The Washington Post reports the funding cuts led the space agency to delay necessary improvements and reduce the number of safety staffers. However, there's no direct link to the Feb. 1 shuttle disaster.
"The infrastructure was crumbling, upgrades were delayed and personnel cuts had been pretty severe," George Washington University's John M. Logsdon told The Post.
The board will not issue its final report until the end of August, a full month later than planned, in order to allow enough time for editing the massive document.
The board's chairman, retired Navy Adm. Harold Gehman Jr., had intended to release the report by the end of July to beat the August congressional recess. He wanted lawmakers to look over the 100-plus-page report while on vacation, to give them a jump-start when they returned to work in September and a slew of hearings on NASA.
But Gehman repeatedly stressed over the weeks: "We'd rather get it right than get it in a hurry."
The board has attributed the cause of the accident to the 1½-pound chunk of foam insulation that broke off Columbia's fuel tank during liftoff and slammed into the leading edge of the left wing. The resulting hole allowed deadly hot gases to penetrate the shuttle during atmospheric re-entry.
Earlier this week in San Antonio, accident investigators replicated the foam strike in a test that proved just how dangerous the lightweight insulation can be. A block of foam punched a 16-inch (41-centimeter) hole in a wing replica made of real shuttle parts.
But at least half the report will deal with NASA management and cultural issues, according to Gehman. According to The Post, there are indications the report will focus on the way safety has been affected by budget cuts under the first President Bush, President Clinton and the current administration.
"Clearly, one decision the board will reach is that too many decisions were prompted by budgetary concerns," a House aide with knowledge of the panel's activities told the newspaper.
The shuttle program was cut by more than $1 billion a year between 1993 and 2000, giving up $330 million to the space station and $600 million in cuts to reduce the federal deficit.
Another $300 million was saved by squeezing upgrades and innovations. NASA cancelled projects to replace the backup power units and develop a new booster rocket. It used more outside contractors, and halved its in-house maintenance staff.
Testifying to the board in March, Johnson Space Center director Jefferson Davis Howell Jr. said that only 3,000 of the 10,000 people at the space center were civil servants, while the rest worked for aerospace contractors who perform many of the key tasks in the shuttle program.
"When you start adding up the overall NASA budget picture and the shuttle budget picture over the past decade, it's rather clear the shuttle had disproportionately taken budget cuts to fund the space station, to fund Russian participation in the station," Logsdon told The Post. "The shuttle program has served as sort of a cash cow."
The budget pressures have been widely acknowledged. In March, the space agency's administrator, Sean O'Keefe, told a Senate panel, "We lost some individuals with skills we couldn't afford to lose" during the past decade, "and now these skills need to be replaced. Through downsizing and the normal attrition process, we lost key areas of our institutional knowledge base."
The story the investigation board tells might be incomplete, because it has opted not to subpoena internal documents from past administrations, the White House or its Office of Management and Budget, reports The Post. Instead, the panel used summaries of internal budget talks.
The Post says a panel lawyer advised members that obtaining the actual documents, which might be protected by executive privilege, would be too time consuming.
Despite the safety problems uncovered by the Columbia space shuttle investigation, several current and former astronauts said last month they are comfortable with NASA's approach to safety, even as they acknowledge there's no way to make space travel risk-free.
"Every time that I strapped on the shuttle, I felt confident everybody had done what I thought was everything possible to make sure we were ready to go," said astronaut Scott Altman.