View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

DEPARTMENT OF COMMERCE
Since 2001, the Administration:
• Promoted a free-trade agenda, under which free trade agreements have been
signed or completed with 14 countries, and U.S. exports have grown by $200
billion—benefiting businesses of all sizes and American consumers;
• Improved the quality and timeliness of key information about the economy; and
• Improved weather forecasts by expanding observations and investing in forecast
model improvements. For example, the average lead time for tornado warnings has
improved by 30 percent since 2001.
The President’s Budget:
• As part of the President’s 10-year American Competitiveness Initiative, advances
technological innovation by supporting standards development and research in areas
including nanotechnology, hydrogen fuels, and quantum computing;
• Increases and better targets economic development assistance through the Economic
Development Administration as part of the Strengthening America’s Communities
Initiative;
• Further expands trade opportunities; and
• Improves weather and climate forecasting to benefit public safety and economic
growth.

53

54

DEPARTMENT OF COMMERCE

FOCUSING ON THE NATION’S PRIORITIES
Improve U.S. Competitiveness through Technological Innovation, International
Trade, and Economic Development
The President’s 2007 Budget includes increases for Department of Commerce programs that foster
U.S. leadership in science and technology. The Budget also sustains key programs at the Department that advance economic growth—international trade opportunities for businesses, fundamental
information about the economy and population used by businesses and all levels of government, and
economic development for our communities.

Increasing Physical Science Investment
As part of the President’s 10-year American Competitiveness Initiative that significantly increases Federal
funding for physical science research, NIST will target $535 million in 2007 for key investments that promote
U.S. innovation and global competitiveness. These investments will improve our ability to cost-effectively
manufacture products at a nano scale; expand NIST’s neutron facility to better characterize materials in
high growth research fields; address technological barriers to hydrogen storage, distribution, and fuel cell
fabrication; and improve our understanding of quantum information science that has the potential to dramatically improve computer processing speeds and enable more secure communications.

The National Institute of Standards and Technology (NIST) promotes U.S. innovation and competitiveness by advancing measurement science, standards,
and technology in ways that enhance economic growth
and improves our quality of life. Three NIST scientists
have received Nobel prizes in the last decade for fundamental breakthroughs in physical science research.
The Patent and Trademark Office (PTO) furthers
intellectual property through the issuance of patents
and registration of trademarks.
This protection
encourages technological advancement by providing
incentives to invent, invest in, and disclose new
technology worldwide, as well as assisting businesses
in protecting their investments, promoting quality
goods and services, and safeguarding consumers
against confusion and deception in the marketplace.
The President’s Budget provides PTO full access to its
fees and supports a 10-percent funding increase for
the patent and trademark programs, to continue to
improve the processing times and quality of patents
and trademarks.

As part of the American Competitiveness Initiative, NIST will
conduct fundamental research to enable the use of hydrogen
as a fuel. This image indicates how hydrogen atoms attach
to a special form of titanium oxide that shows promise as a
material for hydrogen storage.

THE BUDGET FOR FISCAL YEAR 2007

55

Curbing Intellectual Property Piracy
Intellectual property (IP) theft poses a serious threat to U.S. businesses. The President’s Budget sustains
support for initiatives to curb IP crime and strengthen enforcement as part of the Strategy Targeting Organized Piracy (STOP!). PTO and ITA are working with other agencies to reduce global trafficking in counterfeit and pirated products, including working to prevent such products from entering our borders, and helping
American businesses secure and enforce their rights in the global marketplace. PTO has launched a nationwide program to help small businesses better identify and address their IP protection needs. Through
its Global Intellectual Property Academy, PTO also provides technical assistance to our trading partners
in developing and maintaining IP systems and enforcement. ITA created an Office of Intellectual Property
Rights (IPR) Enforcement, which aggressively enforces trade agreements with specific attention to IPR.

Improving international trade opportunities is important for U.S. economic growth and competitiveness. The International Trade Administration (ITA) helps open and expand foreign markets for
U.S. goods and services. The Budget provides funding to facilitate fair competition in international
trade, and to increase the number of U.S. firms that are exporting for the first time or are entering
new markets. ITA is working closely with the United States Trade Representative and other agencies to ensure that our trading partners honor their World Trade Organization commitments and
U.S. companies benefit from opportunities for greater market access. ITA also works to develop free
trade agreements with other nations, to eliminate barriers to U.S. products and greatly improve U.S.
competitiveness. The 2007 Budget also supports Department of Commerce participation in the AsiaPacific Partnership, to promote the use of cleaner energy technologies in this rapidly growing region.

Expanding Trade Opportunities
Antenna Technologies Corporation, Inc.
(ATCi), is a small satellite communications
technology company in Arizona that manufactures a multi-beam antenna, which allows
customers to receive signals from up to 35
satellites simultaneously. ATCi technologies
are used in broadcasting industry and other
commercial and Government applications.
ATCi wanted to expand its international
business, and turned to ITA’s U.S. Export Assistance Center in Phoenix for help in crafting
international market entry strategies. ATCi
participated in export assistance programs
offered by ITA—including teleconferencing,
the Gold Key Matching Service, international
seminars, and catalog shows—that helped
Satellite antennas manufactured by Antenna Technologies Corporation,
facilitate meetings with international deleInc. of Arizona.
gates, agents and distributors, and led to
partnerships that boosted exports from less than 5 percent to more than 33 percent of ACTi’s sales. With
this assistance, ATCi products are now being exported to Europe, Asia, Africa, and South America.

56

DEPARTMENT OF COMMERCE

FOCUSING ON THE NATION’S PRIORITIES—Continued
Protecting American security, while advancing economic growth and trade, is the goal of the Bureau
of Industry and Security (BIS). BIS controls the export of sensitive commodities and technologies to
prevent the proliferation of weapons of mass destruction and halt the spread of weapons to terrorists and countries of concern. The Budget funds export control and enforcement activities for these
purposes.
Accurate and timely information about U.S. economic and demographic conditions is necessary
for business and government decisions. Information compiled by the Bureau of Economic Analysis
(BEA) and the Census Bureau is closely watched by business leaders, policymakers, and the American public. BEA calculates the Gross Domestic Product and related essential economic measures.
The 2007 Budget includes funding for BEA to continue to produce timely and accurate economic data.
The Census Bureau conducts economic and demographic surveys and censuses. The Budget provides
increases for the Census Bureau to continue its reengineering efforts for the 2010 Census. This includes planning and testing to contain costs and to improve the efficiency of data collection activities.
The Budget also provides the necessary resources for the 2007 Economic Census, which will allow
the Bureau to produce comprehensive statistics on the U.S. economy.
To make economic development efforts more effective, consolidate duplicative programs, and improve efficiency, the Budget proposes the Strengthening America’s Communities Initiative. As part
of this broad reform effort, the Economic Development Administration (EDA) will shift its focus to
promoting regional economic development solutions in distressed communities that further innovation and global competitiveness. The Initiative is discussed in more detail later in this chapter.

Advance the Ability to Observe, Protect and Manage the Earth’s Resources
The 2007 Budget supports key programs in the National Oceanic and Atmospheric Administration
(NOAA) that observe and predict changes in the earth’s environment and manage our ocean and
coastal resources.
NOAA provides high quality, timely weather forecast information to protect lives and property.
During the 2005 hurricane season, the busiest on record, NOAA provided important forecasting
information about the path and intensity of hurricanes. The President’s Budget provides increases
for weather forecasting activities to ensure continuing improvements in this important area.
The Budget also provides planned increases of over $110 million for continued development and
acquisition of weather satellites.
In response to the devastating tsunami that hit Southeast Asia in December 2004, NOAA developed an improved Tsunami Warning and Mitigation System to strengthen tsunami detection and
warning for at-risk U.S. communities. NOAA is also working with other Federal agencies to provide
technical assistance to improve tsunami warning capability for other nations and ensure interoperability between the United States’ system and other tsunami warning systems. The 2007 Budget
supports increases for deployment of additional advanced technology deep-ocean buoy stations and
tsunami inundation mapping, modeling, and forecast efforts.
The Budget enhances activities within the climate program that are aligned with the strategic programs of the President’s Climate Change Research Initiative. These include expanded monitoring of
carbon sources and sinks and more integrated information about water supply for improved drought
management and planning. The Budget also supports continued implementation of the global ocean
observing system to improve climate monitoring and forecasts.

THE BUDGET FOR FISCAL YEAR 2007

57

Hurricane Prediction and Response
Many of NOAA’s capabilities were directly
involved in the recent unprecedented series
of storms in the Gulf of Mexico. NOAA
provided high quality hurricane forecasts
and warnings to local emergency managers.
Long-term research efforts,
expanded
observations, modeling improvements, and
computational resources have led to NOAA’s
current weather predictive capabilities. The
Administration requested and received
supplemental funding in 2006 to further
enhance the quality of hurricane forecasts.
NOAA also assesses damage from storms
and evaluates waterways to assist dredging
Satellite image of Hurricane Katrina prior to landfall.
operations, allowing ports and waterways
affected by storms to re-open faster. Furthermore, NOAA assesses the impact of storms on area fisheries,
supports hazardous materials containment and abatement efforts, and provides data necessary for
post–storm recovery operations.

New investments and program improvements within NOAA are also aimed at strengthening our
knowledge and management of ocean resources in support of the President’s U.S. Ocean Action Plan.
For example, proposed reforms to the Coastal Zone Management Program will provide additional
grant funding on a competitive basis that supports State, regional, and national priorities. The
Budget also provides funds to improve management of the Nation’s fisheries. Market-based
approaches—such as Dedicated Access Privilege systems (DAPs) that provide exclusive privileges
to harvest a quantity of fish—move fisheries management away from cumbersome and inefficient
regulatory practices and have been shown to lead to lengthened fishing seasons, improved product
quality, and safer fishing conditions. The Administration has set a goal of doubling the number of
DAPs in use by the year 2010.
The Budget also proposes increases for fisheries research and management programs in the Gulf of
Mexico. The fishing industry and the natural resources it depends on were significantly damaged by
Hurricanes Katrina and Rita. The proposed increases will help provide a solid base to start restoring
and rebuilding these assets and promote sustainable fisheries in the region.

58

DEPARTMENT OF COMMERCE

FOCUSING ON THE NATION’S PRIORITIES—Continued

Cooperative Conservation: Open Rivers Initiative

The Henniker dam in New Hampshire before removal.

The Henniker dam during removal.

To help repair vital riverine ecosystems, benefit communities, and enhance populations of key species, the
Budget supports an Open Rivers Initiative to remove small, obsolete dams like the one shown here in New
Hampshire. This initiative would provide $6 million for a competitive grant program in NOAA focused on
community-driven small dam and river barrier removals in coastal States. These efforts are expected to
provide an economic boost for communities, enhance public safety, and improve populations of key species
such as striped bass and salmon. The Budget also provides $5 million for the U.S. Fish and Wildlife Service
and $10 million for the Natural Resources Conservation Service to complement these goals.

THE BUDGET FOR FISCAL YEAR 2007

59

RESTRAINING SPENDING AND MANAGING FOR RESULTS
Economic Development Reform
The 2007 Budget seeks to reform and improve the Federal Government’s economic development
activities by consolidating duplicative programs and targeting funding to those communities most
in need. To carry out these principles, the 2007 Budget proposes to implement the Strengthening
America’s Communities Initiative (SACI) in the Departments of Commerce and Housing and
Urban Development (HUD). The initiative includes consolidation of several economic development
programs, which will allow communities to avoid having to navigate a confusing maze of Federal
programs to receive funding, and gives EDA a new focus on awarding grants to those projects that
have the potential for regional impacts. EDA will also have the ability to focus additional resources
on distressed communities, while also carrying out assistance to communities affected by the recent
Base Realignment and Closure Commission decisions. As discussed in the HUD chapter, SACI also
includes proposed reforms to the Community Development Block Grant program. The Department
of the Treasury will continue to operate the New Markets Tax Credit program, and will work with
Commerce and HUD to develop and apply a common set of performance measures and goals for all
Federal community and economic development programs.

Spending Discipline
The commitment to spending discipline requires shifting resources away from low-performing and
lower priority programs. The 2007 Budget proposes to terminate the Advanced Technology Program
(ATP), a program that provided grants to businesses to help develop new technologies for commercial
use. Given the growth of venture capital and other financing sources for high-tech projects, there is
little evidence of the need for this Federal program. This proposal is also consistent with recent
congressional action on ATP—providing $136 million in 2005 with no funding for new grants, and
$79 million in 2006, to cover existing grants and enable close-out. The Budget also reduces funding
for the Manufacturing Extension Partnership (MEP) program by $59 million from the enacted level
because the program has evolved to a stage where less Federal support is required, and MEP offers
services that are also provided by private entities.
The Administration supports competitively awarded, merit-based funding of science programs.
The 2007 Budget does not provide funding for continuation of over $120 million in unrequested,
unrelated construction project earmarks in NIST and over $400 million in unrequested funding in
NOAA that were appropriated in 2006.
The 2007 Budget proposes to terminate the Public Telecommunications Facilities, Planning and
Construction program, as this program is duplicative of other programs that provide grants for
telecommunications infrastructure.
The Emergency Steel Loan Guarantee Act of 1999 provided funding for Federal guarantees of up
to 95 percent on loans by private lenders to financially troubled steel firms. As there has been little
demand for the program, the 2007 Budget proposes rescinding $49 million from this program. This
is consistent with the termination of the Emergency Oil and Gas Guaranteed Loan Program in 2002.

60

DEPARTMENT OF COMMERCE

RESTRAINING SPENDING AND MANAGING FOR RESULTS—Continued
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, 2005.

Human Capital

Competitive
Sourcing

Financial
Performance

E-Government

Budget and
Performance
Integration

Status
Progress
The Commerce Department is working to implement a new multi-tiered personnel appraisal system that makes
meaningful distinctions in employee performance and is linked to achieving Commerce’s mission and goals. In
addition, the Department has implemented leadership development and certificate programs for employees at
all levels, which will improve leadership and technical competencies to ensure a high performing organization.
The Department has continued to improve its main financial system, the Commerce Business System, and
has developed an implementation plan to respond to the new financial requirements. In E-Government,
Commerce continues to work to create a seamless environment to assist exporters to research current and
potential markets, gather trade leads, and secure the majority of their Federal resource needs online through
www.export.gov. Commerce also continues its efforts to improve Department-wide information technology
security by improving the quality of its certification and accreditation packages for national and mission critical
systems. Over the past three years, over half of Commerce’s programs have received Effective or Moderately
Effective ratings in Program Assessment Rating Tool evaluations and Commerce has been working to improve
performance and efficiency.

Initiative

Status

Progress

Faith-Based and Community Initiative
A Faith-based and Community Initiative center was created in the Department in 2005. Commerce’s major
activities in support of the initiative include beginning a pilot program to promote philanthropic activities in
corporate America.

THE BUDGET FOR FISCAL YEAR 2007

61

Department of Commerce
(In millions of dollars)
Estimate

2005
Actual
Spending
Discretionary Budget Authority:
Departmental Management:
Salaries and Expenses ..................................................................................
Emergency Guaranteed Loan Program accounts................................
Headquarters Renovation .............................................................................
National Intellectual Property Law Enforcement Coordinating
Council .............................................................................................................
Office of the Inspector General ...................................................................
Subtotal, Departmental Management ...........................................................
Economic Development Administration ........................................................
Bureau of the Census .........................................................................................
Economics 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 .................................................................

2006

2007

48
—
—

47
—
—

57
49
18

2
22
72
286
745
79
403
67
30

—
22
69
280
801
79
398
75
30

1
23
50
327
878
80
409
79
30

2,850
1,037
19
3,906

2,784
1,069
3
3,850

2,668
1,024
11
3,681

1,508
1,508
—
7

1,683
1,683
—
6

1,843
1,843
—
1

382
244
73
699
39
6,333

397
176
174
747
40
6,375

472
46
68
586
18
6,139

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

38

54

—

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

6,132

6,402

6,426

Mandatory Outlays:
Digital Television Fund activities .....................................................................
All other ....................................................................................................................
Total, Mandatory outlays ........................................................................................

—
43
43

—
68
68

45
141
186

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

6,175

6,470

6,612

Memorandum: Budget authority from enacted supplementals

62

DEPARTMENT OF COMMERCE

Department of Commerce—Continued
(In millions of dollars)

2005
Actual
Credit activity
Direct Loan Disbursements:
Fisheries Finance Direct Loan Financing account ...................................
Total, Direct loan disbursements .........................................................................

132
132

Estimate
2006

2007

71
71

109
109

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