This annual report provides an analysis of federal research and development (R&D) funding by functional classification based on data in the President's budget. It includes only federal funding of R&D programs and excludes R&D facilities and all non-R&D activities. This report is designed to facilitate examination of the relative importance of R&D in the overall federal budget, as well as the role of each function within the total federal R&D effort. Functional classifications considered include: (1) "National Defense"; (2) "Health"; (3) "Space Research and Technology"; (4) "General Science"; (5) "Energy"; (6) "Transportation"; (7) "Natural Resources and Environment"; (8) "Agriculture"; (9) "Education, Training, Employment, and Social Services"; (10) "International Affairs"; and (11) "All Other Functions." An appendix considers historical trends. Additional analyses include total R&D statistics and basic research. (CW)