House budgets limit TBED funding, restructure NIH

Editor's Note: This article was updated on July 1 to reflect an amendment during the full House's consideration of the FY 2025 defense appropriations bill that restored the APEX accelerators program to its FY 2024 funding level.

The U.S. House Committee on Appropriations' decision to cut non-defense spending by six percent in its initial FY 2025 spending bills is yielding predictably mixed results for programs relevant to tech-based economic development (TBED). Amidst the overall cuts, flat funding for the Economic Development Administration’s Build to Scale ($50 million) and Tech Hubs ($41 million) might be viewed as positive news. Programs bearing the brunt of budget cuts include the rest of EDA (30% reduction), the Minority Business Development Agency (20% reduction), and the Small Business Administration’s accelerators competition ($0). Meanwhile, the committee is proposing to maintain level funding for the National Institutes of Health but condensing from 27 centers into 15.

The committee proposed cutting the Department of Defense's APEX accelerators by 60% for FY 2025, but the program's funding was restored via amendment before the final bill passed the House.

In a rare bright spot within the non-defense funding bills, the House is proposing slight increases for the science-intensive National Science Foundation ($9.3 billion) and NASA ($25.2 billion).

The House is proposing to use these cuts in non-defense appropriations to boost funding at the Department of Defense. The Defense Innovation Unit (DIU) would see a boost of nearly one-third over FY 2024 to $1.3 billion, and the department’s total research, development, test, and evaluation budget would increase to nearly $146 billion.

Among programs supporting the nation’s manufacturers, the House slates level funding for the National Institute of Standards and Technology’s Manufacturing Extension Partnership ($175 million) and Manufacturing USA institutes ($37 million). The defense proposal does not appear to restore funding for the Defense Manufacturing Communities Partnerships, which received no funding in FY 2024.

Other innovation-related small business programs received modest cuts. The Small Business Administration’s Clusters ($8 million) and FAST ($6 million) would see cuts of $1 million and $3 million, respectively, from FY 2024.  

Of course, the House appropriations committee is only one part of the appropriations process, and the full chamber, Senate, and White House will all be engaged before FY 2025 numbers are finalized. The Senate has not yet announced a formal schedule for its process.

 If Congress adopts an approach similar to other recent election years, meaningful budget negotiations will be delayed until after the election and could run as late as next spring.