In 2005, leaders from both parties in Congress asked the National Academies to "identify the most urgent challenges the U.S. faces in maintaining leadership in key areas of science and technology," as well as specific steps policymakers could take to help the U.S. compete, prosper, and stay secure in the 21st Century.
In its report for Congress, Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future, the National Academies called for decisive action, warning policymakers that U.S. advantages in science and technology--which made the country a world leader for decades--had already begun to erode.
The report recommended that Congress establish an Advanced Research Projects Agency within the U.S. Department of Energy (DOE) modeled after the successful Defense Advanced Research Projects Agency (DARPA)--the agency credited with such innovations as GPS, the stealth fighter, and computer networking.
In 2007, Congress passed and President George W. Bush signed into law The America COMPETES Act, which officially authorized ARPA-E's creation. In 2009, ARPA-E received its first appropriations of $400 million, which funded ARPA-E's first projects.
For more information on ARPA-E’s budget, please visit ARPA-E Budget.