From great recession to research regression: The looming crisis

President Donald Trump's administration proposed federal budget cuts of up to 50% for agencies that fund the majority of university research in the U.S. Experts worry the cuts could potentially trigger economic consequences comparable to those of the 2008 Great Recession, while accelerating America's decline in global scientific dominance.

Federal science spending has declined from nearly 2% of the gross domestic product in the early 1960s to just 0.6% today, despite intensified global competition. China's share of global research and development spending increased by 19.2% between 2001 and 2021, with projections indicating that Chinese research and development spending will surpass American investment by 2027.

"The impacts of these cuts would be unlike anything seen in U.S. history," said Chris Harrington, University of California Associate Vice President for Federal Governmental Relations. "Slashing funding for university research will make it harder for the U.S. to stay ahead as other nations accelerate their progress in areas that are critical for economic and national security, like quantum computing, energy, and biotechnology."

Federal investments in scientific research have generated substantial returns for the American economy. Economists at the Federal Reserve Bank of Dallas estimate government investments in scientific research produce returns of up to 210%, with approximately one-quarter of U.S. productivity growth attributable to federal investments in science and technology. Recent federal spending on science has supported nearly 500,000 American jobs directly and an additional 1.6 million positions indirectly.

The federal government provides 40% of total U.S. spending on basic research, with academic laboratories conducting 45% of basic research and 16% of applied research in 2021. This funding has proved critical for medical breakthroughs, with 99% of new drugs approved by the Food and Drug Administration between 2010 and 2019 relying on federal funding.

American scientific leadership has already shown signs of decline. The U.S. fell to second place in annual global patent applications in 2021, while China surpassed American scientists in peer-reviewed article publications in 2017. China surpassed the U.S. in the number of cancer research articles published in premier academic journals last year.

The shift in technological leadership has been particularly dramatic. In 2003, the U.S. led in 60 of 64 critical technology areas while China led in three. By 2023, China led in 57 of 64 technologies, with the U.S. leading in seven.

Budget constraints have already affected research operations. Since January, the federal government has canceled or delayed thousands of research grants to hundreds of universities. 

The National Science Foundation awarded approximately $1 billion less in grants for new research compared to its 10-year average and terminated more than 1,700 active grants worth about $1.4 billion. The National Institutes of Health canceled 1,389 grants and delayed funding for more than 1,000 additional projects, resulting in a 20% reduction in health research funding as of May 1.

These cuts have halted research projects at University of California campuses studying aging, addiction, obesity, maternal and fetal health, and Alzheimer's disease. American scientists are increasingly accepting positions overseas, where European and Asian universities have pledged stability and support, potentially transferring future research benefits to other nations.

Economic analysis suggests the consequences could be severe. A 25% cut to federal research funding would impact the U.S. economy with the same force as the 2008 Great Recession, according to economists at American University. Under a 50% cut scenario, the average American family could experience a $10,000 reduction in income.

As the U.S. share of highly cited scientists declined by 1.1 points last year, while China's increased by 2.5 points, the proposed cuts threaten to accelerate America's retreat from scientific leadership at a time when technological advancements determine economic competitiveness and national security capabilities.

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