• Become an SSTI Member

    As the most comprehensive resource available for those involved in technology-based economic development, SSTI offers the services that are needed to help build tech-based economies.  Learn more about membership...

  • Subscribe to the SSTI Weekly Digest

    Each week, the SSTI Weekly Digest delivers the latest breaking news and expert analysis of critical issues affecting the tech-based economic development community. Subscribe today!

Federal R&D lost over $200 billion due to Budget Control Act, AAAS finds

January 28, 2021

In the wake of the Great Recession, Congress enacted the Budget Control Act (BCA) of 2011 to curb federal discretionary spending as the nation approached the statutory debt limit. Originally intended to reduce spending by nearly $2 trillion over the period from FY 2012 through FY 2021, the BCA spending caps were periodically raised by Congress. While these negotiations reduced the overall impact of the BCA, new analysis from the American Association for the Advancement of Science (AAAS) estimates that more than $200 billion in federal R&D spending were nonetheless “lost” to these spending cuts, impacting several key elements of innovation economies — higher education R&D, private R&D investment, and STEM workforce development.

To determine this lost R&D* potential, AAAS calculated the 30-year growth rate for R&D spending for the period prior to FY 2008, extrapolated pre-BCA spending trends through FY 2021, and compared that trend line to actual R&D spending over the period. The figure below shows the value of this lost R&D budget and the proportions that would have been spent on Research and Development & Facilities. Under these assumptions, AAAS calculates that approximately $96 billion in funding for basic and applied research and $240 billion for total R&D was lost over the period.

While AAAS does not attempt to calculate the figure for the losses to the whole of the innovation economy, the analysis points out the substantial contribution that federal R&D dollars have on several aspects of innovation. Specifically, the analysis references the impact that federal research has on increasing more novel and influential patent activity, the “crowding in” effect of stimulating additional and follow-on private R&D investment for tech startups, the careers and potential careers of doctoral students and postdoctorate researchers, as well as the leading role of federal funding in R&D performed by institutions of higher education.

* To calculate R&D spending, AAAS includes Defense Research Development Testing & Equipment and medical research; NIH; Department of Energy technology programs and the Office of Science; National Nuclear Security Administration RDT&E; NSF; NASA; USDA; the NOAA Office of Oceanic and Atmospheric Research; the U.S. Geological Survey; EPA science and technology; NIST; DHS Science and Technology; Veterans Affairs research; and the Institute of Education Sciences.

federal spending, r&d