When the U.S. President and the Speaker of the House worked out a deal last month to suspend the country’s $31.4 trillion debt limit through January 2025, they averted a seismic default that many agreed would have caused
catastrophic volatility in global financial markets.
That’s the good news.
The bad news — at least for many readers of this magazine — is that both leaders capped all discretionary spending to 1% growth in 2025 to spare themselves from having to cut popular social programs. Discretionary spending — money approved by Congress during the budget appropriations process — funds national defense initiatives and the operation of federal agencies and programs.
The debt limit deal resulted in the passage of the Fiscal Responsibility Act (FRA) last month, which, despite the cap on discretionary funds overall, favored defense spending with a
$28 billion boost. That means nondefense spending, which funds a large portion of the government’s subsidies for basic and
applied research, will sustain $40 billion in cuts.
We’ve been here before, and recently.
It was just over two years ago that spending caps established by the Budget Control Act (BCA) of 2011 expired. It too was a product of an intense debt limit debate, and established caps that the Congressional Budget Office estimated, at the time, would reduce discretionary spending by nearly $2 trillion over the following decade. Congressional deal-making during this period significantly reduced the cuts. But an analysis by the American Association for the Advancement of Science (AAAS) reported that the BCA might still have cost federally funded research programs more than $200 billion. When the BCA expired in fiscal year 2021, AAAS optimistically noted that only a slight acceleration of funding levels could make up the lost ground by 2026.
Now, far from accelerating, or even tapping the brakes, the newly passed FRA effectively amounts to a reversal in research funding over the next two years by capping growth below the rate of inflation.
This presents some difficult choices for advocates of U.S.
competitiveness in science and technology. The semiconductor provisions funded under the Chips and Science Act are largely safe. But the $158 billion act authorized for the National Science Foundation, Department of Energy, the National Institute of Standards and Technology, and other agencies is now in the crosshairs.
In effect, Congress will now need to rob Peter to pay Paul in order to increase funding for research programs supported by these agencies.
Limiting debt and spending is a conveniently pithy political position. But saving money is no more of a path to technical
sovereignty or economic competitiveness than profligate
spending is. Funding science is an investment with an undeniable correlation with long-term economic productivity and growth. A 2021 post on the International Monetary Fund’s blog, titled “Why Basic Science Matters for Economic Growth,”
cites analyses showing that a 10% permanent increase in the knowledge accumulated from a country’s own basic research
can increase its productivity by 0.3%. Cultivating a similar increase in foreign research through collaborations can further increase productivity by 0.6%.
What politician would want to decline credit for that?
