Cutting Funding for Science Can Have Consequences for the Economy, U.S. Technological Competitiveness

For example, a biotech advocacy firm calculated that every dollar of funding to the National Institutes of Health generates US$2.46 in economic activity, which is why a recent cut of $9 billion to its funding is so disturbing.

The American public also values science. In an era of declining trust in public institutions, more than 3 in 4 Americans say research investment is creating employment opportunities, and a similar percentage are confident that scientists act in the public’s best interests.

Science Superpower Slipping
By some metrics, American science is preeminent. Researchers working in America have won over 40% of the science Nobel Prizes – three times more than people from any other country. American research universities are magnets for scientific talent, and the United States spends more on research and development than any other country.

But there is intense competition to be a science superpower, and several metrics suggest the United States is slipping. Research and development spending as a percentage of GDP has fallen from a high of 1.9% in 1964 to 0.7% in 2021. Worldwide, the United States ranked 12th for this metric in 2021, behind South Korea and European countries.

In number of scientific researchers as a portion of the labor force, the United States ranks 10th.

Metrics for research quality tell a similar story. In 2020, China overtook the United States in having the largest share of the top 1% most-cited papers.

China also leads the world in the number of patents, and it has been outspending the U.S. on research in the past few decades. Switzerland and Sweden eclipse the United States in terms of science and technology innovation. This definition of innovation goes beyond research in labs and the number of scientific papers published to include improvements to outcomes in the form of new goods or new services.

Among American educators and workers in technical fields, 3 in 4 think the United States has already lost the competition for global leadership.

Threats to Science Funding
Against this backdrop, threats made in the beginning of President Donald Trump’s second term to science funding are ominous.

Trump’s first wave of executive orders caused chaos at science agencies as they struggled to interpret the directives. Much of the anxiety involved excising language and programs relating to diversity, equity and inclusion, or DEI.

The National Science Foundation is particularly in the crosshairs. In late January 2025, it froze the routine review and approval of grants and new expenditures, impeding future research, and has been vetting grants to make sure they comply with orders from the U.S. president.

The National Institutes of Health announced on Feb. 7, 2024 a decision to limit overhead rates to 15% which sent many researchers reeling though it has since been temporarily blocked by a judge. The National Institutes of Health is the world’s largest funder of biomedical research, and these indirect costs provide support for the operation and maintenance of lab facilities. They are essential for doing research.

The new administration has proposed deeper cuts. The National Science Foundation has been told to prepare for the loss of half of its staff and two-thirds of its funding. Other federal science agencies are facing similar threats of layoffs and funding cuts.

The Impact
Congress already failed to deliver on its 2022 commitment to increase research funding, and federal funding for science agencies is at a 25-year low.

As the president’s proposals reach Congress for approval or negotiation, they will test the traditionally bipartisan support science has held. If Congress cuts budgets further, I believe the impact on job creation, the training of young scientists and the health of the economy will be substantial.

Deep cuts to agencies that account for a small fraction – just over 1% – of federal spending will not put a dent in the soaring budget deficit, but they could irreparably harm one of the nation’s most valuable enterprises.

Chris Impey is University Distinguished Professor of Astronomy, University of Arizona. This article is published courtesy of The Conversation.