electronic filing and processing
of applications. The Congress enacted many aspects of the modernization bill in the 2005 Consolidated Appropriations Act. The increase in the 2006 Budget should enable PTO to continue to make
progress in achieving its performance goals, increasing the percentage of patents and trademarks
processed electronically to 100 percent by 2006, and achieving complete review of patent applications in an average of 31 months and trademark applications in an average of 15 months by 2010.

76

DEPARTMENT OF COMMERCE

PROMOTING ECONOMIC OPPORTUNITY AND OWNERSHIP—Continued

Protecting Intellectual Property Rights Abroad
Together with ITA and other Federal agencies, PTO is participating in the Administration’s Strategy Targeting Organized Piracy (STOP!) Initiative, launched in October 2004. This initiative targets the global trade
of pirated and counterfeit goods that threatens America’s innovation economy. PTO has developed a comprehensive guide, and telephone hotline available at www.stopfakes.gov to help American innovators and
businesses safeguard their ideas and inventions. In addition, PTO is enhancing its Office of Enforcement to
better assist foreign countries in the enforcement of intellectual property rights.

The National Institute of Standards and Technology (NIST) develops technical standards necessary to support existing industries and to enable development of emerging technologies. The Budget
provides $485 million, a 7.5-percent increase over 2005, for measurement and standards research related to nanotechnology, biosciences, manufacturing, computing and networking systems, and public
safety, and for the renovation and repair of NIST labs. With these resources, NIST will be able to address a broad array of national scientific and technical infrastructure needs by building intramural
capacity and leveraging complementary external research efforts through collaboration and partnerships.
Telecommunications and information-related industries are an increasingly important and growing part of the economy. The National Telecommunications and Information Administration (NTIA)
works to bring the benefits of advanced telecommunications technologies to millions of Americans
and promotes the efficient use of the Federal radio spectrum. In response to a Presidential directive,
NTIA has taken a lead role in the Government-wide effort to implement the Spectrum Policy for the
21st Century. The 2006 Budget supports this initiative to improve domestic and international spectrum management.

Providing Key Information about the Population
and Economy
Information about the economy and population is essential for monitoring and improving the Nation’s economic and social conditions. The
Bureau of Economic Analysis (BEA) calculates the gross domestic product and related essential economic measures. The 2006 Budget requests
increases for BEA to continue to improve the timeliness and quality of
its economic data.

The Census Bureau plans to use
hand-held computing devices with
global positioning system capability
during the 2010 Census to improve
the efficiency of data collection and
processing.

The Census Bureau conducts surveys and censuses that measure
changing demographics and the economic condition of the Nation. The
2006 Budget provides increases for the Census Bureau to continue its
reengineering efforts for the 2010 Census. This includes early planning
and testing to contain costs and to improve the efficiency of data
collection activities.

THE BUDGET FOR FISCAL YEAR 2006

77

PROTECTING AMERICA
The Bureau of Industry and Security (BIS) helps protect against the export of goods and technologies sensitive to U.S. national security and economic interests. Export controls on sensitive dual-use
commodities are necessary to stem the proliferation of weapons of mass destruction, to halt the spread
of weapons to terrorists or countries of concern, and to further important U.S. foreign policy objectives. BIS also assists other countries in developing and strengthening their national export control
systems. The Budget requests an additional $10 million for initiatives to improve BIS’ ability to
maintain an up-to-date export control list and enhance enforcement activities to ensure sensitive
goods and technologies do not fall into the wrong hands.

78

DEPARTMENT OF COMMERCE

MAKING GOVERNMENT MORE EFFECTIVE
Improving Environmental Stewardship
Through targeted investments and improved program design, the 2006 Budget will provide
resources to enhance effective management of ocean and coastal resources, and observation
and prediction of changes in the earth’s environment by the National Oceanic and Atmospheric
Administration (NOAA). The release of the final report from the U.S. Commission on Ocean Policy
last fall highlighted the importance of sound management of ocean resources. In addition, the recent
hurricanes in the southeastern United States and tsunami in the Indian Ocean demonstrated the
value of accurate prediction and warning networks for atmospheric and oceanic systems.
The U.S. Commission on Ocean Policy, a council mandated to conduct a comprehensive review of
national ocean policy, released its final report in 2004, which called for changes to increase the effectiveness of oceans programs. The Budget provides support for the U.S. Ocean Action Plan that was
developed in response to the Commission’s report. New investments and program improvements
within NOAA are aimed at strengthening our knowledge and management of ocean resources. For
example, funding for effective fisheries management, including a new fishery research vessel, will
enable NOAA to better assess the status of fish stocks and increase the number of stocks that are
harvested at sustainable levels. Funds are also provided to assist in adoption of individual fishing quota (IFQ) systems, consistent with the Administration’s important proposed reforms to the
Magnuson-Stevens Fishery Conservation and Management Act. IFQ systems offer a market-based
approach that moves fisheries management away from more cumbersome and inefficient regulatory
policies.

Winter Flounder, Georges Bank Stock

Atlantic Cod, Georges Bank Stock

Biomass in thousands of metric tons

Biomass in thousands of metric tons

12

250

Rebuilt Level
10

Rebuilt Level
200

8
150

6

Overfished Level

Overfished Level
100

4
50

2

0

0
1990
Source: NOAA.

1992

1994

1996

1998

2000

2002

2004

1990

1992

1994

1996

1998

2000

2002

2004

Source: NOAA.

Populations of New England groundfish species, including Georges Bank Winter Flounder and Atlantic Cod,
reached record lows in the 1990s due to overfishing. Management measures aimed at rebuilding these
stocks were introduced by NOAA and the New England Fishery Management Council in 1994. Some stocks,
such as Winter Flounder, have responded quickly. However, for other species, such as Atlantic Cod, management challenges remain.

THE BUDGET FOR FISCAL YEAR 2006

79

Management of marine resources will also be enhanced through funding to implement local action plans to protect coral reefs based on strategies developed with State and local governments and
stakeholders.
Restoration of threatened and endangered salmon stocks
is important for environmental quality, Native American
communities, commercial and recreational fishermen, and
the economic vitality of the Pacific Northwest. The aim of
the Pacific Coastal Salmon Recovery Fund is to help restore
these stocks through improvement and expansion of habitat.
However, a 2004 Program Assessment Rating Tool analysis
found that the program was not able to allocate funding
according to the recovery needs of sensitive salmon populations.
The Administration continues support for the Recovery Fund
and proposes improvements to help ensure funds are allocated
to high priority activities.
The Commission on Ocean Policy also commended the work
of NOAA’s Sea Grant program, highlighting its capability to
gather local and State input on research priorities. The Budget
continues support for Sea Grant, which will focus this valuable
capability on important regional ocean and coastal ecosystem
concerns.
Accurately predicting storm and other weather events and
tracking changes in the climate over time are important to
public safety and for averting economic losses. The 2006
Budget provides planned increases for continued development
and acquisition of weather satellites. In addition, the Budget
supports increases within the climate program, specifically
focusing on the strategic programs of the President’s Climate
Change Research Initiative.

As part of the U.S. National Tsunami Hazard
Mitigation Program, NOAA maintains the Deep
Ocean Assessment and Reporting of Tsunamis
(DART) Project, a moored buoy system that
provides accurate and timely tsunami warning
information.
DART helps scientists better
predict tsunami behavior, which will ultimately
save lives and property. The 2006 Budget
includes $9.5 million to improve U.S. tsunami
warning capabilities.

The Budget also supports progress towards the goals of the U.S. Integrated Earth Observation
System, which will provide improved coordination, capability and data management for weather
prediction, natural disaster management, climate research, and ocean resources management. The
devastating impact of the recent tsunami in South Asia demonstrates the potential value of this
effort.

Improving Effectiveness by Realigning Other Commerce Programs
Consistent with the Administration’s emphasis on shifting resources to reflect changing needs, the
2006 Budget proposes to terminate the Advanced Technology Program. This proposal is consistent
with the 2005 Consolidated Appropriations Act which did not provide funding for new awards. The
Administration believes that other NIST programs are more effective and important in supporting
the fundamental scientific understanding and technological needs of U.S.-based businesses, American workers, and the domestic economy.
The 2006 Budget proposes to fund the Hollings Manufacturing Extension Partnership Program
at $47 million, a 50-percent reduction from the 2005 grant level. The Administration’s approach
will maintain a strong national network of centers while focusing funding based on centers’ performance in providing information and consulting services to small manufacturers. The program has
also augmented funding through expanding partnerships with other agencies and institutions. Given

80

DEPARTMENT OF COMMERCE

MAKING GOVERNMENT MORE EFFECTIVE—Continued
this new operating environment, the Administration believes the program has evolved to a stage at
which less reliance on direct appropriations is required.
To reduce duplication within Government services, the Budget also proposes to terminate the Public Telecommunications Facilities, Planning and Construction program. This program has recently
targeted funding toward the purchase of digital transmission equipment by public broadcasting stations; the 2006 Budget proposes that a portion of the Corporation for Public Broadcasting’s already
enacted 2006 funding be made available for this purpose.
To improve efficiency, the Budget also streamlines administrative layers within the Economics and
Statistics Administration and the Technology Administration.

Update on the President’s Management Agenda
The table below provides an update on the Department of Commerce’s implementation of the
President’s Management Agenda as of December 31, 2004.

Human Capital

Competitive
Sourcing

Financial
Performance

E-Government

Budget and
Performance
Integration

Status
Progress
Arrows indicate change in status since evaluation on September 30, 2004.
During 2004, Commerce made significant progress in reducing workforce skill gaps in mission critical areas
and reducing average hiring times. Commerce also resolved remaining areas of financial management
non-compliance and developed a plan for expanding the use of its financial reporting systems to improve
operations in additional key business areas; actively contributed to several E-Government initiatives, including
Export.gov to improve potential exporters’ access to trade information; and completed Program Assessment
Rating Tool evaluations on over two-thirds of its programs.

THE BUDGET FOR FISCAL YEAR 2006

81

Department of Commerce
(In millions of dollars)
Estimate
2005
2006

2004
Actual
Spending
Discretionary Budget Authority:
Departmental Management:
Salaries and Expenses ..................................................................................
Emergency Guaranteed Loan Program accounts................................
Headquarters Renovation .............................................................................
Office of the Inspector General ...................................................................
Subtotal, Departmental Management ...........................................................
Economic Development Administration ........................................................
Economic Development Challenge ................................................................
Bureau of the Census .........................................................................................
Economic and Statistics Administration .......................................................
International Trade Administration ..................................................................
Bureau of Industry and Security .....................................................................
Minority Business Development Agency......................................................
National Oceanic and Atmospheric Administration (NOAA):
Operations, Research and Facilities .........................................................
Procurement, Acquisition and Construction ...........................................
Other accounts ..................................................................................................
Subtotal, NOAA .....................................................................................................
Patent and Trademark Office (PTO):
Program Level ...................................................................................................
Offsetting Collections ......................................................................................
Subtotal, PTO.........................................................................................................
Technology Administration ................................................................................
National Institute of Standards and Technology (NIST):
Scientific and Technical Research and Services..................................
Industrial Technology Services ...................................................................
Construction of Research Facilities ...........................................................
Subtotal, NIST .......................................................................................................
National Telecommunications and Information Administration ............
Total, Discretionary budget authority .................................................................

49
52
—
21
122
308
—
609
73
336
67
29

47
—
—
21
68
284
—
745
79
398
67
30

54
50
30
23
57
27
3,710
877
85
396
77
31

2,697
961
11
3,669

2,852
1,038
18
3,908

2,608
965
11
3,584

1,221
1,321
100
6

1,555
1,563
8
6

1,703
1,703
—
4

336
208
64
608
48
5,775

379
244
73
696
38
6,311

426
47
59
532
23
9,403

...............

—

21

—

Total, Discretionary outlays ...................................................................................

5,704

6,122

6,383

Total, Mandatory outlays ........................................................................................

151

161

124

Total, Outlays ..............................................................................................................

5,855

6,283

6,507

Credit activity
Direct Loan Disbursements:
Fisheries Finance Direct Loan Financing account ...................................
Total, Direct loan disbursements .........................................................................

98
98

14
14

12
12

Memorandum: Budget authority from enacted supplementals


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102