sequestering american innovation
TRANSCRIPT
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 17
1 Center for American Progress | Sequestering American Innovation
Sequestering American Innovation
By Kwame Boadi December 9 2013
Te ederal spending cus brough on by sequesraion991252cus ha amoun o $984
billion in indiscriminae across-he-board ederal program cus over he nex nine
years991252are puting our naionrsquos long-erm economic compeiiveness a risk1 Te cus
include roughly $85 billion in cus o ederal suppor o research and developmen or
RampD2
Sequesraion is damaging numerous poins along he RampD pipeline includingK-12 science echnology engineering and mahemaics or SEM educaion univer-
siy SEM educaion and he suppor o basic research Te ederal governmen plays
a criical role in promoing innovaion hrough is suppor o RampD bu even beore
sequesraion he ederal governmenrsquos commimen o RampD invesmens had reached
is lowes level in a decade3 As congressional leaders hammer ou heir long-erm fiscal
policy in he coming weeks hey mus ac o reverse his recen rend991252and he firs sep
mus be repealing sequesraion In order o recommi o and simulae RampD however
he governmen mus pursue new and greaer invesmens
What is the federal governmentrsquos role in RampD
Fiscal policy991252paricularly as i relaes o he governmenrsquos commimen in areas such
as RampD991252is inexricably linked o our naionrsquos economic growh and global compei-
iveness Economiss believe ha since World War II anywhere rom one-hird o hal
o US economic growh can be atribued o echnological innovaion defined as he
developmen and inroducion o new ools ideas and processes ha enhance pro-
ducive capaciy4 Much o his innovaion is he produc o basic research which991252in
conras o applied research991252generally does no have immediaely observable applica-
ions I is his sor o basic research ha has helped pave he way or groundbreaking
economic developmens such as he Inerne which began as a Deense Deparmen-
unded projec and he Human Genome Projec991252a join projec o he Deparmen
o Energy and he Naional Insiues o Healh ha has already generaed economic
oupu ar in excess o he money devoed o i5
8132019 Sequestering American Innovation
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2 Center for American Progress | Sequestering American Innovation
In fiscal year 2013 he ederal governmen invesed approximaely $124 billion in
promoing RampD6 Fify-wo percen o his unding wen oward deense RampD which
includes basic and applied research in areas such as saellie echnology and advanced
weaponry Te remaining 48 percen o ederal RampD money wen oward nondeense
RampD Nondeense RampD invesmen is comprised largely o unding or he Naional
Insiues o Healh or NIH which received 50 percen o all ederal nondeense
RampD money Te bulk o he remaining ederal nondeense RampD money wen o heDeparmen o Energy or DOE he Naional Aeronauics and Space Adminisraion or
NASA and he Naional Science Foundaion or NSF
Mos ederal RampD unding acually suppors research conduced in universiies and
colleges privae indusry and nonprofi organizaions ofen hrough he awarding o
research grans rom agencies such as he NIH Roughly one-hird o ederal research
dollars goes o universiies and colleges one-hird goes o privae indusry and he
remaining hird is spen beween he ederal governmen and nonprofi organizaions7
Alhough i has declined as a share o gross domesic produc or GDP US RampDspending991252including all public and privae unding sources991252has increased signifi-
canly over he pas several decades Tis increase however has come abou largely as a
resul o dramaic increases in privae-indusry RampD spending According o daa rom
he NSF in 1953 privae indusry unded 44 percen o RampD in he Unied Saes
compared o he ederal governmenrsquos 54 percen8 By 2010 privae indusryrsquos share o
RampD financing had increased o 61 percen compared o he ederal governmenrsquos 31
percen9 Higher-educaion insiuions and nonprofi organizaions made up he bulk
o he remaining RampD unding
Many significan scienific discoveries and he resuling economic growh begin asmere kernels o hough rom basic research991252research ha akes several years i
no decades o complee Because he applied or commercial uses o such research
may no become eviden or a long ime no oher eniy in he Unied Saes is as
well placed as he ederal governmen o assume he shor-erm risks and uncerainy
inheren in basic research over he long run Alhough he ederal governmen is no
longer he larges supporer o RampD in erms o absolue expendiure he naure o is
invesmen in RampD remains criical o he overall naional RampD ecosysem In 2010
he ederal governmen coninued o provide he majoriy99125253 percen991252o he und-
ing or basic research10 By comparison privae indusry provided less han one-quarer
o basic-research unding while higher-educaion insiuions and nonprofi organiza-
ions made up almos all o he remainder
Privae companies lack sufficien incenives o inves heavily in basic research because
he sandard profi moivaion or invesmen is undermined by wo imporan risks he
higher probabiliy ha a basic-research projec will ail and he risk ha even i a projec
is successul he concepual knowledge gleaned rom i would be a useul inpu or he
producion o a variey o innovaive producs wihou compensaion or he iniial
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 37
3 Center for American Progress | Sequestering American Innovation
research Tus while indusryrsquos overall expendiure on RampD has increased dramai-
cally he percenage o ha expendiure or basic research remained almos idenical
rom 1953 o 2010 a roughly 7 percen11 Te ederal governmen on he oher hand
increased he percenage o is RampD budge or basic research rom 10 percen o almos
33 percen over he same period12 Universiies and colleges which perorm a majoriy
o basic research in he Unied Saes rely heavily upon suppor rom he ederal govern-
men or his ask In 2010 he ederal governmen provided 60 percen o he RampDunding o higher-educaion insiuions while he insiuions hemselves provided
20 percen o heir own unding13 Te remaining 20 percen o he unding was spli
beween indusry sae and local governmens and nonprofi organizaions14
Historical pattern of federal RampD expenditure
For he pas several decades ederal spending on RampD has increased seadily From
1977 o 2010 ederal RampD spending adjused or inflaion increased by an average
annual rae o 29 percen per year15
Boh deense RampD and nondeense RampD increaseda roughly he same 29 percen annual rae bu much o he increase in deense RampD
spending occurred in he 1980s and 2000s991252wo periods o significan miliary build-
ups owing o he Cold War and he wars in Iraq and Aghanisan
Alhough ederal invesmen in RampD has increased hisorically in real erms i has no
kep pace wih overall economic growh As a percenage o GDP annual ederal spending
on RampD averaged 097 percen o GDP rom 1977 o 201016 Tis figure increased grealy
during he las hroes o he Cold War in he 1980s wih RampDrsquos share o GDP peaking
a 119 percen in 1987 As he economy boomed during he 1990s RampD spending as a
percenage o GDP receded reaching a low in 2000 o a litle less han 078 percen
According o daa rom he NSF nonederally unded research has increased consider-
ably as a share o GDP rom 063 percen in 1953 o 193 percen in 2010 jus below
he all-ime high o 202 percen in 200017 In 2010 privae-indusry RampD financed
89 percen o nonederally unded RampD wih universiies and colleges sae and local
governmens and nonprofi organizaions making up he res18
Recent pattern of federal RampD expenditure
Wih he noable excepion o he 2009 simulus spending ederal unding or RampD has
eiher remained sagnan or decreased during he pas decade Beginning around 2005
ederal RampD spending began sagnaing and annual RampD spending growh was almos
nonexisen rom 2005 o 2008 Adjused or inflaion ederal RampD spending only
increased by 07 percen annually beween 2005 and 200819 Te ederal governmen
should have been increasing invesmens in RampD over he pas hree years in response
o make up or he los ime and opporuniy o he preceding decade
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 47
4 Center for American Progress | Sequestering American Innovation
Insead beginning in F Y 2011 Congress began aking acion o cu spending in he
name o defici reducion Tis defici reducion came primarily by way o he spending
reducions in he 2011 Budge Conrol Ac or BCA In addiion o he BCA reduced
appropriaion levels in he FY 2011 budge he fiscal cliff deal reached on January
1 2013 and he slowing growh in healh care coss have conribued o a dramaic
improvemen in he long-erm budge oulook Bu many o hese policies have come a
a significan economic cos as he economic growh he counry has experienced since2010 has no kep pace wih projecions rom ha ime A recen Cener or American
Progress analysis esimaes ha i he ederal governmen had no adoped auseriy
policies he US economy would currenly be growing a an average rae o 33 percen
per year as opposed o he 19 percen growh experienced since 201020 Such a growh
rae would have resuled in 25 million addiional new jobs since January 201121
Te yearly decrease in discreionary spending has had a significan negaive impac on
ederal RampD invesmen As a percenage o he overall economy ederal RampD spend-
ing decreased dramaically rom 099 percen in 2010 o 077 percen in 201322 In ac
according o an analysis by he American Associaion or he Advancemen o Scienceeven afer seting aside he 2009 simulus spending ederal RampD unding decreased by
almos 7 percen rom 2009 o 201223
What is sequestration doing and what will it do in the future
Lef unchecked sequesraion will grealy exacerbae he recen rend o decreasing ed-
eral RampD spending On op o he recen patern o underunding RampD sequesraion
urher reduced RampD spending by roughly $97
billion in 201324
I sequesraion were o remain inplace ederal RampD spending would be cu by $85
billion hrough FY 202125 As a percenage o GDP
ederally unded RampD would all o 062 percen
in FY 2021 he lowes level on record26 Under
his scenario hrough FY 2021 RampD unding or
he NIH would be cu by approximaely $20 bil-
lion or he DOE by approximaely $3 billion or
NASA by approximaely $11 billion and or he
NSF by approximaely $5 billion
In addiion o direc unding or RampD sequesra-
ion is also reducing our abiliy o prepare he nex
generaion o scieniss and researchers or careers
in RampD Among oher hings sequesraion is
reducing unding o he Deparmen o Educaion
by almos $25 billion in FY 201327 According o a
Senae Commitee repor rom 2012 Sae Grans
FIGURE 1
Federal RampD spending adjusted for inflation
$0
$50
$100
$150
$200
F e d e r a l R amp D s
p e n d i n g
i n b i l l i o n s o f 2 0 1 3 d o l l a r s
1 9 7 7
1 9 7 9
1 9 8 1
1 9 8 3
1 9 8 5
1 9 8 7
1 9 8 9
1 9 9 1
1 9 9 3
1 9 9 5
1 9 9 7
1 9 9 9
2 0 0 1
2 0 0 3
2 0 0 5
2 0 0 7
2 0 0 9
2 0 1 1
2 0 1 3
2 0 1 5
2 0 1 7
2 0 1 9
2 0 2 1
Nondefense
Defense
Total RampD
Annual pre-2010 growth rate
RampD shortfall
Source See endnote 6
8132019 Sequestering American Innovation
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5 Center for American Progress | Sequestering American Innovation
or Career and echnical Educaion which ldquo[pre-
pare] sudens or employmen in high-demand
fields such as healhcare renewable energy sci-
ence echnology engineering and mahemaicsrdquo
was slaed o be cu by abou $56 million in FY
2013 resuling in abou 700000 ewer sudens
served28 Addiionally Deparmen o Educaioncus reduced he Federal Work-Sudy Program by
$51 million in FY 201329 A he universiy level
sequesraion reduced spending on he Federal
Work-Sudy Program hundreds o housands o
sudens use o help pay or college by $51 million
his year alone30 And even hough Pell Grans991252
which provide unding o low-income undergradu-
aes991252were spared rom cus during he firs year
o sequesraion i is unclear i he program will be
spared beyond he 2013-14 school year31
While he shor-erm effecs o sequesraion
are real and significan he mos insidious and enduring effecs will be el over ime
because scienific discovery is cumulaive Jus as RampD invesmens oday will pay off
down he road missed opporuniies in RampD suppor will be negaively magnified in
he long run According o Seven Warren vice chancellor or research a he Universiy
o Kansas ldquo[Sequesraion] is like a slow growing cancerrdquo32 Like a slow-growing cancer
he long-erm consequences o sequesraion paricularly in he area o ederal inves-
men in RampD may no become readily apparen unil heir effecs are oo difficul o
reverse Tis means ha simply resoring he $97 billion in RampD cus in FY 2013 isno sufficien o pu RampD back on he righ rack in FY 2014 and in subsequen years
Addiional unding over and above he amouns ha have been cu mus be pu oward
RampD o make up or he ime los in FY 2013 and previous years
For he sake o comparison i in 2010 he ederal governmen had simply allowed RampD
spending o coninue o grow a he same rae ha i has hisorically hen in FY 2013
he ederal governmen would have spen $165 billion on RampD $41 billion more han
was spen in FY 2013 under sequesraion33 By he end o sequesraion in FY 2021 he
ederal governmen would be spending $128 billion in RampD a ull $80 billion less han
wha i would have spen under is hisorical growh rae34
Because he value o RampD capial depreciaes over ime wihou coninual replenish-
men o RampD invesmen uure innovaive capaciy decreases35 Hence he concern
among researchers across he counry is ha sequesraion will creae a ldquogeneraional
gaprdquo according o Elias Zerhouni ormer direcor o he Naional Insiues o Healh36
Moreover he lack o consisen ederal suppor or RampD could lead uure science and
FIGURE 2
Federal RampD spending as a share of GDP
06
08
10
12
07
09
11
1 9 7 7
1 9 7 9
1 9 8 1
1 9 8 3
1 9 8 5
1 9 8 7
1 9 8 9
1 9 9 1
1 9 9 3
1 9 9 5
1 9 9 7
1 9 9 9
2 0 0 1
2 0 0 3
2 0 0 5
2 0 0 7
2 0 0 9
2 0 1 1
2 0 1
3
2 0 1 5
2 0 1 7
2 0 1 9
2 0 2 1
P e r c e n t a g e o f G D P
Austerity (2010ndashpresent)
Pre-austerity (1977ndash2010)
Source See endnote 6
8132019 Sequestering American Innovation
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6 Center for American Progress | Sequestering American Innovation
echnology graduaes991252including hose who come rom abroad o obain a universiy
educaion991252o ake heir alens elsewhere o counries ha display more o a com-
mimen o scienific innovaion Almos one in five respondens o a recen American
Sociey or Biochemisry and Molecular Biology survey indicaed ha hey are consider-
ing moving heir research abroad37
Conclusion
Due o he echnological innovaion ha i produces scienific RampD is one o he
main engines powering uure economic growh Alhough he ederal governmen has
suppored innovaion by invesing an increasing amoun o money in RampD over ime
his invesmen has no kep pace wih overall economic growh in recen years Fiscal
auseriy policies ha began in 2010 have negaively impaced he ederal governmenrsquos
commimen o RampD and sequesraion is making an already dire siuaion worse
Tese policies have no only reduced our curren scienific oupu bu have also se he
sage or weaker economic growh in he uure Given he ederal governmenrsquos singu-lar role in supporing basic research paricularly he research conduced a American
colleges and universiies i is criical ha Congress reaffirm is commimen o scienific
discovery by repealing sequesraion and supporing new invesmens in RampD
Kwame Boadi is a Policy Analyst at the Center for American Progress
8132019 Sequestering American Innovation
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7 Center for American Progress | Sequestering American Innovation
Endnotes 1 Office of Management and Budget OMB Report to the
Congress on the Joint Committee Sequestration for Fiscal Year2013 (Executive Office of the President 2013) p 3 Table 1
2 Authorrsquos calculation is based on budget totals includingfederal budget authority classified as subfunctions 251(General Science and Basic Research) 252 (Space and
Research Technology) 552 (Health Research and Training)and the ldquoResearch Development Test and Evaluationrdquoaccounts within subfunction 051 (Department of Defense)RampD figures do not include funding for subfunction 053(Atomic Energy Defense Activities) due to the inability toisolate RampD-specific funding at the account level for theDepartment of Energyrsquos defense-related activities Historicaldata for FY 1977 through FY 2012 come from the O ffice ofManagement and Budget Projections for FY 2013 throughFY 2021 are based on data from the Congressional BudgetOffice Cut figures are derived by comparing a n estimate ofwhat the federal government would spend on RampD duringsequestration against what the federal government wouldspend on RampD if it had maintained the FY 2012 preseques-tration spending levels for RampD through FY 2021
3 American Association for the Advancement of ScienceldquoDefense Nondefense and Total RampD 1976ndash2014rdquo availableat httpwwwaaasorgspprdguihistshtml (last accessedNovember 2013)
4 Gordon Reikard ldquoStimulating Economic Growth Through Technological Advancerdquo AMSTATNEWS March 1 2011 avail-able at httpmagazineamstatorgblog20110301econ-growthmar11 Robert M Solow ldquoTechnical Change and theAggregate Production Functionrdquo The Review of Economicsand Statistics 39 (3) (1957) 312ndash320
5 Gautam Naik ldquoReport Touts Economic Impact of Gene Proj-ectrdquo The Wall Street Journal May 11 2011 available at httponlinewsjcomarticleSB10001424052748704681904576315253143162630html
6 Authorrsquos calculation is based on budget totals includingfederal budget authority classified as subfunctions 251(General Science and Basic Research) 252 (Space andResearch Technology) 552 (Health Research and Training)and the ldquoResearch Development Test and Evaluationrdquoaccounts within subfunction 051 (Department of Defense)RampD figures do not include funding for subfunction 053(Atomic Energy Defense Activities) due to the inability to
isolate RampD-specific funding at the account level for theDepartment of Energyrsquos defense-related activities Historicaldata for FY 1977 through FY 2012 come from the Office ofManagement and Budget Projections for FY 2013 throughFY 2021 are based on data from the Congressional BudgetOffice
7 National Science Foundation ldquoNational Patterns of RampDResources 2010ndash11 Data Updaterdquo available at httpwwwnsfgovstatisticsnsf13318contentcfmpub_id=4268ampid=2tab11 (last accessed November 2013)
8 Ibid
9 Ibid
10 Ibid
11 Ibid
12 Ibid
13 Ibid
14 Ibid
15 See endnote 7
16 Ibid
17 National Science Foundation ldquoNational Patterns of RampDResources 2010ndash11 Data Updaterdquo
18 Ibid
19 See endnote 7
20 Adam Hersh ldquoIn a World Without Austerityhelliprdquo Centerfor American Progress October 4 2013 available athttpwwwamericanprogressorgissueseconomy
news2013100476305in-a-world-without-austerity
21 Ibid
22 See endnote 7
23 American Association for the Advancement of Science ldquoRampDBudget and Policy Programrdquo available at httpwwwaaasorgspprdguihistshtml (last accessed December 2013)
24 See endnote 7
25 Ibid
26 Ibid
27 US Department of Education Fiscal Year 2014 BudgetSummary and Background Information (US Department ofEducation 2013) Appendix 1
28 Sen Tom Harkin ldquoUnder Threat Sequestrationrsquos Impacton Nondefense Jobs and Servicesrdquo (Washington SenateAppropriations Subcommittee on Labor Health andHuman Services Education and Related Agencies 2012)p 61 available at httpwwwharkinsenategovdocu-mentspdf500ff3554f9bapdf These figures represent anupdated estimation of the committeersquos original figures Thecommitteersquos calculations were based on a sequester cut of78 percent but the American Taxpayer Relief Act reducedthe FY 2013 sequester of nondefense programs to about 5percent Since the final sequester cut was approximately 64percent of the committeersquos original estimate the figures inthis report are 64 percent of the figures c alculated by thecommittee
29 Kwame Boadi ldquoSequestration Nation Making College LessAccessible for Our Studentsrdquo Center for Americ an ProgressJune 10 2013 available at httpwwwamericanprogressorgissueseconomynews2013061065806making-college-less-accessible-for-our-students
30 Ibid
31 Federal Student Aid ldquoFY 2014 Sequestration Changes to the Title IV Student Aid Programs (Updated October 25 2013)available at httpifapedgovdpclettersGEN1322html (last accessed December 2013)
32 Sam Stein ldquoSequestration Cuts to Research lsquoLike a SlowlyGrowing Cancerrsquordquo HuffPost Politics July 10 2013 available athttpwwwhuffingtonpostcom20130710sequestration-cuts-research_n_3576030html
33 See endnote 7
34 Ibid
35 Justin Hicks and Robert Atkinson ldquoEroding Our FoundationSequestration RampD Innovation and US Economic Growthrdquo(Washington The Information Technology and InnovationFoundation 2012) Ning Huang and Erwin Diewert ldquoEstima-
tion of RampD Depreciation Rates A Suggested Methodologyand Preliminary Applicationrdquo (Vancouver BC University ofBritish Columbia Department of Economics 2009)
36 Sarah Bacon ldquoMedical Research Cuts Have ImmediateHealth Effectsrdquo The Atlantic April 17 2013 available athttpwwwtheatlanticcomhealtharchive201304medi-cal-research-cuts-have-immediate-health-effects275045
37 The American Society for Biochemistry and MolecularBiology ldquoNondefense Discretionary Science 2013 SurveyUnlimited Potential Vanishing Opportunityrdquo (2013)
8132019 Sequestering American Innovation
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2 Center for American Progress | Sequestering American Innovation
In fiscal year 2013 he ederal governmen invesed approximaely $124 billion in
promoing RampD6 Fify-wo percen o his unding wen oward deense RampD which
includes basic and applied research in areas such as saellie echnology and advanced
weaponry Te remaining 48 percen o ederal RampD money wen oward nondeense
RampD Nondeense RampD invesmen is comprised largely o unding or he Naional
Insiues o Healh or NIH which received 50 percen o all ederal nondeense
RampD money Te bulk o he remaining ederal nondeense RampD money wen o heDeparmen o Energy or DOE he Naional Aeronauics and Space Adminisraion or
NASA and he Naional Science Foundaion or NSF
Mos ederal RampD unding acually suppors research conduced in universiies and
colleges privae indusry and nonprofi organizaions ofen hrough he awarding o
research grans rom agencies such as he NIH Roughly one-hird o ederal research
dollars goes o universiies and colleges one-hird goes o privae indusry and he
remaining hird is spen beween he ederal governmen and nonprofi organizaions7
Alhough i has declined as a share o gross domesic produc or GDP US RampDspending991252including all public and privae unding sources991252has increased signifi-
canly over he pas several decades Tis increase however has come abou largely as a
resul o dramaic increases in privae-indusry RampD spending According o daa rom
he NSF in 1953 privae indusry unded 44 percen o RampD in he Unied Saes
compared o he ederal governmenrsquos 54 percen8 By 2010 privae indusryrsquos share o
RampD financing had increased o 61 percen compared o he ederal governmenrsquos 31
percen9 Higher-educaion insiuions and nonprofi organizaions made up he bulk
o he remaining RampD unding
Many significan scienific discoveries and he resuling economic growh begin asmere kernels o hough rom basic research991252research ha akes several years i
no decades o complee Because he applied or commercial uses o such research
may no become eviden or a long ime no oher eniy in he Unied Saes is as
well placed as he ederal governmen o assume he shor-erm risks and uncerainy
inheren in basic research over he long run Alhough he ederal governmen is no
longer he larges supporer o RampD in erms o absolue expendiure he naure o is
invesmen in RampD remains criical o he overall naional RampD ecosysem In 2010
he ederal governmen coninued o provide he majoriy99125253 percen991252o he und-
ing or basic research10 By comparison privae indusry provided less han one-quarer
o basic-research unding while higher-educaion insiuions and nonprofi organiza-
ions made up almos all o he remainder
Privae companies lack sufficien incenives o inves heavily in basic research because
he sandard profi moivaion or invesmen is undermined by wo imporan risks he
higher probabiliy ha a basic-research projec will ail and he risk ha even i a projec
is successul he concepual knowledge gleaned rom i would be a useul inpu or he
producion o a variey o innovaive producs wihou compensaion or he iniial
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 37
3 Center for American Progress | Sequestering American Innovation
research Tus while indusryrsquos overall expendiure on RampD has increased dramai-
cally he percenage o ha expendiure or basic research remained almos idenical
rom 1953 o 2010 a roughly 7 percen11 Te ederal governmen on he oher hand
increased he percenage o is RampD budge or basic research rom 10 percen o almos
33 percen over he same period12 Universiies and colleges which perorm a majoriy
o basic research in he Unied Saes rely heavily upon suppor rom he ederal govern-
men or his ask In 2010 he ederal governmen provided 60 percen o he RampDunding o higher-educaion insiuions while he insiuions hemselves provided
20 percen o heir own unding13 Te remaining 20 percen o he unding was spli
beween indusry sae and local governmens and nonprofi organizaions14
Historical pattern of federal RampD expenditure
For he pas several decades ederal spending on RampD has increased seadily From
1977 o 2010 ederal RampD spending adjused or inflaion increased by an average
annual rae o 29 percen per year15
Boh deense RampD and nondeense RampD increaseda roughly he same 29 percen annual rae bu much o he increase in deense RampD
spending occurred in he 1980s and 2000s991252wo periods o significan miliary build-
ups owing o he Cold War and he wars in Iraq and Aghanisan
Alhough ederal invesmen in RampD has increased hisorically in real erms i has no
kep pace wih overall economic growh As a percenage o GDP annual ederal spending
on RampD averaged 097 percen o GDP rom 1977 o 201016 Tis figure increased grealy
during he las hroes o he Cold War in he 1980s wih RampDrsquos share o GDP peaking
a 119 percen in 1987 As he economy boomed during he 1990s RampD spending as a
percenage o GDP receded reaching a low in 2000 o a litle less han 078 percen
According o daa rom he NSF nonederally unded research has increased consider-
ably as a share o GDP rom 063 percen in 1953 o 193 percen in 2010 jus below
he all-ime high o 202 percen in 200017 In 2010 privae-indusry RampD financed
89 percen o nonederally unded RampD wih universiies and colleges sae and local
governmens and nonprofi organizaions making up he res18
Recent pattern of federal RampD expenditure
Wih he noable excepion o he 2009 simulus spending ederal unding or RampD has
eiher remained sagnan or decreased during he pas decade Beginning around 2005
ederal RampD spending began sagnaing and annual RampD spending growh was almos
nonexisen rom 2005 o 2008 Adjused or inflaion ederal RampD spending only
increased by 07 percen annually beween 2005 and 200819 Te ederal governmen
should have been increasing invesmens in RampD over he pas hree years in response
o make up or he los ime and opporuniy o he preceding decade
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 47
4 Center for American Progress | Sequestering American Innovation
Insead beginning in F Y 2011 Congress began aking acion o cu spending in he
name o defici reducion Tis defici reducion came primarily by way o he spending
reducions in he 2011 Budge Conrol Ac or BCA In addiion o he BCA reduced
appropriaion levels in he FY 2011 budge he fiscal cliff deal reached on January
1 2013 and he slowing growh in healh care coss have conribued o a dramaic
improvemen in he long-erm budge oulook Bu many o hese policies have come a
a significan economic cos as he economic growh he counry has experienced since2010 has no kep pace wih projecions rom ha ime A recen Cener or American
Progress analysis esimaes ha i he ederal governmen had no adoped auseriy
policies he US economy would currenly be growing a an average rae o 33 percen
per year as opposed o he 19 percen growh experienced since 201020 Such a growh
rae would have resuled in 25 million addiional new jobs since January 201121
Te yearly decrease in discreionary spending has had a significan negaive impac on
ederal RampD invesmen As a percenage o he overall economy ederal RampD spend-
ing decreased dramaically rom 099 percen in 2010 o 077 percen in 201322 In ac
according o an analysis by he American Associaion or he Advancemen o Scienceeven afer seting aside he 2009 simulus spending ederal RampD unding decreased by
almos 7 percen rom 2009 o 201223
What is sequestration doing and what will it do in the future
Lef unchecked sequesraion will grealy exacerbae he recen rend o decreasing ed-
eral RampD spending On op o he recen patern o underunding RampD sequesraion
urher reduced RampD spending by roughly $97
billion in 201324
I sequesraion were o remain inplace ederal RampD spending would be cu by $85
billion hrough FY 202125 As a percenage o GDP
ederally unded RampD would all o 062 percen
in FY 2021 he lowes level on record26 Under
his scenario hrough FY 2021 RampD unding or
he NIH would be cu by approximaely $20 bil-
lion or he DOE by approximaely $3 billion or
NASA by approximaely $11 billion and or he
NSF by approximaely $5 billion
In addiion o direc unding or RampD sequesra-
ion is also reducing our abiliy o prepare he nex
generaion o scieniss and researchers or careers
in RampD Among oher hings sequesraion is
reducing unding o he Deparmen o Educaion
by almos $25 billion in FY 201327 According o a
Senae Commitee repor rom 2012 Sae Grans
FIGURE 1
Federal RampD spending adjusted for inflation
$0
$50
$100
$150
$200
F e d e r a l R amp D s
p e n d i n g
i n b i l l i o n s o f 2 0 1 3 d o l l a r s
1 9 7 7
1 9 7 9
1 9 8 1
1 9 8 3
1 9 8 5
1 9 8 7
1 9 8 9
1 9 9 1
1 9 9 3
1 9 9 5
1 9 9 7
1 9 9 9
2 0 0 1
2 0 0 3
2 0 0 5
2 0 0 7
2 0 0 9
2 0 1 1
2 0 1 3
2 0 1 5
2 0 1 7
2 0 1 9
2 0 2 1
Nondefense
Defense
Total RampD
Annual pre-2010 growth rate
RampD shortfall
Source See endnote 6
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 57
5 Center for American Progress | Sequestering American Innovation
or Career and echnical Educaion which ldquo[pre-
pare] sudens or employmen in high-demand
fields such as healhcare renewable energy sci-
ence echnology engineering and mahemaicsrdquo
was slaed o be cu by abou $56 million in FY
2013 resuling in abou 700000 ewer sudens
served28 Addiionally Deparmen o Educaioncus reduced he Federal Work-Sudy Program by
$51 million in FY 201329 A he universiy level
sequesraion reduced spending on he Federal
Work-Sudy Program hundreds o housands o
sudens use o help pay or college by $51 million
his year alone30 And even hough Pell Grans991252
which provide unding o low-income undergradu-
aes991252were spared rom cus during he firs year
o sequesraion i is unclear i he program will be
spared beyond he 2013-14 school year31
While he shor-erm effecs o sequesraion
are real and significan he mos insidious and enduring effecs will be el over ime
because scienific discovery is cumulaive Jus as RampD invesmens oday will pay off
down he road missed opporuniies in RampD suppor will be negaively magnified in
he long run According o Seven Warren vice chancellor or research a he Universiy
o Kansas ldquo[Sequesraion] is like a slow growing cancerrdquo32 Like a slow-growing cancer
he long-erm consequences o sequesraion paricularly in he area o ederal inves-
men in RampD may no become readily apparen unil heir effecs are oo difficul o
reverse Tis means ha simply resoring he $97 billion in RampD cus in FY 2013 isno sufficien o pu RampD back on he righ rack in FY 2014 and in subsequen years
Addiional unding over and above he amouns ha have been cu mus be pu oward
RampD o make up or he ime los in FY 2013 and previous years
For he sake o comparison i in 2010 he ederal governmen had simply allowed RampD
spending o coninue o grow a he same rae ha i has hisorically hen in FY 2013
he ederal governmen would have spen $165 billion on RampD $41 billion more han
was spen in FY 2013 under sequesraion33 By he end o sequesraion in FY 2021 he
ederal governmen would be spending $128 billion in RampD a ull $80 billion less han
wha i would have spen under is hisorical growh rae34
Because he value o RampD capial depreciaes over ime wihou coninual replenish-
men o RampD invesmen uure innovaive capaciy decreases35 Hence he concern
among researchers across he counry is ha sequesraion will creae a ldquogeneraional
gaprdquo according o Elias Zerhouni ormer direcor o he Naional Insiues o Healh36
Moreover he lack o consisen ederal suppor or RampD could lead uure science and
FIGURE 2
Federal RampD spending as a share of GDP
06
08
10
12
07
09
11
1 9 7 7
1 9 7 9
1 9 8 1
1 9 8 3
1 9 8 5
1 9 8 7
1 9 8 9
1 9 9 1
1 9 9 3
1 9 9 5
1 9 9 7
1 9 9 9
2 0 0 1
2 0 0 3
2 0 0 5
2 0 0 7
2 0 0 9
2 0 1 1
2 0 1
3
2 0 1 5
2 0 1 7
2 0 1 9
2 0 2 1
P e r c e n t a g e o f G D P
Austerity (2010ndashpresent)
Pre-austerity (1977ndash2010)
Source See endnote 6
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 67
6 Center for American Progress | Sequestering American Innovation
echnology graduaes991252including hose who come rom abroad o obain a universiy
educaion991252o ake heir alens elsewhere o counries ha display more o a com-
mimen o scienific innovaion Almos one in five respondens o a recen American
Sociey or Biochemisry and Molecular Biology survey indicaed ha hey are consider-
ing moving heir research abroad37
Conclusion
Due o he echnological innovaion ha i produces scienific RampD is one o he
main engines powering uure economic growh Alhough he ederal governmen has
suppored innovaion by invesing an increasing amoun o money in RampD over ime
his invesmen has no kep pace wih overall economic growh in recen years Fiscal
auseriy policies ha began in 2010 have negaively impaced he ederal governmenrsquos
commimen o RampD and sequesraion is making an already dire siuaion worse
Tese policies have no only reduced our curren scienific oupu bu have also se he
sage or weaker economic growh in he uure Given he ederal governmenrsquos singu-lar role in supporing basic research paricularly he research conduced a American
colleges and universiies i is criical ha Congress reaffirm is commimen o scienific
discovery by repealing sequesraion and supporing new invesmens in RampD
Kwame Boadi is a Policy Analyst at the Center for American Progress
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 77
7 Center for American Progress | Sequestering American Innovation
Endnotes 1 Office of Management and Budget OMB Report to the
Congress on the Joint Committee Sequestration for Fiscal Year2013 (Executive Office of the President 2013) p 3 Table 1
2 Authorrsquos calculation is based on budget totals includingfederal budget authority classified as subfunctions 251(General Science and Basic Research) 252 (Space and
Research Technology) 552 (Health Research and Training)and the ldquoResearch Development Test and Evaluationrdquoaccounts within subfunction 051 (Department of Defense)RampD figures do not include funding for subfunction 053(Atomic Energy Defense Activities) due to the inability toisolate RampD-specific funding at the account level for theDepartment of Energyrsquos defense-related activities Historicaldata for FY 1977 through FY 2012 come from the O ffice ofManagement and Budget Projections for FY 2013 throughFY 2021 are based on data from the Congressional BudgetOffice Cut figures are derived by comparing a n estimate ofwhat the federal government would spend on RampD duringsequestration against what the federal government wouldspend on RampD if it had maintained the FY 2012 preseques-tration spending levels for RampD through FY 2021
3 American Association for the Advancement of ScienceldquoDefense Nondefense and Total RampD 1976ndash2014rdquo availableat httpwwwaaasorgspprdguihistshtml (last accessedNovember 2013)
4 Gordon Reikard ldquoStimulating Economic Growth Through Technological Advancerdquo AMSTATNEWS March 1 2011 avail-able at httpmagazineamstatorgblog20110301econ-growthmar11 Robert M Solow ldquoTechnical Change and theAggregate Production Functionrdquo The Review of Economicsand Statistics 39 (3) (1957) 312ndash320
5 Gautam Naik ldquoReport Touts Economic Impact of Gene Proj-ectrdquo The Wall Street Journal May 11 2011 available at httponlinewsjcomarticleSB10001424052748704681904576315253143162630html
6 Authorrsquos calculation is based on budget totals includingfederal budget authority classified as subfunctions 251(General Science and Basic Research) 252 (Space andResearch Technology) 552 (Health Research and Training)and the ldquoResearch Development Test and Evaluationrdquoaccounts within subfunction 051 (Department of Defense)RampD figures do not include funding for subfunction 053(Atomic Energy Defense Activities) due to the inability to
isolate RampD-specific funding at the account level for theDepartment of Energyrsquos defense-related activities Historicaldata for FY 1977 through FY 2012 come from the Office ofManagement and Budget Projections for FY 2013 throughFY 2021 are based on data from the Congressional BudgetOffice
7 National Science Foundation ldquoNational Patterns of RampDResources 2010ndash11 Data Updaterdquo available at httpwwwnsfgovstatisticsnsf13318contentcfmpub_id=4268ampid=2tab11 (last accessed November 2013)
8 Ibid
9 Ibid
10 Ibid
11 Ibid
12 Ibid
13 Ibid
14 Ibid
15 See endnote 7
16 Ibid
17 National Science Foundation ldquoNational Patterns of RampDResources 2010ndash11 Data Updaterdquo
18 Ibid
19 See endnote 7
20 Adam Hersh ldquoIn a World Without Austerityhelliprdquo Centerfor American Progress October 4 2013 available athttpwwwamericanprogressorgissueseconomy
news2013100476305in-a-world-without-austerity
21 Ibid
22 See endnote 7
23 American Association for the Advancement of Science ldquoRampDBudget and Policy Programrdquo available at httpwwwaaasorgspprdguihistshtml (last accessed December 2013)
24 See endnote 7
25 Ibid
26 Ibid
27 US Department of Education Fiscal Year 2014 BudgetSummary and Background Information (US Department ofEducation 2013) Appendix 1
28 Sen Tom Harkin ldquoUnder Threat Sequestrationrsquos Impacton Nondefense Jobs and Servicesrdquo (Washington SenateAppropriations Subcommittee on Labor Health andHuman Services Education and Related Agencies 2012)p 61 available at httpwwwharkinsenategovdocu-mentspdf500ff3554f9bapdf These figures represent anupdated estimation of the committeersquos original figures Thecommitteersquos calculations were based on a sequester cut of78 percent but the American Taxpayer Relief Act reducedthe FY 2013 sequester of nondefense programs to about 5percent Since the final sequester cut was approximately 64percent of the committeersquos original estimate the figures inthis report are 64 percent of the figures c alculated by thecommittee
29 Kwame Boadi ldquoSequestration Nation Making College LessAccessible for Our Studentsrdquo Center for Americ an ProgressJune 10 2013 available at httpwwwamericanprogressorgissueseconomynews2013061065806making-college-less-accessible-for-our-students
30 Ibid
31 Federal Student Aid ldquoFY 2014 Sequestration Changes to the Title IV Student Aid Programs (Updated October 25 2013)available at httpifapedgovdpclettersGEN1322html (last accessed December 2013)
32 Sam Stein ldquoSequestration Cuts to Research lsquoLike a SlowlyGrowing Cancerrsquordquo HuffPost Politics July 10 2013 available athttpwwwhuffingtonpostcom20130710sequestration-cuts-research_n_3576030html
33 See endnote 7
34 Ibid
35 Justin Hicks and Robert Atkinson ldquoEroding Our FoundationSequestration RampD Innovation and US Economic Growthrdquo(Washington The Information Technology and InnovationFoundation 2012) Ning Huang and Erwin Diewert ldquoEstima-
tion of RampD Depreciation Rates A Suggested Methodologyand Preliminary Applicationrdquo (Vancouver BC University ofBritish Columbia Department of Economics 2009)
36 Sarah Bacon ldquoMedical Research Cuts Have ImmediateHealth Effectsrdquo The Atlantic April 17 2013 available athttpwwwtheatlanticcomhealtharchive201304medi-cal-research-cuts-have-immediate-health-effects275045
37 The American Society for Biochemistry and MolecularBiology ldquoNondefense Discretionary Science 2013 SurveyUnlimited Potential Vanishing Opportunityrdquo (2013)
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 37
3 Center for American Progress | Sequestering American Innovation
research Tus while indusryrsquos overall expendiure on RampD has increased dramai-
cally he percenage o ha expendiure or basic research remained almos idenical
rom 1953 o 2010 a roughly 7 percen11 Te ederal governmen on he oher hand
increased he percenage o is RampD budge or basic research rom 10 percen o almos
33 percen over he same period12 Universiies and colleges which perorm a majoriy
o basic research in he Unied Saes rely heavily upon suppor rom he ederal govern-
men or his ask In 2010 he ederal governmen provided 60 percen o he RampDunding o higher-educaion insiuions while he insiuions hemselves provided
20 percen o heir own unding13 Te remaining 20 percen o he unding was spli
beween indusry sae and local governmens and nonprofi organizaions14
Historical pattern of federal RampD expenditure
For he pas several decades ederal spending on RampD has increased seadily From
1977 o 2010 ederal RampD spending adjused or inflaion increased by an average
annual rae o 29 percen per year15
Boh deense RampD and nondeense RampD increaseda roughly he same 29 percen annual rae bu much o he increase in deense RampD
spending occurred in he 1980s and 2000s991252wo periods o significan miliary build-
ups owing o he Cold War and he wars in Iraq and Aghanisan
Alhough ederal invesmen in RampD has increased hisorically in real erms i has no
kep pace wih overall economic growh As a percenage o GDP annual ederal spending
on RampD averaged 097 percen o GDP rom 1977 o 201016 Tis figure increased grealy
during he las hroes o he Cold War in he 1980s wih RampDrsquos share o GDP peaking
a 119 percen in 1987 As he economy boomed during he 1990s RampD spending as a
percenage o GDP receded reaching a low in 2000 o a litle less han 078 percen
According o daa rom he NSF nonederally unded research has increased consider-
ably as a share o GDP rom 063 percen in 1953 o 193 percen in 2010 jus below
he all-ime high o 202 percen in 200017 In 2010 privae-indusry RampD financed
89 percen o nonederally unded RampD wih universiies and colleges sae and local
governmens and nonprofi organizaions making up he res18
Recent pattern of federal RampD expenditure
Wih he noable excepion o he 2009 simulus spending ederal unding or RampD has
eiher remained sagnan or decreased during he pas decade Beginning around 2005
ederal RampD spending began sagnaing and annual RampD spending growh was almos
nonexisen rom 2005 o 2008 Adjused or inflaion ederal RampD spending only
increased by 07 percen annually beween 2005 and 200819 Te ederal governmen
should have been increasing invesmens in RampD over he pas hree years in response
o make up or he los ime and opporuniy o he preceding decade
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 47
4 Center for American Progress | Sequestering American Innovation
Insead beginning in F Y 2011 Congress began aking acion o cu spending in he
name o defici reducion Tis defici reducion came primarily by way o he spending
reducions in he 2011 Budge Conrol Ac or BCA In addiion o he BCA reduced
appropriaion levels in he FY 2011 budge he fiscal cliff deal reached on January
1 2013 and he slowing growh in healh care coss have conribued o a dramaic
improvemen in he long-erm budge oulook Bu many o hese policies have come a
a significan economic cos as he economic growh he counry has experienced since2010 has no kep pace wih projecions rom ha ime A recen Cener or American
Progress analysis esimaes ha i he ederal governmen had no adoped auseriy
policies he US economy would currenly be growing a an average rae o 33 percen
per year as opposed o he 19 percen growh experienced since 201020 Such a growh
rae would have resuled in 25 million addiional new jobs since January 201121
Te yearly decrease in discreionary spending has had a significan negaive impac on
ederal RampD invesmen As a percenage o he overall economy ederal RampD spend-
ing decreased dramaically rom 099 percen in 2010 o 077 percen in 201322 In ac
according o an analysis by he American Associaion or he Advancemen o Scienceeven afer seting aside he 2009 simulus spending ederal RampD unding decreased by
almos 7 percen rom 2009 o 201223
What is sequestration doing and what will it do in the future
Lef unchecked sequesraion will grealy exacerbae he recen rend o decreasing ed-
eral RampD spending On op o he recen patern o underunding RampD sequesraion
urher reduced RampD spending by roughly $97
billion in 201324
I sequesraion were o remain inplace ederal RampD spending would be cu by $85
billion hrough FY 202125 As a percenage o GDP
ederally unded RampD would all o 062 percen
in FY 2021 he lowes level on record26 Under
his scenario hrough FY 2021 RampD unding or
he NIH would be cu by approximaely $20 bil-
lion or he DOE by approximaely $3 billion or
NASA by approximaely $11 billion and or he
NSF by approximaely $5 billion
In addiion o direc unding or RampD sequesra-
ion is also reducing our abiliy o prepare he nex
generaion o scieniss and researchers or careers
in RampD Among oher hings sequesraion is
reducing unding o he Deparmen o Educaion
by almos $25 billion in FY 201327 According o a
Senae Commitee repor rom 2012 Sae Grans
FIGURE 1
Federal RampD spending adjusted for inflation
$0
$50
$100
$150
$200
F e d e r a l R amp D s
p e n d i n g
i n b i l l i o n s o f 2 0 1 3 d o l l a r s
1 9 7 7
1 9 7 9
1 9 8 1
1 9 8 3
1 9 8 5
1 9 8 7
1 9 8 9
1 9 9 1
1 9 9 3
1 9 9 5
1 9 9 7
1 9 9 9
2 0 0 1
2 0 0 3
2 0 0 5
2 0 0 7
2 0 0 9
2 0 1 1
2 0 1 3
2 0 1 5
2 0 1 7
2 0 1 9
2 0 2 1
Nondefense
Defense
Total RampD
Annual pre-2010 growth rate
RampD shortfall
Source See endnote 6
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 57
5 Center for American Progress | Sequestering American Innovation
or Career and echnical Educaion which ldquo[pre-
pare] sudens or employmen in high-demand
fields such as healhcare renewable energy sci-
ence echnology engineering and mahemaicsrdquo
was slaed o be cu by abou $56 million in FY
2013 resuling in abou 700000 ewer sudens
served28 Addiionally Deparmen o Educaioncus reduced he Federal Work-Sudy Program by
$51 million in FY 201329 A he universiy level
sequesraion reduced spending on he Federal
Work-Sudy Program hundreds o housands o
sudens use o help pay or college by $51 million
his year alone30 And even hough Pell Grans991252
which provide unding o low-income undergradu-
aes991252were spared rom cus during he firs year
o sequesraion i is unclear i he program will be
spared beyond he 2013-14 school year31
While he shor-erm effecs o sequesraion
are real and significan he mos insidious and enduring effecs will be el over ime
because scienific discovery is cumulaive Jus as RampD invesmens oday will pay off
down he road missed opporuniies in RampD suppor will be negaively magnified in
he long run According o Seven Warren vice chancellor or research a he Universiy
o Kansas ldquo[Sequesraion] is like a slow growing cancerrdquo32 Like a slow-growing cancer
he long-erm consequences o sequesraion paricularly in he area o ederal inves-
men in RampD may no become readily apparen unil heir effecs are oo difficul o
reverse Tis means ha simply resoring he $97 billion in RampD cus in FY 2013 isno sufficien o pu RampD back on he righ rack in FY 2014 and in subsequen years
Addiional unding over and above he amouns ha have been cu mus be pu oward
RampD o make up or he ime los in FY 2013 and previous years
For he sake o comparison i in 2010 he ederal governmen had simply allowed RampD
spending o coninue o grow a he same rae ha i has hisorically hen in FY 2013
he ederal governmen would have spen $165 billion on RampD $41 billion more han
was spen in FY 2013 under sequesraion33 By he end o sequesraion in FY 2021 he
ederal governmen would be spending $128 billion in RampD a ull $80 billion less han
wha i would have spen under is hisorical growh rae34
Because he value o RampD capial depreciaes over ime wihou coninual replenish-
men o RampD invesmen uure innovaive capaciy decreases35 Hence he concern
among researchers across he counry is ha sequesraion will creae a ldquogeneraional
gaprdquo according o Elias Zerhouni ormer direcor o he Naional Insiues o Healh36
Moreover he lack o consisen ederal suppor or RampD could lead uure science and
FIGURE 2
Federal RampD spending as a share of GDP
06
08
10
12
07
09
11
1 9 7 7
1 9 7 9
1 9 8 1
1 9 8 3
1 9 8 5
1 9 8 7
1 9 8 9
1 9 9 1
1 9 9 3
1 9 9 5
1 9 9 7
1 9 9 9
2 0 0 1
2 0 0 3
2 0 0 5
2 0 0 7
2 0 0 9
2 0 1 1
2 0 1
3
2 0 1 5
2 0 1 7
2 0 1 9
2 0 2 1
P e r c e n t a g e o f G D P
Austerity (2010ndashpresent)
Pre-austerity (1977ndash2010)
Source See endnote 6
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 67
6 Center for American Progress | Sequestering American Innovation
echnology graduaes991252including hose who come rom abroad o obain a universiy
educaion991252o ake heir alens elsewhere o counries ha display more o a com-
mimen o scienific innovaion Almos one in five respondens o a recen American
Sociey or Biochemisry and Molecular Biology survey indicaed ha hey are consider-
ing moving heir research abroad37
Conclusion
Due o he echnological innovaion ha i produces scienific RampD is one o he
main engines powering uure economic growh Alhough he ederal governmen has
suppored innovaion by invesing an increasing amoun o money in RampD over ime
his invesmen has no kep pace wih overall economic growh in recen years Fiscal
auseriy policies ha began in 2010 have negaively impaced he ederal governmenrsquos
commimen o RampD and sequesraion is making an already dire siuaion worse
Tese policies have no only reduced our curren scienific oupu bu have also se he
sage or weaker economic growh in he uure Given he ederal governmenrsquos singu-lar role in supporing basic research paricularly he research conduced a American
colleges and universiies i is criical ha Congress reaffirm is commimen o scienific
discovery by repealing sequesraion and supporing new invesmens in RampD
Kwame Boadi is a Policy Analyst at the Center for American Progress
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 77
7 Center for American Progress | Sequestering American Innovation
Endnotes 1 Office of Management and Budget OMB Report to the
Congress on the Joint Committee Sequestration for Fiscal Year2013 (Executive Office of the President 2013) p 3 Table 1
2 Authorrsquos calculation is based on budget totals includingfederal budget authority classified as subfunctions 251(General Science and Basic Research) 252 (Space and
Research Technology) 552 (Health Research and Training)and the ldquoResearch Development Test and Evaluationrdquoaccounts within subfunction 051 (Department of Defense)RampD figures do not include funding for subfunction 053(Atomic Energy Defense Activities) due to the inability toisolate RampD-specific funding at the account level for theDepartment of Energyrsquos defense-related activities Historicaldata for FY 1977 through FY 2012 come from the O ffice ofManagement and Budget Projections for FY 2013 throughFY 2021 are based on data from the Congressional BudgetOffice Cut figures are derived by comparing a n estimate ofwhat the federal government would spend on RampD duringsequestration against what the federal government wouldspend on RampD if it had maintained the FY 2012 preseques-tration spending levels for RampD through FY 2021
3 American Association for the Advancement of ScienceldquoDefense Nondefense and Total RampD 1976ndash2014rdquo availableat httpwwwaaasorgspprdguihistshtml (last accessedNovember 2013)
4 Gordon Reikard ldquoStimulating Economic Growth Through Technological Advancerdquo AMSTATNEWS March 1 2011 avail-able at httpmagazineamstatorgblog20110301econ-growthmar11 Robert M Solow ldquoTechnical Change and theAggregate Production Functionrdquo The Review of Economicsand Statistics 39 (3) (1957) 312ndash320
5 Gautam Naik ldquoReport Touts Economic Impact of Gene Proj-ectrdquo The Wall Street Journal May 11 2011 available at httponlinewsjcomarticleSB10001424052748704681904576315253143162630html
6 Authorrsquos calculation is based on budget totals includingfederal budget authority classified as subfunctions 251(General Science and Basic Research) 252 (Space andResearch Technology) 552 (Health Research and Training)and the ldquoResearch Development Test and Evaluationrdquoaccounts within subfunction 051 (Department of Defense)RampD figures do not include funding for subfunction 053(Atomic Energy Defense Activities) due to the inability to
isolate RampD-specific funding at the account level for theDepartment of Energyrsquos defense-related activities Historicaldata for FY 1977 through FY 2012 come from the Office ofManagement and Budget Projections for FY 2013 throughFY 2021 are based on data from the Congressional BudgetOffice
7 National Science Foundation ldquoNational Patterns of RampDResources 2010ndash11 Data Updaterdquo available at httpwwwnsfgovstatisticsnsf13318contentcfmpub_id=4268ampid=2tab11 (last accessed November 2013)
8 Ibid
9 Ibid
10 Ibid
11 Ibid
12 Ibid
13 Ibid
14 Ibid
15 See endnote 7
16 Ibid
17 National Science Foundation ldquoNational Patterns of RampDResources 2010ndash11 Data Updaterdquo
18 Ibid
19 See endnote 7
20 Adam Hersh ldquoIn a World Without Austerityhelliprdquo Centerfor American Progress October 4 2013 available athttpwwwamericanprogressorgissueseconomy
news2013100476305in-a-world-without-austerity
21 Ibid
22 See endnote 7
23 American Association for the Advancement of Science ldquoRampDBudget and Policy Programrdquo available at httpwwwaaasorgspprdguihistshtml (last accessed December 2013)
24 See endnote 7
25 Ibid
26 Ibid
27 US Department of Education Fiscal Year 2014 BudgetSummary and Background Information (US Department ofEducation 2013) Appendix 1
28 Sen Tom Harkin ldquoUnder Threat Sequestrationrsquos Impacton Nondefense Jobs and Servicesrdquo (Washington SenateAppropriations Subcommittee on Labor Health andHuman Services Education and Related Agencies 2012)p 61 available at httpwwwharkinsenategovdocu-mentspdf500ff3554f9bapdf These figures represent anupdated estimation of the committeersquos original figures Thecommitteersquos calculations were based on a sequester cut of78 percent but the American Taxpayer Relief Act reducedthe FY 2013 sequester of nondefense programs to about 5percent Since the final sequester cut was approximately 64percent of the committeersquos original estimate the figures inthis report are 64 percent of the figures c alculated by thecommittee
29 Kwame Boadi ldquoSequestration Nation Making College LessAccessible for Our Studentsrdquo Center for Americ an ProgressJune 10 2013 available at httpwwwamericanprogressorgissueseconomynews2013061065806making-college-less-accessible-for-our-students
30 Ibid
31 Federal Student Aid ldquoFY 2014 Sequestration Changes to the Title IV Student Aid Programs (Updated October 25 2013)available at httpifapedgovdpclettersGEN1322html (last accessed December 2013)
32 Sam Stein ldquoSequestration Cuts to Research lsquoLike a SlowlyGrowing Cancerrsquordquo HuffPost Politics July 10 2013 available athttpwwwhuffingtonpostcom20130710sequestration-cuts-research_n_3576030html
33 See endnote 7
34 Ibid
35 Justin Hicks and Robert Atkinson ldquoEroding Our FoundationSequestration RampD Innovation and US Economic Growthrdquo(Washington The Information Technology and InnovationFoundation 2012) Ning Huang and Erwin Diewert ldquoEstima-
tion of RampD Depreciation Rates A Suggested Methodologyand Preliminary Applicationrdquo (Vancouver BC University ofBritish Columbia Department of Economics 2009)
36 Sarah Bacon ldquoMedical Research Cuts Have ImmediateHealth Effectsrdquo The Atlantic April 17 2013 available athttpwwwtheatlanticcomhealtharchive201304medi-cal-research-cuts-have-immediate-health-effects275045
37 The American Society for Biochemistry and MolecularBiology ldquoNondefense Discretionary Science 2013 SurveyUnlimited Potential Vanishing Opportunityrdquo (2013)
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 47
4 Center for American Progress | Sequestering American Innovation
Insead beginning in F Y 2011 Congress began aking acion o cu spending in he
name o defici reducion Tis defici reducion came primarily by way o he spending
reducions in he 2011 Budge Conrol Ac or BCA In addiion o he BCA reduced
appropriaion levels in he FY 2011 budge he fiscal cliff deal reached on January
1 2013 and he slowing growh in healh care coss have conribued o a dramaic
improvemen in he long-erm budge oulook Bu many o hese policies have come a
a significan economic cos as he economic growh he counry has experienced since2010 has no kep pace wih projecions rom ha ime A recen Cener or American
Progress analysis esimaes ha i he ederal governmen had no adoped auseriy
policies he US economy would currenly be growing a an average rae o 33 percen
per year as opposed o he 19 percen growh experienced since 201020 Such a growh
rae would have resuled in 25 million addiional new jobs since January 201121
Te yearly decrease in discreionary spending has had a significan negaive impac on
ederal RampD invesmen As a percenage o he overall economy ederal RampD spend-
ing decreased dramaically rom 099 percen in 2010 o 077 percen in 201322 In ac
according o an analysis by he American Associaion or he Advancemen o Scienceeven afer seting aside he 2009 simulus spending ederal RampD unding decreased by
almos 7 percen rom 2009 o 201223
What is sequestration doing and what will it do in the future
Lef unchecked sequesraion will grealy exacerbae he recen rend o decreasing ed-
eral RampD spending On op o he recen patern o underunding RampD sequesraion
urher reduced RampD spending by roughly $97
billion in 201324
I sequesraion were o remain inplace ederal RampD spending would be cu by $85
billion hrough FY 202125 As a percenage o GDP
ederally unded RampD would all o 062 percen
in FY 2021 he lowes level on record26 Under
his scenario hrough FY 2021 RampD unding or
he NIH would be cu by approximaely $20 bil-
lion or he DOE by approximaely $3 billion or
NASA by approximaely $11 billion and or he
NSF by approximaely $5 billion
In addiion o direc unding or RampD sequesra-
ion is also reducing our abiliy o prepare he nex
generaion o scieniss and researchers or careers
in RampD Among oher hings sequesraion is
reducing unding o he Deparmen o Educaion
by almos $25 billion in FY 201327 According o a
Senae Commitee repor rom 2012 Sae Grans
FIGURE 1
Federal RampD spending adjusted for inflation
$0
$50
$100
$150
$200
F e d e r a l R amp D s
p e n d i n g
i n b i l l i o n s o f 2 0 1 3 d o l l a r s
1 9 7 7
1 9 7 9
1 9 8 1
1 9 8 3
1 9 8 5
1 9 8 7
1 9 8 9
1 9 9 1
1 9 9 3
1 9 9 5
1 9 9 7
1 9 9 9
2 0 0 1
2 0 0 3
2 0 0 5
2 0 0 7
2 0 0 9
2 0 1 1
2 0 1 3
2 0 1 5
2 0 1 7
2 0 1 9
2 0 2 1
Nondefense
Defense
Total RampD
Annual pre-2010 growth rate
RampD shortfall
Source See endnote 6
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 57
5 Center for American Progress | Sequestering American Innovation
or Career and echnical Educaion which ldquo[pre-
pare] sudens or employmen in high-demand
fields such as healhcare renewable energy sci-
ence echnology engineering and mahemaicsrdquo
was slaed o be cu by abou $56 million in FY
2013 resuling in abou 700000 ewer sudens
served28 Addiionally Deparmen o Educaioncus reduced he Federal Work-Sudy Program by
$51 million in FY 201329 A he universiy level
sequesraion reduced spending on he Federal
Work-Sudy Program hundreds o housands o
sudens use o help pay or college by $51 million
his year alone30 And even hough Pell Grans991252
which provide unding o low-income undergradu-
aes991252were spared rom cus during he firs year
o sequesraion i is unclear i he program will be
spared beyond he 2013-14 school year31
While he shor-erm effecs o sequesraion
are real and significan he mos insidious and enduring effecs will be el over ime
because scienific discovery is cumulaive Jus as RampD invesmens oday will pay off
down he road missed opporuniies in RampD suppor will be negaively magnified in
he long run According o Seven Warren vice chancellor or research a he Universiy
o Kansas ldquo[Sequesraion] is like a slow growing cancerrdquo32 Like a slow-growing cancer
he long-erm consequences o sequesraion paricularly in he area o ederal inves-
men in RampD may no become readily apparen unil heir effecs are oo difficul o
reverse Tis means ha simply resoring he $97 billion in RampD cus in FY 2013 isno sufficien o pu RampD back on he righ rack in FY 2014 and in subsequen years
Addiional unding over and above he amouns ha have been cu mus be pu oward
RampD o make up or he ime los in FY 2013 and previous years
For he sake o comparison i in 2010 he ederal governmen had simply allowed RampD
spending o coninue o grow a he same rae ha i has hisorically hen in FY 2013
he ederal governmen would have spen $165 billion on RampD $41 billion more han
was spen in FY 2013 under sequesraion33 By he end o sequesraion in FY 2021 he
ederal governmen would be spending $128 billion in RampD a ull $80 billion less han
wha i would have spen under is hisorical growh rae34
Because he value o RampD capial depreciaes over ime wihou coninual replenish-
men o RampD invesmen uure innovaive capaciy decreases35 Hence he concern
among researchers across he counry is ha sequesraion will creae a ldquogeneraional
gaprdquo according o Elias Zerhouni ormer direcor o he Naional Insiues o Healh36
Moreover he lack o consisen ederal suppor or RampD could lead uure science and
FIGURE 2
Federal RampD spending as a share of GDP
06
08
10
12
07
09
11
1 9 7 7
1 9 7 9
1 9 8 1
1 9 8 3
1 9 8 5
1 9 8 7
1 9 8 9
1 9 9 1
1 9 9 3
1 9 9 5
1 9 9 7
1 9 9 9
2 0 0 1
2 0 0 3
2 0 0 5
2 0 0 7
2 0 0 9
2 0 1 1
2 0 1
3
2 0 1 5
2 0 1 7
2 0 1 9
2 0 2 1
P e r c e n t a g e o f G D P
Austerity (2010ndashpresent)
Pre-austerity (1977ndash2010)
Source See endnote 6
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 67
6 Center for American Progress | Sequestering American Innovation
echnology graduaes991252including hose who come rom abroad o obain a universiy
educaion991252o ake heir alens elsewhere o counries ha display more o a com-
mimen o scienific innovaion Almos one in five respondens o a recen American
Sociey or Biochemisry and Molecular Biology survey indicaed ha hey are consider-
ing moving heir research abroad37
Conclusion
Due o he echnological innovaion ha i produces scienific RampD is one o he
main engines powering uure economic growh Alhough he ederal governmen has
suppored innovaion by invesing an increasing amoun o money in RampD over ime
his invesmen has no kep pace wih overall economic growh in recen years Fiscal
auseriy policies ha began in 2010 have negaively impaced he ederal governmenrsquos
commimen o RampD and sequesraion is making an already dire siuaion worse
Tese policies have no only reduced our curren scienific oupu bu have also se he
sage or weaker economic growh in he uure Given he ederal governmenrsquos singu-lar role in supporing basic research paricularly he research conduced a American
colleges and universiies i is criical ha Congress reaffirm is commimen o scienific
discovery by repealing sequesraion and supporing new invesmens in RampD
Kwame Boadi is a Policy Analyst at the Center for American Progress
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 77
7 Center for American Progress | Sequestering American Innovation
Endnotes 1 Office of Management and Budget OMB Report to the
Congress on the Joint Committee Sequestration for Fiscal Year2013 (Executive Office of the President 2013) p 3 Table 1
2 Authorrsquos calculation is based on budget totals includingfederal budget authority classified as subfunctions 251(General Science and Basic Research) 252 (Space and
Research Technology) 552 (Health Research and Training)and the ldquoResearch Development Test and Evaluationrdquoaccounts within subfunction 051 (Department of Defense)RampD figures do not include funding for subfunction 053(Atomic Energy Defense Activities) due to the inability toisolate RampD-specific funding at the account level for theDepartment of Energyrsquos defense-related activities Historicaldata for FY 1977 through FY 2012 come from the O ffice ofManagement and Budget Projections for FY 2013 throughFY 2021 are based on data from the Congressional BudgetOffice Cut figures are derived by comparing a n estimate ofwhat the federal government would spend on RampD duringsequestration against what the federal government wouldspend on RampD if it had maintained the FY 2012 preseques-tration spending levels for RampD through FY 2021
3 American Association for the Advancement of ScienceldquoDefense Nondefense and Total RampD 1976ndash2014rdquo availableat httpwwwaaasorgspprdguihistshtml (last accessedNovember 2013)
4 Gordon Reikard ldquoStimulating Economic Growth Through Technological Advancerdquo AMSTATNEWS March 1 2011 avail-able at httpmagazineamstatorgblog20110301econ-growthmar11 Robert M Solow ldquoTechnical Change and theAggregate Production Functionrdquo The Review of Economicsand Statistics 39 (3) (1957) 312ndash320
5 Gautam Naik ldquoReport Touts Economic Impact of Gene Proj-ectrdquo The Wall Street Journal May 11 2011 available at httponlinewsjcomarticleSB10001424052748704681904576315253143162630html
6 Authorrsquos calculation is based on budget totals includingfederal budget authority classified as subfunctions 251(General Science and Basic Research) 252 (Space andResearch Technology) 552 (Health Research and Training)and the ldquoResearch Development Test and Evaluationrdquoaccounts within subfunction 051 (Department of Defense)RampD figures do not include funding for subfunction 053(Atomic Energy Defense Activities) due to the inability to
isolate RampD-specific funding at the account level for theDepartment of Energyrsquos defense-related activities Historicaldata for FY 1977 through FY 2012 come from the Office ofManagement and Budget Projections for FY 2013 throughFY 2021 are based on data from the Congressional BudgetOffice
7 National Science Foundation ldquoNational Patterns of RampDResources 2010ndash11 Data Updaterdquo available at httpwwwnsfgovstatisticsnsf13318contentcfmpub_id=4268ampid=2tab11 (last accessed November 2013)
8 Ibid
9 Ibid
10 Ibid
11 Ibid
12 Ibid
13 Ibid
14 Ibid
15 See endnote 7
16 Ibid
17 National Science Foundation ldquoNational Patterns of RampDResources 2010ndash11 Data Updaterdquo
18 Ibid
19 See endnote 7
20 Adam Hersh ldquoIn a World Without Austerityhelliprdquo Centerfor American Progress October 4 2013 available athttpwwwamericanprogressorgissueseconomy
news2013100476305in-a-world-without-austerity
21 Ibid
22 See endnote 7
23 American Association for the Advancement of Science ldquoRampDBudget and Policy Programrdquo available at httpwwwaaasorgspprdguihistshtml (last accessed December 2013)
24 See endnote 7
25 Ibid
26 Ibid
27 US Department of Education Fiscal Year 2014 BudgetSummary and Background Information (US Department ofEducation 2013) Appendix 1
28 Sen Tom Harkin ldquoUnder Threat Sequestrationrsquos Impacton Nondefense Jobs and Servicesrdquo (Washington SenateAppropriations Subcommittee on Labor Health andHuman Services Education and Related Agencies 2012)p 61 available at httpwwwharkinsenategovdocu-mentspdf500ff3554f9bapdf These figures represent anupdated estimation of the committeersquos original figures Thecommitteersquos calculations were based on a sequester cut of78 percent but the American Taxpayer Relief Act reducedthe FY 2013 sequester of nondefense programs to about 5percent Since the final sequester cut was approximately 64percent of the committeersquos original estimate the figures inthis report are 64 percent of the figures c alculated by thecommittee
29 Kwame Boadi ldquoSequestration Nation Making College LessAccessible for Our Studentsrdquo Center for Americ an ProgressJune 10 2013 available at httpwwwamericanprogressorgissueseconomynews2013061065806making-college-less-accessible-for-our-students
30 Ibid
31 Federal Student Aid ldquoFY 2014 Sequestration Changes to the Title IV Student Aid Programs (Updated October 25 2013)available at httpifapedgovdpclettersGEN1322html (last accessed December 2013)
32 Sam Stein ldquoSequestration Cuts to Research lsquoLike a SlowlyGrowing Cancerrsquordquo HuffPost Politics July 10 2013 available athttpwwwhuffingtonpostcom20130710sequestration-cuts-research_n_3576030html
33 See endnote 7
34 Ibid
35 Justin Hicks and Robert Atkinson ldquoEroding Our FoundationSequestration RampD Innovation and US Economic Growthrdquo(Washington The Information Technology and InnovationFoundation 2012) Ning Huang and Erwin Diewert ldquoEstima-
tion of RampD Depreciation Rates A Suggested Methodologyand Preliminary Applicationrdquo (Vancouver BC University ofBritish Columbia Department of Economics 2009)
36 Sarah Bacon ldquoMedical Research Cuts Have ImmediateHealth Effectsrdquo The Atlantic April 17 2013 available athttpwwwtheatlanticcomhealtharchive201304medi-cal-research-cuts-have-immediate-health-effects275045
37 The American Society for Biochemistry and MolecularBiology ldquoNondefense Discretionary Science 2013 SurveyUnlimited Potential Vanishing Opportunityrdquo (2013)
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 57
5 Center for American Progress | Sequestering American Innovation
or Career and echnical Educaion which ldquo[pre-
pare] sudens or employmen in high-demand
fields such as healhcare renewable energy sci-
ence echnology engineering and mahemaicsrdquo
was slaed o be cu by abou $56 million in FY
2013 resuling in abou 700000 ewer sudens
served28 Addiionally Deparmen o Educaioncus reduced he Federal Work-Sudy Program by
$51 million in FY 201329 A he universiy level
sequesraion reduced spending on he Federal
Work-Sudy Program hundreds o housands o
sudens use o help pay or college by $51 million
his year alone30 And even hough Pell Grans991252
which provide unding o low-income undergradu-
aes991252were spared rom cus during he firs year
o sequesraion i is unclear i he program will be
spared beyond he 2013-14 school year31
While he shor-erm effecs o sequesraion
are real and significan he mos insidious and enduring effecs will be el over ime
because scienific discovery is cumulaive Jus as RampD invesmens oday will pay off
down he road missed opporuniies in RampD suppor will be negaively magnified in
he long run According o Seven Warren vice chancellor or research a he Universiy
o Kansas ldquo[Sequesraion] is like a slow growing cancerrdquo32 Like a slow-growing cancer
he long-erm consequences o sequesraion paricularly in he area o ederal inves-
men in RampD may no become readily apparen unil heir effecs are oo difficul o
reverse Tis means ha simply resoring he $97 billion in RampD cus in FY 2013 isno sufficien o pu RampD back on he righ rack in FY 2014 and in subsequen years
Addiional unding over and above he amouns ha have been cu mus be pu oward
RampD o make up or he ime los in FY 2013 and previous years
For he sake o comparison i in 2010 he ederal governmen had simply allowed RampD
spending o coninue o grow a he same rae ha i has hisorically hen in FY 2013
he ederal governmen would have spen $165 billion on RampD $41 billion more han
was spen in FY 2013 under sequesraion33 By he end o sequesraion in FY 2021 he
ederal governmen would be spending $128 billion in RampD a ull $80 billion less han
wha i would have spen under is hisorical growh rae34
Because he value o RampD capial depreciaes over ime wihou coninual replenish-
men o RampD invesmen uure innovaive capaciy decreases35 Hence he concern
among researchers across he counry is ha sequesraion will creae a ldquogeneraional
gaprdquo according o Elias Zerhouni ormer direcor o he Naional Insiues o Healh36
Moreover he lack o consisen ederal suppor or RampD could lead uure science and
FIGURE 2
Federal RampD spending as a share of GDP
06
08
10
12
07
09
11
1 9 7 7
1 9 7 9
1 9 8 1
1 9 8 3
1 9 8 5
1 9 8 7
1 9 8 9
1 9 9 1
1 9 9 3
1 9 9 5
1 9 9 7
1 9 9 9
2 0 0 1
2 0 0 3
2 0 0 5
2 0 0 7
2 0 0 9
2 0 1 1
2 0 1
3
2 0 1 5
2 0 1 7
2 0 1 9
2 0 2 1
P e r c e n t a g e o f G D P
Austerity (2010ndashpresent)
Pre-austerity (1977ndash2010)
Source See endnote 6
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 67
6 Center for American Progress | Sequestering American Innovation
echnology graduaes991252including hose who come rom abroad o obain a universiy
educaion991252o ake heir alens elsewhere o counries ha display more o a com-
mimen o scienific innovaion Almos one in five respondens o a recen American
Sociey or Biochemisry and Molecular Biology survey indicaed ha hey are consider-
ing moving heir research abroad37
Conclusion
Due o he echnological innovaion ha i produces scienific RampD is one o he
main engines powering uure economic growh Alhough he ederal governmen has
suppored innovaion by invesing an increasing amoun o money in RampD over ime
his invesmen has no kep pace wih overall economic growh in recen years Fiscal
auseriy policies ha began in 2010 have negaively impaced he ederal governmenrsquos
commimen o RampD and sequesraion is making an already dire siuaion worse
Tese policies have no only reduced our curren scienific oupu bu have also se he
sage or weaker economic growh in he uure Given he ederal governmenrsquos singu-lar role in supporing basic research paricularly he research conduced a American
colleges and universiies i is criical ha Congress reaffirm is commimen o scienific
discovery by repealing sequesraion and supporing new invesmens in RampD
Kwame Boadi is a Policy Analyst at the Center for American Progress
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 77
7 Center for American Progress | Sequestering American Innovation
Endnotes 1 Office of Management and Budget OMB Report to the
Congress on the Joint Committee Sequestration for Fiscal Year2013 (Executive Office of the President 2013) p 3 Table 1
2 Authorrsquos calculation is based on budget totals includingfederal budget authority classified as subfunctions 251(General Science and Basic Research) 252 (Space and
Research Technology) 552 (Health Research and Training)and the ldquoResearch Development Test and Evaluationrdquoaccounts within subfunction 051 (Department of Defense)RampD figures do not include funding for subfunction 053(Atomic Energy Defense Activities) due to the inability toisolate RampD-specific funding at the account level for theDepartment of Energyrsquos defense-related activities Historicaldata for FY 1977 through FY 2012 come from the O ffice ofManagement and Budget Projections for FY 2013 throughFY 2021 are based on data from the Congressional BudgetOffice Cut figures are derived by comparing a n estimate ofwhat the federal government would spend on RampD duringsequestration against what the federal government wouldspend on RampD if it had maintained the FY 2012 preseques-tration spending levels for RampD through FY 2021
3 American Association for the Advancement of ScienceldquoDefense Nondefense and Total RampD 1976ndash2014rdquo availableat httpwwwaaasorgspprdguihistshtml (last accessedNovember 2013)
4 Gordon Reikard ldquoStimulating Economic Growth Through Technological Advancerdquo AMSTATNEWS March 1 2011 avail-able at httpmagazineamstatorgblog20110301econ-growthmar11 Robert M Solow ldquoTechnical Change and theAggregate Production Functionrdquo The Review of Economicsand Statistics 39 (3) (1957) 312ndash320
5 Gautam Naik ldquoReport Touts Economic Impact of Gene Proj-ectrdquo The Wall Street Journal May 11 2011 available at httponlinewsjcomarticleSB10001424052748704681904576315253143162630html
6 Authorrsquos calculation is based on budget totals includingfederal budget authority classified as subfunctions 251(General Science and Basic Research) 252 (Space andResearch Technology) 552 (Health Research and Training)and the ldquoResearch Development Test and Evaluationrdquoaccounts within subfunction 051 (Department of Defense)RampD figures do not include funding for subfunction 053(Atomic Energy Defense Activities) due to the inability to
isolate RampD-specific funding at the account level for theDepartment of Energyrsquos defense-related activities Historicaldata for FY 1977 through FY 2012 come from the Office ofManagement and Budget Projections for FY 2013 throughFY 2021 are based on data from the Congressional BudgetOffice
7 National Science Foundation ldquoNational Patterns of RampDResources 2010ndash11 Data Updaterdquo available at httpwwwnsfgovstatisticsnsf13318contentcfmpub_id=4268ampid=2tab11 (last accessed November 2013)
8 Ibid
9 Ibid
10 Ibid
11 Ibid
12 Ibid
13 Ibid
14 Ibid
15 See endnote 7
16 Ibid
17 National Science Foundation ldquoNational Patterns of RampDResources 2010ndash11 Data Updaterdquo
18 Ibid
19 See endnote 7
20 Adam Hersh ldquoIn a World Without Austerityhelliprdquo Centerfor American Progress October 4 2013 available athttpwwwamericanprogressorgissueseconomy
news2013100476305in-a-world-without-austerity
21 Ibid
22 See endnote 7
23 American Association for the Advancement of Science ldquoRampDBudget and Policy Programrdquo available at httpwwwaaasorgspprdguihistshtml (last accessed December 2013)
24 See endnote 7
25 Ibid
26 Ibid
27 US Department of Education Fiscal Year 2014 BudgetSummary and Background Information (US Department ofEducation 2013) Appendix 1
28 Sen Tom Harkin ldquoUnder Threat Sequestrationrsquos Impacton Nondefense Jobs and Servicesrdquo (Washington SenateAppropriations Subcommittee on Labor Health andHuman Services Education and Related Agencies 2012)p 61 available at httpwwwharkinsenategovdocu-mentspdf500ff3554f9bapdf These figures represent anupdated estimation of the committeersquos original figures Thecommitteersquos calculations were based on a sequester cut of78 percent but the American Taxpayer Relief Act reducedthe FY 2013 sequester of nondefense programs to about 5percent Since the final sequester cut was approximately 64percent of the committeersquos original estimate the figures inthis report are 64 percent of the figures c alculated by thecommittee
29 Kwame Boadi ldquoSequestration Nation Making College LessAccessible for Our Studentsrdquo Center for Americ an ProgressJune 10 2013 available at httpwwwamericanprogressorgissueseconomynews2013061065806making-college-less-accessible-for-our-students
30 Ibid
31 Federal Student Aid ldquoFY 2014 Sequestration Changes to the Title IV Student Aid Programs (Updated October 25 2013)available at httpifapedgovdpclettersGEN1322html (last accessed December 2013)
32 Sam Stein ldquoSequestration Cuts to Research lsquoLike a SlowlyGrowing Cancerrsquordquo HuffPost Politics July 10 2013 available athttpwwwhuffingtonpostcom20130710sequestration-cuts-research_n_3576030html
33 See endnote 7
34 Ibid
35 Justin Hicks and Robert Atkinson ldquoEroding Our FoundationSequestration RampD Innovation and US Economic Growthrdquo(Washington The Information Technology and InnovationFoundation 2012) Ning Huang and Erwin Diewert ldquoEstima-
tion of RampD Depreciation Rates A Suggested Methodologyand Preliminary Applicationrdquo (Vancouver BC University ofBritish Columbia Department of Economics 2009)
36 Sarah Bacon ldquoMedical Research Cuts Have ImmediateHealth Effectsrdquo The Atlantic April 17 2013 available athttpwwwtheatlanticcomhealtharchive201304medi-cal-research-cuts-have-immediate-health-effects275045
37 The American Society for Biochemistry and MolecularBiology ldquoNondefense Discretionary Science 2013 SurveyUnlimited Potential Vanishing Opportunityrdquo (2013)
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 67
6 Center for American Progress | Sequestering American Innovation
echnology graduaes991252including hose who come rom abroad o obain a universiy
educaion991252o ake heir alens elsewhere o counries ha display more o a com-
mimen o scienific innovaion Almos one in five respondens o a recen American
Sociey or Biochemisry and Molecular Biology survey indicaed ha hey are consider-
ing moving heir research abroad37
Conclusion
Due o he echnological innovaion ha i produces scienific RampD is one o he
main engines powering uure economic growh Alhough he ederal governmen has
suppored innovaion by invesing an increasing amoun o money in RampD over ime
his invesmen has no kep pace wih overall economic growh in recen years Fiscal
auseriy policies ha began in 2010 have negaively impaced he ederal governmenrsquos
commimen o RampD and sequesraion is making an already dire siuaion worse
Tese policies have no only reduced our curren scienific oupu bu have also se he
sage or weaker economic growh in he uure Given he ederal governmenrsquos singu-lar role in supporing basic research paricularly he research conduced a American
colleges and universiies i is criical ha Congress reaffirm is commimen o scienific
discovery by repealing sequesraion and supporing new invesmens in RampD
Kwame Boadi is a Policy Analyst at the Center for American Progress
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 77
7 Center for American Progress | Sequestering American Innovation
Endnotes 1 Office of Management and Budget OMB Report to the
Congress on the Joint Committee Sequestration for Fiscal Year2013 (Executive Office of the President 2013) p 3 Table 1
2 Authorrsquos calculation is based on budget totals includingfederal budget authority classified as subfunctions 251(General Science and Basic Research) 252 (Space and
Research Technology) 552 (Health Research and Training)and the ldquoResearch Development Test and Evaluationrdquoaccounts within subfunction 051 (Department of Defense)RampD figures do not include funding for subfunction 053(Atomic Energy Defense Activities) due to the inability toisolate RampD-specific funding at the account level for theDepartment of Energyrsquos defense-related activities Historicaldata for FY 1977 through FY 2012 come from the O ffice ofManagement and Budget Projections for FY 2013 throughFY 2021 are based on data from the Congressional BudgetOffice Cut figures are derived by comparing a n estimate ofwhat the federal government would spend on RampD duringsequestration against what the federal government wouldspend on RampD if it had maintained the FY 2012 preseques-tration spending levels for RampD through FY 2021
3 American Association for the Advancement of ScienceldquoDefense Nondefense and Total RampD 1976ndash2014rdquo availableat httpwwwaaasorgspprdguihistshtml (last accessedNovember 2013)
4 Gordon Reikard ldquoStimulating Economic Growth Through Technological Advancerdquo AMSTATNEWS March 1 2011 avail-able at httpmagazineamstatorgblog20110301econ-growthmar11 Robert M Solow ldquoTechnical Change and theAggregate Production Functionrdquo The Review of Economicsand Statistics 39 (3) (1957) 312ndash320
5 Gautam Naik ldquoReport Touts Economic Impact of Gene Proj-ectrdquo The Wall Street Journal May 11 2011 available at httponlinewsjcomarticleSB10001424052748704681904576315253143162630html
6 Authorrsquos calculation is based on budget totals includingfederal budget authority classified as subfunctions 251(General Science and Basic Research) 252 (Space andResearch Technology) 552 (Health Research and Training)and the ldquoResearch Development Test and Evaluationrdquoaccounts within subfunction 051 (Department of Defense)RampD figures do not include funding for subfunction 053(Atomic Energy Defense Activities) due to the inability to
isolate RampD-specific funding at the account level for theDepartment of Energyrsquos defense-related activities Historicaldata for FY 1977 through FY 2012 come from the Office ofManagement and Budget Projections for FY 2013 throughFY 2021 are based on data from the Congressional BudgetOffice
7 National Science Foundation ldquoNational Patterns of RampDResources 2010ndash11 Data Updaterdquo available at httpwwwnsfgovstatisticsnsf13318contentcfmpub_id=4268ampid=2tab11 (last accessed November 2013)
8 Ibid
9 Ibid
10 Ibid
11 Ibid
12 Ibid
13 Ibid
14 Ibid
15 See endnote 7
16 Ibid
17 National Science Foundation ldquoNational Patterns of RampDResources 2010ndash11 Data Updaterdquo
18 Ibid
19 See endnote 7
20 Adam Hersh ldquoIn a World Without Austerityhelliprdquo Centerfor American Progress October 4 2013 available athttpwwwamericanprogressorgissueseconomy
news2013100476305in-a-world-without-austerity
21 Ibid
22 See endnote 7
23 American Association for the Advancement of Science ldquoRampDBudget and Policy Programrdquo available at httpwwwaaasorgspprdguihistshtml (last accessed December 2013)
24 See endnote 7
25 Ibid
26 Ibid
27 US Department of Education Fiscal Year 2014 BudgetSummary and Background Information (US Department ofEducation 2013) Appendix 1
28 Sen Tom Harkin ldquoUnder Threat Sequestrationrsquos Impacton Nondefense Jobs and Servicesrdquo (Washington SenateAppropriations Subcommittee on Labor Health andHuman Services Education and Related Agencies 2012)p 61 available at httpwwwharkinsenategovdocu-mentspdf500ff3554f9bapdf These figures represent anupdated estimation of the committeersquos original figures Thecommitteersquos calculations were based on a sequester cut of78 percent but the American Taxpayer Relief Act reducedthe FY 2013 sequester of nondefense programs to about 5percent Since the final sequester cut was approximately 64percent of the committeersquos original estimate the figures inthis report are 64 percent of the figures c alculated by thecommittee
29 Kwame Boadi ldquoSequestration Nation Making College LessAccessible for Our Studentsrdquo Center for Americ an ProgressJune 10 2013 available at httpwwwamericanprogressorgissueseconomynews2013061065806making-college-less-accessible-for-our-students
30 Ibid
31 Federal Student Aid ldquoFY 2014 Sequestration Changes to the Title IV Student Aid Programs (Updated October 25 2013)available at httpifapedgovdpclettersGEN1322html (last accessed December 2013)
32 Sam Stein ldquoSequestration Cuts to Research lsquoLike a SlowlyGrowing Cancerrsquordquo HuffPost Politics July 10 2013 available athttpwwwhuffingtonpostcom20130710sequestration-cuts-research_n_3576030html
33 See endnote 7
34 Ibid
35 Justin Hicks and Robert Atkinson ldquoEroding Our FoundationSequestration RampD Innovation and US Economic Growthrdquo(Washington The Information Technology and InnovationFoundation 2012) Ning Huang and Erwin Diewert ldquoEstima-
tion of RampD Depreciation Rates A Suggested Methodologyand Preliminary Applicationrdquo (Vancouver BC University ofBritish Columbia Department of Economics 2009)
36 Sarah Bacon ldquoMedical Research Cuts Have ImmediateHealth Effectsrdquo The Atlantic April 17 2013 available athttpwwwtheatlanticcomhealtharchive201304medi-cal-research-cuts-have-immediate-health-effects275045
37 The American Society for Biochemistry and MolecularBiology ldquoNondefense Discretionary Science 2013 SurveyUnlimited Potential Vanishing Opportunityrdquo (2013)
8132019 Sequestering American Innovation
httpslidepdfcomreaderfullsequestering-american-innovation 77
7 Center for American Progress | Sequestering American Innovation
Endnotes 1 Office of Management and Budget OMB Report to the
Congress on the Joint Committee Sequestration for Fiscal Year2013 (Executive Office of the President 2013) p 3 Table 1
2 Authorrsquos calculation is based on budget totals includingfederal budget authority classified as subfunctions 251(General Science and Basic Research) 252 (Space and
Research Technology) 552 (Health Research and Training)and the ldquoResearch Development Test and Evaluationrdquoaccounts within subfunction 051 (Department of Defense)RampD figures do not include funding for subfunction 053(Atomic Energy Defense Activities) due to the inability toisolate RampD-specific funding at the account level for theDepartment of Energyrsquos defense-related activities Historicaldata for FY 1977 through FY 2012 come from the O ffice ofManagement and Budget Projections for FY 2013 throughFY 2021 are based on data from the Congressional BudgetOffice Cut figures are derived by comparing a n estimate ofwhat the federal government would spend on RampD duringsequestration against what the federal government wouldspend on RampD if it had maintained the FY 2012 preseques-tration spending levels for RampD through FY 2021
3 American Association for the Advancement of ScienceldquoDefense Nondefense and Total RampD 1976ndash2014rdquo availableat httpwwwaaasorgspprdguihistshtml (last accessedNovember 2013)
4 Gordon Reikard ldquoStimulating Economic Growth Through Technological Advancerdquo AMSTATNEWS March 1 2011 avail-able at httpmagazineamstatorgblog20110301econ-growthmar11 Robert M Solow ldquoTechnical Change and theAggregate Production Functionrdquo The Review of Economicsand Statistics 39 (3) (1957) 312ndash320
5 Gautam Naik ldquoReport Touts Economic Impact of Gene Proj-ectrdquo The Wall Street Journal May 11 2011 available at httponlinewsjcomarticleSB10001424052748704681904576315253143162630html
6 Authorrsquos calculation is based on budget totals includingfederal budget authority classified as subfunctions 251(General Science and Basic Research) 252 (Space andResearch Technology) 552 (Health Research and Training)and the ldquoResearch Development Test and Evaluationrdquoaccounts within subfunction 051 (Department of Defense)RampD figures do not include funding for subfunction 053(Atomic Energy Defense Activities) due to the inability to
isolate RampD-specific funding at the account level for theDepartment of Energyrsquos defense-related activities Historicaldata for FY 1977 through FY 2012 come from the Office ofManagement and Budget Projections for FY 2013 throughFY 2021 are based on data from the Congressional BudgetOffice
7 National Science Foundation ldquoNational Patterns of RampDResources 2010ndash11 Data Updaterdquo available at httpwwwnsfgovstatisticsnsf13318contentcfmpub_id=4268ampid=2tab11 (last accessed November 2013)
8 Ibid
9 Ibid
10 Ibid
11 Ibid
12 Ibid
13 Ibid
14 Ibid
15 See endnote 7
16 Ibid
17 National Science Foundation ldquoNational Patterns of RampDResources 2010ndash11 Data Updaterdquo
18 Ibid
19 See endnote 7
20 Adam Hersh ldquoIn a World Without Austerityhelliprdquo Centerfor American Progress October 4 2013 available athttpwwwamericanprogressorgissueseconomy
news2013100476305in-a-world-without-austerity
21 Ibid
22 See endnote 7
23 American Association for the Advancement of Science ldquoRampDBudget and Policy Programrdquo available at httpwwwaaasorgspprdguihistshtml (last accessed December 2013)
24 See endnote 7
25 Ibid
26 Ibid
27 US Department of Education Fiscal Year 2014 BudgetSummary and Background Information (US Department ofEducation 2013) Appendix 1
28 Sen Tom Harkin ldquoUnder Threat Sequestrationrsquos Impacton Nondefense Jobs and Servicesrdquo (Washington SenateAppropriations Subcommittee on Labor Health andHuman Services Education and Related Agencies 2012)p 61 available at httpwwwharkinsenategovdocu-mentspdf500ff3554f9bapdf These figures represent anupdated estimation of the committeersquos original figures Thecommitteersquos calculations were based on a sequester cut of78 percent but the American Taxpayer Relief Act reducedthe FY 2013 sequester of nondefense programs to about 5percent Since the final sequester cut was approximately 64percent of the committeersquos original estimate the figures inthis report are 64 percent of the figures c alculated by thecommittee
29 Kwame Boadi ldquoSequestration Nation Making College LessAccessible for Our Studentsrdquo Center for Americ an ProgressJune 10 2013 available at httpwwwamericanprogressorgissueseconomynews2013061065806making-college-less-accessible-for-our-students
30 Ibid
31 Federal Student Aid ldquoFY 2014 Sequestration Changes to the Title IV Student Aid Programs (Updated October 25 2013)available at httpifapedgovdpclettersGEN1322html (last accessed December 2013)
32 Sam Stein ldquoSequestration Cuts to Research lsquoLike a SlowlyGrowing Cancerrsquordquo HuffPost Politics July 10 2013 available athttpwwwhuffingtonpostcom20130710sequestration-cuts-research_n_3576030html
33 See endnote 7
34 Ibid
35 Justin Hicks and Robert Atkinson ldquoEroding Our FoundationSequestration RampD Innovation and US Economic Growthrdquo(Washington The Information Technology and InnovationFoundation 2012) Ning Huang and Erwin Diewert ldquoEstima-
tion of RampD Depreciation Rates A Suggested Methodologyand Preliminary Applicationrdquo (Vancouver BC University ofBritish Columbia Department of Economics 2009)
36 Sarah Bacon ldquoMedical Research Cuts Have ImmediateHealth Effectsrdquo The Atlantic April 17 2013 available athttpwwwtheatlanticcomhealtharchive201304medi-cal-research-cuts-have-immediate-health-effects275045
37 The American Society for Biochemistry and MolecularBiology ldquoNondefense Discretionary Science 2013 SurveyUnlimited Potential Vanishing Opportunityrdquo (2013)