As U.S. Nears a “Fiscal Cliff,” Concerns Rise for Future R&D

Fiscal and political pressure on U.S. research and development spending is likely to grow more intense in coming years, with some scenarios suggesting that sweeping cuts may occur as early as 2013. Unless lawmakers find compromise budget agreements, the cuts could dramatically impair innovation and the long-term strength of the nation’s economy, experts said at the AAAS Forum on Science and Technology Policy.

The pressures are coming from multiple sources, including the 2013 budget negotiations and the need to cover the escalating costs of entitlement programs such as Social Security and Medicare in the decades ahead. But the most immediate threat is that discretionary portions of the U.S. budget early next year will be subject to “sequestration”—across-the-board spending cuts of 8 to 10%—unless bitterly divided lawmakers agree on some mix of spending cuts and new revenue to close a gap of up to $1.2 trillion over the next 10 years.

Time to invest. Strong R&D investment is especially important in times of economic stress, said White House science and technology adviser John P. Holdren.

In talks that were often blunt and unusually pessimistic, policy leaders at the Forum described how the fiscal pressures threaten to undermine U.S. research preeminence and global leadership in areas ranging from food production and public health to energy development, space exploration, and science education.

“It just seems like an incredibly tense moment, where the whole world is watching what we choose to do,” said Maya

MacGuineas, a high-level budget adviser who served on the bipartisan Debt Reduction Task Force in 2010. Failure to find a compromise, MacGuineas added, will result in “nothing but a self-inflicted wound.”

The 37th annual AAAS Forum convened in Washington, D.C., on 26 to 27 April, with more than 400 government and business

leaders, researchers, educators, and journalists attending. But in a diverse program that explored prospects for startup tech firms, voter psychology, and science diplomacy, the intertwined budget and political crises were front and center.

John P. Holdren, the White House science and technology adviser, outlined President Barack Obama’s plans for research to drive innovation and economic productivity. Especially in a time of fiscal stress, Holdren said, it is crucial to invest in areas such as advanced manufacturing, “big data” computing, and science education.

U.S. Representative Lamar Smith, the Texas Republican who coauthored a landmark patent system reform signed by Obama last year, assured the audience of bipartisan support for R&D in Congress. But, he said, recent levels of federal borrowing are not sustainable, and science advocates must “be prepared to negotiate and compromise.”

R&D is already suffering from years of budget stress, aggravated by the historic 2008 recession. Matt Hourihan, director of the AAAS R&D Budget and Policy Program, told the Forum audience that federal research investment, adjusted for inflation, has been essentially flat since 2003. Seen through a longer lens, public-sector R&D has fallen from 1.27% of gross domestic product in 1976 to 0.87% now.

At the National Institutes of Health (NIH), 40% or more of applicants won grants in the 1980s; today, just under 20% succeed. At the state level, declining government support for higher education has led to higher tuition and deep spending cuts. Texas has closed over 500 programs—some in the basic sciences—in a push for efficiency and productivity. The University of Oklahoma (OU) also is evaluating whether programs and facilities are relevant and able to support themselves.

“We can’t just wait this out and come out the other end and it is like it was before,” said Kelvin K. Droegemeier, OU’s vice president for research. “It is not going to be like it was before.”

In fact, things may get worse. Under terms of a 2011 agreement to raise the federal debt ceiling, lawmakers must narrow the gap by up to $1.2 trillion; failing that, sequestration will impose automatic cuts of 8 to 10%, split between defense and non-defense discretionary spending.

For the NIH research community, “that’s a really big cut” with “scary” ramifications, said Carrie Wolinetz, associate vice president for federal relations with the Association of American Universities.

But the budget approved by the Republican-controlled House of Representatives earlier this year would shift the onus of sequestration cuts mostly onto nonmilitary programs, creating an even worse worst-case scenario for science. Health and agriculture research could be cut by 22% compared with the proposed White House plan through 2021, Hourihan said. Transportation and natural resources could be cut by about a third. Energy R&D could be slashed 67%.

The Senate is not likely to approve such a draconian spending plan, he said, but it sets a troubling baseline for negotiations in the months ahead.