Towards a Solution for Broadening the Geography of NSF Funding

By June 15, 2022

Congressional negotiations over the massive bipartisan innovation bill have stumbled over a controversial proposal to expand the geographic footprint of National Science Foundation (NSF) funding. That proposal, in the Senate-passed U.S. Innovation and Competition Act (USICA), mandates that 20% of NSF’s budget be directed to a special program to help institutions in the many states that receive relatively few NSF dollars.

Such a mandate would represent a dramatic expansion of the Established Program to Stimulate Competitive Research (EPSCoR), which currently receives less than 3% of NSF’s budget. Major EPSCoR expansion is popular among legislators who would like to see the research institutions they represent become more competitive within the NSF portfolio. Some legislators have said their support of the overall innovation package is contingent on such expansion.

But the proposed 20% set-aside for EPSCoR is being met with fierce opposition on Capitol Hill. 96 other legislators recently co-authored a letter warning, “Arbitrarily walling off a sizable percentage of a science agency’s budget from a sizable majority of the country’s research institutions would fundamentally reduce the entire nation’s scientific capacity and damage the research profiles of existing institutions.”

Both proponents and opponents of the 20% set-aside make good points. Those in favor want to see more equitable distribution of federal research dollars, while those against are concerned that the mandatory set-aside is too massive and blunt an instrument for achieving that goal. Fortunately, we believe compromise is achievable—and well worth pursuing. Here’s how.

 

What is EPSCoR?

First, some quick background on the program at the heart of the controversy: ESPCoR. The program was established in 1979 with the admirable goal of broadening the geographic distribution of NSF research dollars, which even then were disproportionately concentrated in a handful of states.

EPSCoR provides eligible jurisdictions with targeted support for research infrastructure, development activities like workshops, and co-funding for project proposals submitted to other parts of NSF. A jurisdiction is eligible to participate in EPSCoR if its most recent five-year level of total NSF funding is equal to or less than 0.75% of the total NSF budget (excluding EPSCoR funding and NSF funding to other federal agencies). Currently, 25 states plus Puerto Rico, Guam, and the U.S. Virgin Islands qualify for EPSCoR. Yet the non-EPSCoR states still accounted for nearly 90% of NSF awards in FY 2021.
 

Why is expansion controversial?

As mentioned above, the Senate-passed USICA (S. 1260) would require NSF to devote 20% of its budget to EPSCoR (including research consortia led by EPSCoR institutions). The problem is that EPSCoR received only 2.4% of NSF’s FY 2022 appropriation. This means that to achieve the 20% mandate without cutting non-EPSCoR funding, Congress would have to approve nearly $2 billion in new appropriations for NSF in FY 2023, representing a 22% year-over-year increase, devoted entirely to EPSCoR. This is, to be blunt, wildly unlikely.

On the other hand, achieving a 20% budget share for EPSCoR under a more realistic FY 2023 appropriation for NSF would require cutting funding for non-EPSCoR programs on the order of 15%: a cataclysmic proposition for the research community.

Neither pathway for a 20% EPSCoR set-aside seems plausible. Still, key legislators have said that the 20% target is a must-have. So what can be done?

 

A path forward

We think a workable compromise is possible. The following three revisions to the Senate-proposed set-aside that everyone might accept:

  1. Specify that the 20% mandate applies to institutions in EPSCoR states rather than the EPSCoR program itself. While specific funding for the EPSCoR program accounts for less than 3% of the total NSF budget, institutions in current EPSCoR states actually receive about 13% of NSF research dollars. In other words, a substantial portion of NSF funding is allocated to EPSCoR institutions through the agency’s normal competitive-award opportunities. Given this fact, there’s a clear case to be made for focusing the 20% ramp-up on EPSCoR-eligible institutions rather than the EPSCoR program.

  2. Specify that the mandate only applies to extramural funding, not to agency operations and administrative appropriations. This is simply good government. If EPSCoR funding is tied to administrative appropriations, it may create an incentive to bloat the administrative line items. Further, if the mandate is applied to the entirety of the NSF budget and administrative costs must increase for other reasons (for instance, to cover future capital investments at NSF headquarters), then NSF may be forced to “balance the books” by cutting non-EPSCoR extramural funding to maintain the 20% ESPCoR share.

  3. Establish a multi-year trajectory to achieve the 20% target. As mentioned above, a major year-over-year increase in the proportion of NSF funding directed to either EPSCoR or EPSCoR-eligible institutions could cripple other essential NSF programs from which funding would have to be pulled. Managing the deluge of new dollars could also prove a challenge for EPSCoR-eligible institutions. Phasing in the 20% target over, say, five years would (i) enable federal appropriators to navigate pathways for increasing EPSCoR funding while avoiding drastic cuts elsewhere at NSF, and (ii) give EPSCoR-eligible institutions time to build out the capacities needed to maximize return on new research investments.

 

Crunching the numbers

To illustrate what this proposed compromise could mean fiscally, let’s say Congress mandates that NSF funding for EPSCoR-eligible institutions rises from its current ~13% share of total research dollars to 20% in five years. To achieve this target, the share of NSF funding received by EPSCoR-eligible states would have to rise by approximately 9% per year for five years.

Under this scenario, if NSF achieves 3% annual increases in appropriations (which is close to what it’s done since the FY 2013 “sequestration” year), then we’d see about 13% annual growth in NSF research dollars funneled to EPSCoR states due to the escalating set-aside. NSF research dollars funneled to non-EPSCoR states would increase by about 1% annually over the same time period. By the end of the five-year period, EPSCoR-eligible institutions would have seen a more than 80% increase in funding.

Annual increases in NSF appropriations of 2% would be enough to achieve the 20% set-aside without cutting funding for institutions in non-EPSCoR states, but wouldn’t allow any growth in funding for those institutions either. In other words, the appropriations increases would have to be entirely directed to the rising EPSCoR set-aside.

Finally, annual increases in NSF appropriations of 5% would be enough to achieve the 20% set-aside for EPSCoR-eligible institutions while also enabling non-EPSCoR-eligible institutions to enjoy continued 3% annual increases in funding growth.
 

The next step

U.S. strength in innovation is predicated on the scientific contributions from all corners of the nation. There is hence a clear and compelling reason to ensure that all U.S. research institutions have the resources they need to succeed, including those that have historically received a lower share of support from federal agencies.

he bipartisan innovation package offers a chance to achieve this, but it must be done carefully. The three-pronged compromise on EPSCoR outlined above is a prudent way to thread the needle. It should also be supported by sustained, robust increases in NSF funding as a whole. Congress should therefore couple this compromise with an explicit, bipartisan commitment to support long-term appropriations growth for NSF—because such growth would benefit institutions in every state.

The bipartisan innovation package offers enormous potential upside along several dimensions for U.S. science, innovation, and competitiveness. To enable that upside, an EPSCoR compromise is worth pursuing.