White House Aims To Slash Technology Grant Program

In its proposed budget for fiscal year 2003, the White House recommended reducing funding for the Advanced Technology Program by 42 percent, from $185 million in 2002 to $108 million in 2003.

New grants would be reduced to $35 million, the report said. The program has averaged $150 million in grants yearly since 1990.

The program was created in 1988 to prevent the United States from falling behind other countries in high-tech research and development. But over the past 14 years, that role has largely been taken over by private venture capital, the report noted.

Venture-capital investments have risen from $6 billion in 1995 to $104 billion in 2001, according to one estimate, the report said.

"The overall growth in venture capital suggests sufficient private funding is available for high-technology projects," the White House said.

Although the program focuses on small firms, it has in many cases given money to large corporations with ready access to capital, the report said, creating corporate subsidies and duplicating private-sector efforts.

For example, one $4.8 million grant helped a group of automakers improve their manufacturing processes and save hundreds of million dollars annually, according to the project's Web site.

The White House said it would seek to reform the program to ensure that it would give more awards to universities and fewer to large corporations, as well as require firms to reimburse the government up to five times its original investment if its grant led to success.

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