While President Bush’s proposed budget for FY08 would increase the total federal R&D investment by 1.4% to $143.0 billion, federal support of basic and applied research would decline to $55.4 billion, a 2% drop from the FY07 budget. Not including NASA, the total budget increase for nondefense R&D agencies is only 0.8%, below the national expected inflation rate of 2.4%. The three agencies with the largest proportional budget increases are the focus of President Bush’s American Competitiveness Initiative, which was announced last year (see IBO 2/28/06). The budget of the Department of Energy’s Office of Science would increase 15.8% to $4.1 billion, and the National Institute of Standards and Technology would have a proposed budget of $515 million, a 10.8% increase from FY07. The National Science Foundation would have the third highest proportional increase with an 8.3% boost, bringing the agency’s expected FY08 budget to $4.9 billion. Almost every other nondefense R&D program would have its budget cut. Although the National Institutes of Health (NIH) received an additional $600 million in FY 2007 funding this month, this increase will mean that the NIH’s budget would decline by $325 million in FY 2008, a 1.1% percent loss. The Environmental Protection Agency’s budget would be cut 3.5% to $547 million.