One year after the CHIPS Act, Congress is starving science

Public investments in research and development (R&D) during the 20th century have powered many of America’s greatest advancements. However, federal funding for R&D has been declining over the past 50 years. Now, as Congress negotiates spending bills for the new fiscal year, investments in R&D are being further starved in an effort to reduce budget deficits. Although now is a time when the federal government should be unwinding the nation’s debts, cutting R&D funding is a shortsighted decision that will barely change the fiscal trajectory while hobbling America’s ability to innovate.

When Congress passed the bipartisan CHIPS and Science Act one year ago, it was supposed to herald a $200 billion increase in public R&D that reversed the long-term funding decline and prevented China from gaining a technological edge. But lawmakers failed to appropriate the funds needed to meet this target in Fiscal Year 2023 — and the outlook for 2024 is even worse.

Congress will return to Washington in September embroiled in a partisan standoff over spending. Extremists in the far-right Freedom Caucus are demanding massive spending cuts beyond those agreed upon in the debt ceiling negotiations earlier this summer. Included in the House GOP’s proposed appropriations bills are deep cuts to R&D investments in energy, agriculture, the environment, space exploration, and health and medicine. Only the defense sector will see an expansion of R&D funding.

If passed, the American Association for the Advancement of Science (AAAS) estimates that the proposed House appropriations bills will reduce non-defense R&D spending by $17 billion below last fiscal year’s level. But this cut is even more severe in real terms thanks to inflation and other factors: as a share of total economic output, it’s a one-fifth reduction.

Unfortunately, the problem is not limited to the House. Even the Senate — which managed to pass all 12 of its appropriation bills out of committee on a bipartisan basis before the August recess, at a total spending level slightly higher than prescribed by the debt ceiling deal — would cut non-defense R&D spending by $10 billion below last year’s levels, bringing it to the lowest level in modern history as a percent of gross domestic product.

As U.S. R&D funding continues to slide, our toughest competitors are outpacing us. South Korea, Japan and Germany are currently investing a higher share of their GDP into R&D compared to the United States, and the average annual rate of increase for China’s R&D is almost double that of the U.S.

Republicans are not wrong to argue that spending cuts are needed to get our skyrocketing budget deficits under control. On our current trajectory, annual interest on the national debt will surpass defense spending by 2030 and overtake Social Security as the single-largest category of federal spending before 2050. But discretionary spending — the part of the budget appropriated annually by Congress — comprised about 27 percent of total federal expenses last year, and R&D spending only makes up about 12 percent of that discretionary spending.

Cuts to such a small portion of the budget yield negligible savings but have the potential for profound economic impacts. In recent years, public investments in R&D have contributed to the creation of a viable mRNA vaccine that ended the deadly COVID-19 pandemic and enabled future advancements in other emerging industries such as artificial intelligence, clean energy, and nanotechnology. Federal R&D investments have proven to be lucrative as well; the Human Genome Project is estimated to have generated $141 in economic activity for every dollar invested into it. Future breakthroughs such as these are at risk if public R&D is not adequately funded.

For the United States to continue to be a global leader in science, it must recognize that it is fiscally and scientifically irresponsible to cut R&D investments as a strategy to close the deficit. Instead, Congress should fulfill the promise of the CHIPS and Science Act by meeting requests for funding R&D across government agencies and satisfy calls for fiscal restraint by tackling the real drivers of our budget deficit: insufficient tax revenue and ballooning entitlement programs. Reversing the long-term decline of R&D funding will ensure that the U.S. continues to lead the invention and innovation of new scientific technologies. As Congress negotiates spending bills for the coming fiscal year, they should not cast aside R&D investments; they should embrace them.

Ben Ritz is the director of the Progressive Policy Institute’s Center for Funding America’s Future. Stephen Verral is a fellow with the Progressive Policy Institute.