ARPA-E funding future still cloudy

DARPA’s energy innovation cousin finally received funding last year and by all accounts has been a success. The current economy and the White House’s recent stance on holding the line on domestic spending could cut the legs out from under ARPA-E before it can ever start to hit its stride.

From the link:

A year after it first received funding, the Advanced Research Projects Agency for Energy (ARPA-E) got high marks from the congressional committee that spearheaded its creation in its “first annual checkup.” In a hearing of the House committee on Science and Technology, the new agency, which is designed to promote the research, development and commercialization off “game-changing” energy technologies, received praise for quickly sorting through 3,700 applications to make 37 awards in its first round of funding. It also fine-tuned its awards process, with the second round of funding going into specific areas of research identified in a series of workshops. Some of the projects that ARPA-E funded have since attracted private support.

The agency’s fate, however, remains unclear. It’s funding so far has come from last year’s stimulus package, not the regular budget, and Congress denied its request for funds for the current fiscal year. The President’s 2011 budget includes nearly $300 million for the agency, but at a time when Congress is facing pressure to cut spending, that money might not make to the final budget.

Obama’s domestic spending freeze announcement …

… is getting a ton of play around the blogosphere today. There’s plenty of cries of capitulation from the right, there’s opining the move is a knee-jerk reaction to Brown winning in Massachusetts, and the Obama-leery left is fairly predictably apoplectic.

You can find a pretty good roundup of opinion on the announcement here at the Daily Dish.

Of all the various takes out there, this from Bruce Bartlett seems to strike closest to my thoughts:

More recently, economist Paul Krugman warned that the Fed’s talk of an early “exit strategy” from easy money sounds suspiciously like that which led it to tighten prematurely in 1936. He believes that the good economic news of recent months does not yet constitute proof that a sustainable recovery is underway and that the danger of a relapse this year is strong as stimulus spending wanes.

Nevertheless, the pressure to at least begin the process of normalization is overwhelming. The Fed has talked openly about new procedures to soak up the bank reserves it has created even as those reserves remain largely idle and unlent. And even Democrats and organizations affiliated with them are urging Obama to get the budget on a sustainable path as soon as possible. John Podesta and Michael Ettlinger of the liberal Center for American Progress recently argued that the primary budget (spending less interest on the debt) should be balanced as soon as 2014, with full balance by 2020.

I’m not terribly worried that Congress will reduce the deficit too quickly; too much of the budget is on automatic pilot or effectively off-limits. Entitlement programs like Medicare will continue to grow for years to come and there is no way that defense spending can be reined in as long as we continue to fight two wars in Iraq and Afghanistan, not to mention the likelihood of new domestic security spending in the wake of an aborted terrorist attack on Christmas day. And it’s far more likely that Congress will appropriate new stimulus measures than cut back on those already enacted.