Illustration: Eniola Odetunde/Axios
The House-passed debt ceiling agreement likely would cut tech R&D funding just as Congress piles on work for agencies to keep the U.S. competitive.
What's happening: The deal reached to avoid the U.S. defaulting on its debt would cut non-defense discretionary spending for fiscal year 2024 and limit spending to 1% growth in 2025, which is essentially a budget cut because of inflation.
Why it matters: Although the deal does not explicitly say R&D will be on the chopping block, history shows Congress usually looks to cut that first. (Think the Budget Control Act and the Infrastructure Investment and Jobs Act.)
How it works: Congress for FY2024 appropriations already was low-balling the money authorized for the CHIPS and Science Act.
- Further R&D spending constraints in the debt ceiling deal would make it even less likely that the goals of the law will be realized. And that's as the agencies in charge of implementation — NSF, NIST and DOE — grapple with budgets they say are tight.
What they're saying: "You can't do both — say we want to be tough on China and then not put any money toward that. You can either recognize the country is falling behind China or you can not fund science," said Divyansh Kaushik, Federation of American Scientists associate director for emerging technologies and national security.
- Paul Lekas, head of global public policy for the Software & Information Industry Association, told Axios: "It certainly raises concerns about the future of federal R&D. ... Our concern is that non-defense discretionary spending in R&D is likely to be cut significantly going forward."
- "The big effect of this deal on science and tech is that we're going to have to do a lot more with a lot less, and so we have to be creative."
- Linda Moore, CEO of TechNet, told Axios: "We do believe that it's going to be challenging, but we are very pleased that there are members of the House and Senate in both parties that understand, like we do, how important investing on our future is."
State of play: Some lawmakers are gearing up to fight for R&D.
- Sen. Todd Young told Axios he's planning to discuss with members of the Appropriations Committee how such cuts would be an issue, especially as Congress increasingly is focusing on artificial intelligence.
- "I think when my colleagues understand the implications of starving the [Commerce, Justice and science] budgets of vital national security funding, then that will focus some minds. I don't know if it will focus enough minds to get the level of funding I desire."
- Rep. Michael McCaul said he will emphasize its importance to appropriators: "It’s a great power competition, and it’s not where we’re going to want to cut."
Zoom in: McCaul noted that the debt ceiling deal's reforms to the National Environmental Policy Act will help U.S. competitiveness by speeding up the development of semiconductor fabs by several years.
- House Select Committee on the Chinese Communist Party Chair Mike Gallagher pointed to a "fundamental environment" of budgetary constraints.
- "We’ve got defense hawks that want more for defense, we’ve got progressives that want more for discretionary funding. Everything is getting crowded out. ... It’s mandatory spending eating the world," Gallagher said.
Details: Stingy appropriations could hit a NSF STEM education program, the budget for NIST (which is in charge of setting standards with the EU on emerging tech like AI) and an effort to stand up the National AI Research Resource Task Force, tech policy experts said.
The intrigue: If Congress' goal is to save money, experts are stressing that emerging technology is exactly the type of productivity driver that would lead to an increase in the country's GDP, higher tax revenues and increased private sector investment.
- "There are ways we can use quantum computing to optimize spending, and it should be looked at as a way to solve budgetary constraints," said Allison Schwartz, D-Wave's global government relations and public affairs leader.
- Quantum has helped shorten waste collection routes by hundreds of miles, saving time, money and CO2 emissions, Schwartz noted.
The bottom line: "[We may] have to home in on what the government does well, which is convening a whole bunch of groups, creating more advisory committees, and looking at ways to help ensure that funding that's coming from outside sources is fair," Lekas said.
- "But it's going to pose challenges."
