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17. Department of Commerce


Highlights of 2002 Funding

  •  Provides continued funding for core Department of Commerce activities.
  •  Provides $83 million of new funding to continue procurement of an advanced weather satellite system being developed jointly with the Department of Defense.
  •  Increases funding for the collection and calculation of basic economic statistics by 18 percent, or $9 million, to improve key measures used by government and business policy makers.
  •  Reduces funding for several Commerce programs, particularly those that provide subsidies to private corporations and other assistance that is of reduced priority.
  •  Suspends new funding for the Advanced Technology Program, pending a reevaluation of the program.
  •  Rescinds $125 million of funding from the Emergency Steel and Oil and Gas Loan Guarantee programs after the second round of applications is funded.
  •  Reallocates funding within the National Oceanic and Atmospheric Administration to ensure that highest priority activities are fully funded.


The President's Budget provides funding to produce economic and demographic statistical measures; manage rapidly growing patent and trademark applications; develop precise technical measures and standards; protect coastal and fisheries resources and strengthen weather and climate forecasting abilities; and support trade and export compliance activities. At the same time, selective reductions in several programs are proposed to trim lower priority subsidies and support.


Launching a New Weather Satellite: Within the more than $3 billion budgeted for the Department's National Oceanic and Atmospheric Administration (NOAA), increased funding of $83 million is provided to continue procurement of the next generation of weather satellites. The National Polar-orbiting Operational Environmental Satellite System, which is being jointly developed with the Department of Defense, will provide advanced measurements to benefit both near-term weather and longer-range climatic analyses.

17–1. Department of Commerce, 3.3% Average Annual Growth, 1998–2002

Improving Governmental Statistics: The budget also provides an 18 percent, or $9 million, increase for the Bureau of Economic Analysis which is responsible for measuring key economic indicators, including Gross Domestic Product and related trade and investment flows. With the rapid growth of electronic commerce and expanding use of stock options and other changes associated with the new economy and service sectors, investment in Commerce's statistical areas is essential to providing sound data for policy makers.

Strengthening Export Licensing and Patent Licensing: The export licensing activities of the Bureau of Export Administration will be strengthened through targeted investments. The program level of the Patent and Trademark Office will increase by almost 10 percent, to help address its growing workload.

Redirected Resources

Reducing Corporate Subsidies: The budget proposes reductions in several Commerce programs. Generally, these programs provide corporate subsidies or other lower priority grants. The budget proposes to end the Emergency Steel and Oil and Gas Loan Guarantee programs after the second round of applications. Adequate funds would remain to address pending applicants for both programs. The oil and gas program was created when oil and gas prices were far below current levels, and demand for this program has been particularly limited. The budget also suspends funding for the Advanced Technology Program (ATP), which supports research and development activities of private firms, pending a reevaluation of this program. New ATP awards would not be made in 2001 or 2002, though support for ongoing projects would be continued using reprogrammed ATP funds from 2001.

Other Program Reductions: The budget proposes to limit funding for Economic Development Administration grants to the $335 million level authorized by law. Several reallocations are also made within NOAA, to ensure that funds are targeted to the highest priority environmental needs. Funding is eliminated for the Coastal Impact Assistance Fund, which overlaps with the more general Coastal Zone Management Act grant program, as well as a number of unrequested projects.

Potential Reforms

While the Department recently received a clean opinion on its 1999 consolidated financial statements, auditors have reported a material weakness in the Department's financial systems due to a lack of Department-wide integrated financial systems, which is being addressed. In addition, the Department is engaged in a careful review of its staffing, with the goal of "de-layering" unnecessary management levels and reducing lower priority management positions. Commerce will continue its improvements in information technology procurement which currently is over $1 billion annually. The Department also expects to make continued improvements in fisheries management, where there are significant resource management challenges as evidenced by steep declines in select fish stocks.

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