CHIPS and Science: FY24 Research Appropriations Short by Over $7 Billion

When Congress adopted the CHIPS and Science Act (P.L. 117-167) in 2022 on a bipartisan basis, it was intended to strengthen the United States’ ability to compete and to invest in solutions for national challenges. Beyond semiconductors, CHIPS and Science took an array of concrete steps to strengthen innovation: it provided strategic focus for the federal R&D enterprise, created investments in U.S. workers and regions, expanded the funding toolkit, and authorized boosts for science and education across the spectrum. 

Such a varied approach is critical in the race for technological and economic advantage, as other nations mount challenges to U.S. leadership – particularly China, which has seized the lead in several key technology areas after years of accelerated investment. But despite this impetus, appropriations for research agencies have fallen quite short of the CHIPS and Science targets. Following an FY 2023 omnibus shortfall of nearly $3 billion, FY 2024 appropriations to date for research agencies are approximately $7.5 billion below authorized levels (see graph). 

This report provides a detailed breakdown of accounts and programs for these agencies and compares current appropriations against those authorized by CHIPS and Science, as a reference and resource for policymakers and advocates.

Federal Research Agency Appropriations vs. CHIPS Authorizations
Federal Research Agency Appropriations vs. CHIPS Authorizations

CHIPS and Science Background

CHIPS and Science took manifold steps to strengthen the U.S. science enterprise. A conceptual throughline is the establishment of key technology focus areas and societal challenges defined in Section 10387, shown in the table below. While not the only priorities for federal R&D, these focus areas provide a framework to guide certain investments, particularly those by the National Science Foundation’s new technology directorate.

These key technology areas are also relevant for long-term strategy development by the Office of Science and Technology Policy and the National Science and Technology Council, as directed by CHIPS and Science. Several of the technology areas also appear on the Defense Department’s Critical Technologies list.

Table 0: Key technology focus areas

Table 0a: Key technology focus areas
AI, machine learning, autonomy*Advanced communications and immersive technologies*
Advanced computing, software, semiconductors*Biotechnology*
Quantum information science*Data storage and management, distributed ledger, cybersecurity
Robotics, automation, advanced manufacturingAdvanced energy technology, storage, industrial efficiency*
Natural/anthropogenic disaster prevention and mitigationAdvanced materials science*
Table 0b: Societal, national, and geostrategic challenges
U.S. national securityClimate change and sustainability
Manufacturing and industrial productivityInequitable access to education, opportunity, services
Workforce development and skill gaps
*Also related to Pentagon-identified Defense Critical Technology Area

While much of the focus has been on semiconductors, the activities covered in this report constitute the bulk of the “and Science” portion of CHIPS and Science. While a full index of all provisions is not the goal here, it’s worth remembering the sheer variety of activities authorized in CHIPS and Science, which cut across areas including:

Aggregate Agency Appropriations

In the aggregate, CHIPS and Science authorized three research agencies – the National Science Foundation (NSF), the Department of Energy Office of Science (DOE SC), and the National Institute of Standards and Technology (NIST) – to receive $26.8 billion in FY 2024, a $4.5 billion boost from the FY 2023 authorizations. House and Senate appropriations to this point – including the House Commerce, Justice, Science and Related Agencies bill, which was not adopted by the Appropriations Committee before the August break – amount to somewhat above $19 billion in both, representing a more than $7 billion or approximately 28% shortfall, in each (see Table 1 below). In fact, these aggregates represent not only a shortfall below the FY 2024 authorization, but a reduction of $250 million and $421 million, respectively, below FY 2023 appropriations, when factoring in FY 2023 NSF and NIST funding provided as supplemental. 

The gap for NIST grows larger when accounting for earmarks, which amounted to approximately $119 million in the House and $199 million in the Senate. Excluding earmarks, the NIST appropriation totals for FY 2024 result in shortfalls below the authorization of $294 million or 18% in the House, and $403 million or 24% in the Senate.

Table 1: Major Research Agency Appropriations vs. CHIPS Authorizations in FY 2024

CHIPS FY24 AuthorizationsFY24 OMB RequestFY24 House ($M)*CHIPS Diff ($M)CHIPS Diff (%)FY24 Senate ($M)*CHIPS Diff ($M)CHIPS Diff (%)
National Science Foundation$15,647$11,314$9,630-$6,017-38.5%$9,500-$6,147-39.3%
DOE Office of Science$9,542$8,800$8,100-$1,442-15.1%$8,430-$1,112-11.7%
National Institute of Standards & Technology$1,652$1,632$1,477 -$175-10.6%$1,448 -$204-12.3%
Dollars in millions | FY 2024 NIST appropriations include earmarks of $119 million in House and $199 million in Senate.

Agency Breakdowns

National Science Foundation

NSF is at the core of the CHIPS and Science goals in manifold ways. It boasts a long-term track record of excellence in discovery science at U.S. universities and is the first or second federal funder of research in several tech-relevant science and engineering disciplines. It also seeks to boost the talent pipeline by engaging with underserved research institutions and student populations, supporting effective STEM education approaches, and providing fellowships and other opportunities to students and teachers. 

CHIPS and Science also expanded NSF’s ability to drive technology, innovation, and advanced manufacturing, augmenting existing innovation programs like the Engineering Research Centers and the Convergence Accelerators with new activities like the Regional Innovation Engines. 

Table 2: National Science Foundation CHIPS Authorizations and Funding

CHIPS FY24 AuthorizationsFY24 OMB BudgetFY24 House ($M)CHIPS Diff ($M)CHIPS Diff (%)FY24 Senate ($M)CHIPS Diff ($M)CHIPS Diff (%)
Research and Related Activities (R&RA)$12,050$9,030$7,867-$4,183-34.7%$7,608-$4,442-36.9%
STEM Education$2,500$1,444$1,006-$1,494-59.8%$1,228-$1,272-50.9%
Major Research Equipment and Facils$355$305$254-$101-28.5%$187-$168-47.3%
Dollars rounded to millions. Changes calculated from unrounded figures.

As seen in Table 2, the FY 2024 appropriations for NSF are roughly $6 billion or 39% below the CHIPS and Science authorization. The agency toplines are also 2.5% and 3.8% below FY 2023 figures in total, including FY 2023 supplemental spending.

In both the House and the Senate, FY24 Appropriations fall far short of CHIPS authorizations across research and education accounts.

In both the House and the Senate, FY24 Appropriations fall far short of CHIPS authorizations across research and education accounts.

Research & Related Activities (R&RA). R&RA is the primary research account for NSF, supporting grants, centers, instrumentation, data collection, and other activities across seven research directorates including the new Technology, Innovation, and Partnerships (TIP) directorate. These directorates play a foundational role in driving U.S. leadership in biology, computing and information science, engineering, geoscience, math and computer science, and social science, as well as integrated and international programs. R&RA can likely absorb substantial additional funding: the agency must routinely leave thousands of high-scoring grant proposals on the table for lack of funding. For instance, in FY 2021, NSF had to leave unfunded over 4,000 proposals amounting to $4.1 billion ranked “Very Good” or better.

In report language, Senate appropriators encourage NSF to initiate a contract with the National Academies to pursue a CHIPS and Science-mandated assessment of the key technology focus areas. For FY 2024, Senate appropriators have provided the same funding as FY 2023 for the Regional Innovation Engines, quantum information science activities, and AI research. The EPSCoR program received $275 million, a $20 million increase. House appropriators have not yet released appropriations report language for NSF.

STEM Education. The Directorate for STEM Education houses NSF activities across K-12, tertiary education, learning in informal settings, and outreach to underserved communities. CHIPS and Science authorized increased funding for multiple individual programs including Graduate Research Fellowships, Robert Noyce Teacher Fellowships Program, CyberCorps, and the new Centers for Transformative Education Research and Translation, among others. These programs serve an array of functions, including STEM teacher recruitment, support for the federal cybersecurity workforce, and support for a range of learners and institutions including veterans and underrepresented minorities.

Senate appropriators provided a mix of small changes, flat funding, or trims from FY 2023 levels to several NSF STEM programs including graduate and Noyce fellowships, the HBCU Undergraduate Program and the Centers for Research Excellence in Science and Technology (CREST). In most cases these figures were all well short of CHIPS and Science targets. Notably, Senate appropriators provided $40 million for a National STEM Teacher Corps pilot program and encouraged NSF to establish a Centers for Transformative Education Research and Translation, both authorized in CHIPS and Science.

Department of Energy Office of Science

The Office of Science (SC) is the largest funder of the physical sciences including chemistry, physics, and materials, all of which contribute to the technology priorities in CHIPS and Science. In addition to funding Nobel prizewinning basic research and large-scale science infrastructure, the Office also funds workforce development, use-inspired research, and user facilities that provide tools for tens of thousands of users each year, including hundreds of small and large businesses that use these services to drive breakthroughs. More than two thirds of SC-funded R&D is performed at national labs. SC also supports workforce development and educational activities for students and faculty to expand skills and experience.

Table 3: Office of Science CHIPS Authorizations and Funding

CHIPS FY24 AuthorizationFY24 OMB BudgetFY24 House ($M)CHIPS Diff ($M)CHIPS Diff (%)FY24 Senate ($M)CHIPS Diff ($M)CHIPS Diff (%)
Total Budget$9,542$8,800$8,100-$1,442-15.1%$8,430-$1,112-11.7%
Adv. Scientific Computing$1,194$1,126$1,016-$178-14.9%$1,016-$178-14.9%
Basic Energy Sciences$2,867$2,693$2,587-$280-9.8%$2,679-$188-6.5%
Bio. and Environ. Research$947$932$827-$120-12.6%$941-$6-0.6%
Fusion Energy Sciences$1,043$1,010$778-$265-25.4%$792-$251-24.1%
High-Energy Physics$1,290$1,226$1,192-$98-7.6%$1,226-$64-5.0%
Nuclear Physics$977$811$800-$177-18.1%$818-$158-16.2%
Other*$1,224$1,002$899-$325 -26.5%$957-$267-21.8%
*Includes lab infrastructure, STEM ed and workforce, accelerator and isotope R&D, and other activities. Dollars rounded to millions. Changes calculated from unrounded figures.

As seen in Table 3, topline FY 2024 appropriations have been over $1 billion or at least 12% short of the CHIPS authorization in both chambers. House appropriations have been flat from the FY 2023 omnibus while Senate appropriators have provided SC with a 4% increase overall.

In both the House and the Senate, FY24 Appropriations fall far short of CHIPS authorizations across research and education accounts.

Advanced Scientific Computing Research (ASCR) funds research in AI, computational science, mathematics, and networking. Among CHIPS and Science priorities, ASCR will begin to establish a dedicated Quantum Network along with other research, testbeds, and applications in FY 2024. CHIPS and Science authorized $31.5 million in FY 2024 for the QUEST Act, to give U.S. researchers access to quantum hardware and research cloud resources, while House appropriators have provided up to $15 million. CHIPS also authorized $100 million for provision of quantum network infrastructure. Senate appropriators directed DOE to provide an update on its plan to sustain U.S. leadership in advanced computing including in AI, zettascale computing, and quantum computing.

Basic Energy Sciences (BES), the largest SC program, supports fundamental science disciplines with relevance for several CHIPS technology areas including materials, microelectronics, AI, and others, as well as extensive user facilities and other novel initiatives. CHIPS and Science authorizations for FY 2024 included research and innovation hubs related to artificial photosynthesis ($100 million) and energy storage ($120 million). Both committees funded the innovation hubs on these topics at $20 million and $25 million, respectively. CHIPS also authorized $50 million per year for carbon materials and storage research in coal-rich U.S. regions.

Biological and Environmental Research (BER) supports research in biological systems science including genomics and imaging, and in earth systems science and modeling. BER programs have fared quite differently in appropriations, with House appropriators reducing funding by $82 million or 9% below FY 2023 omnibus levels, while BER would receive a $32 million or 4% boost in the Senate.

Fusion Energy Sciences (FES) supports research into matter at high densities and temperatures to lay the groundwork for fusion as a future energy source. Appropriations thus far have provided far less than requested for public-private partnerships to support and expand the domestic fusion industry. The Milestone-Based Development Program, to develop technology roadmaps and achieve progress toward fusion pilot plants, would receive $35 million in the House and not less than $25 million in the Senate, versus a combined request of $135 million for the milestone program and the Innovation Network for Fusion Energy (INFUSE) program, which enables industry partnerships with national labs and American universities.

Energy Earthshots are a crosscutting DOE initiative to tackle challenges at the nexus of basic and applied R&D through multidisciplinary team science, thus enabling DOE to better achieve progress in the CHIPS- identified advanced energy technology focus area. Appropriations thus far would dramatically scale back SC’s Earthshot investments from FY 2023 levels. House appropriators would provide $20 million and Senate appropriators $67 million for SC’s portion of the Earthshot initiative, versus FY 2023 funding of $100 million and an FY 2024 request level of $175 million. Ongoing Earthshots address hydrogen, energy storage, carbon removal, enhanced geothermal, offshore wind, industrial heat, and clean fuels, with additional projects anticipated in FY 2024.

Quantum Information Science is a priority for both CHIPS and Science and in the Administration’s request, but appropriations remain limited. House appropriators have provided not less than $245 million, same as the FY 2023 omnibus level, while the Senate provided a $10 million or 4% increase.

National Institute of Standards and Technology

While smaller than the other agencies covered here, NIST plays a critical role in the U.S. industrial ecosystem as the lead agency in measurement science and standards-setting, as well as funder of world-class physical science research and user facilities. NIST R&D activities cover several CHIPS And Science technology priorities including cybersecurity, advanced communications, AI, quantum science, and biotechnology. NIST also boasts a wide-ranging system of manufacturing extension centers in all 50 states and Puerto Rico, which help thousands of U.S. manufacturers grow and innovate every year.

As seen in Table 4, the NIST appropriation – which doesn’t include mandatory semiconductor funding – is 11% to 12% below the CHIPS and Science level for FY 2024. These figures include earmarks of $119 million and $199. Excluding earmarks, the NIST shortfalls are 18% in the House and 24% in the Senate.

Table 4: NIST CHIPS and Science Authorizations and Funding

CHIPS FY24 AuthorizationFY24 OMB BudgetFY24 House ($M)*CHIPS Diff ($M)CHIPS Diff (%)FY24 Senate ($M)*CHIPS Diff ($M)CHIPS Diff (%)
Total Budget $1,652 $1,632 $1,477-$175-10.6%$1,448-$204-12.3%
NIST Labs (STRS) $1,048 $995 $1,020-$28-2.6%$1,021-$26-2.5%
Industrial Tech Services $404 $375 $237-$167-41.3%$212-$192-47.5%
Hollings MEP $300 $277 $200-$100-33.3%$175-$125-41.7%
Manufacturing USA $104 $98 $37-$67-64.4%$37-$67-64.4%
Construction $200 $262 $220$2010.0%$215$157.3%
*Includes earmarks of $119 million in House and $199 million in Senate.
FY24 appropriations are far short in research and manufacturing accounts for NIST

Scientific and Technical Research Services (STRS) is the account for NIST’s national measurement and standards laboratories, which pursue a wide variety of CHIPS and Science-relevant activities in cybersecurity, AI, quantum information science, advanced communications, engineering biology, resilient infrastructure, and other realms. STRS also funds two user facilities, the NIST Center for Neutron Research and the Center for Nanoscale Science and Technology.

Excluding FY 2024 House and Senate earmarks, NIST lab programs would receive cuts of approximately $50 million under current appropriations.

House report language for NIST has not yet been adopted, but Senate appropriators approved the requested $5 million increase for quantum information science, while providing cybersecurity funding no less than FY 2023 levels and holding AI research flat at FY 2023 enacted levels. Critical and emerging technology investments received a $12 million increase versus the requested $20 million boost.

Industrial Technology Services is the overarching account funding the Hollings Manufacturing Extension Partnership (MEP) and the Manufacturing USA innovation network. As can be seen in Table 4, these programs collectively faced a much greater authorization shortfall than NIST lab programs.

Appropriations in Historical Context

Relative funding for NSF, SC and NIST has evolved over the decades, as seen in the graph on the following page. As a share of the U.S. economy, funding for the three agencies experienced marked decline in the late 1970s and early 1980s, dropping to 0.05% of U.S. GDP in the mid-1980s. Beginning in the later Reagan era and continuing into the Clinton era, the three agencies experienced a recovery and rise through the late 1990s tech bubble.

After peaking in FY 2003 at 0.083 percent of GDP, the three agencies have undergone a period of relative funding stagnation. Apart from the transient Recovery Act funding spike, agencies’ combined funding has wavered around 0.075% of GDP. Much of this stagnant is due to the discretionary caps under the Budget Control Act, which took effect beginning in FY 2012.

CHIPS and Science provided NIST mandatory funding specifically earmarked for semiconductor R&D and industry incentives but left the range of other technology priorities to be funded through annual discretionary appropriations, which as described have been limited. Under current appropriations, agency discretionary budgets would likely drop to near 0.07% of U.S. GDP, their lowest point in 25 years.

CHIPS and Science Research Agencies as a Share of U.S. GDP

The bold vision of the CHIPS and Science Act isn’t getting the funding it needs

Originally published May 17, 2023 in Brookings.

The legislative accomplishments of the previous session of Congress have given advocates of more robust innovation and industrial development investments much to be excited about. This is especially true for the bipartisan CHIPS and Science Act (CHIPS), which committed the nation not just to compete with China over industrial policy and talent, but to advance broad national goals such as manufacturing productivity and economic inclusion while ramping up federal investment in science and technology.

Most notably, CHIPS authorized rising spending targets for key anchors of the nation’s innovation ecosystem, including the National Science Foundation (NSF), the Department of Energy’s Office of Science, and the National Institute of Standards and Technology (NIST). In that regard, the act’s passage was a breakthrough—including for an expanded focus on place-based industrial policy.

However, it’s become clear that this breakthrough is running into headwinds. In spite of ongoing rhetorical support for the act’s goals from many political leaders, neither the FY 2023 Consolidated Appropriations Act nor the Biden administration’s FY 2024 budget request have delivered on the intended funding targets. This year’s omnibus funding remained nearly $3 billion short of the authorized levels for research agencies, while the 2024 budget request undershoots agency targets by over $5 billion. And with the debt ceiling crisis coming to a head this month—and House legislation on the table that would substantially roll back federal spending—it’s even harder to be optimistic about the odds of fulfilling the CHIPS and Science Act’s vision of resurgent investment in American competitiveness.

Instead, delivery on the CHIPS and Science Act paradigm can only be fractional as of now, with a $3 billion (and growing) funding gap for research and less than 10% of the five-year place-based vision funded to date.

All of which underscores how much work remains to be done if the nation is going to deliver on the promise of a rejuvenated innovation and place-based industrial strategy. Leaders need to make an energetic and bipartisan reassertion of the CHIPS vision without delay if the government is to truly follow through on its bold promises.

CHIPS has a broad, Innovative policy menu to support renewed American Competitiveness

Recently, Rep. Frank Lucas (R-Okla.), chair of the House Committee on Science, Space, and Technology, rightly pointed out that the “science” portion of the CHIPS and Science Act (i.e., separate from its subsidies for semiconductor factories) will be “the engine of America’s economic development for decades to come.” One way the act seeks to achieve this is by creating the Directorate for Technology, Innovation and Partnerships at NSF, and focusing it on an evolving set of technological and social priorities (see Tables 1a + 1b). These won’t just drive NSF technology work, but will guide the development of a more concerted whole-of-government strategy.

Table 1a: Key technology focus areas

Table 1a: Key technology focus areas
AI, machine learning, autonomy*Advanced communications and immersive technologies*
Advanced computing, software, semiconductors*Biotechnology*
Quantum information science*Data storage and management, distributed ledger, cybersecurity
Robotics, automation, advanced manufacturingAdvanced energy technology, storage, industrial efficiency*
Natural/anthropogenic disaster prevention and mitigationAdvanced materials science*
*Also related to Pentagon-identified Defense Critical Technology Area
Table 1b: Societal, national, and geostrategic challenges
U.S. national securityClimate change and sustainability
Manufacturing and industrial productivityInequitable access to education, opportunity, services
Workforce development and skill gaps

In light of these priorities, it’s no mistake that Congress placed the NSF, the Energy Department’s Office of Science, NIST, and the Economic Development Administration (EDA) at the core of the “science” portion of the act. The first three agencies are major funders of research and infrastructure for the physical science and engineering disciplines that undergird many of these technology areas. The EDA, meanwhile, is the primary home for place-based initiatives in economic development.

Meanwhile, in keeping with the larger strategy of countering the nation’s science and technology drift, Congress adopted five years of rising “authorizations” for these core innovation agencies. However, it bears remembering that these authorizations are not actual funding, but multiyear funding targets that, if fully funded year by year, would result in an aggregate budget doubling. In short, Congress has declared that the national budget for science and technology should go up, not down, over the next five years.

It’s also worth noting that the act seeks to boost investment in many different areas, including:

The upshot: Supporters are not wrong in seeing the CHIPS and Science Act as a major moment of aspiration for U.S. innovation efforts and ecosystems.

Government Appropriations are falling short on CHIPS funding by billions of dollars

Yet for all the act’s valuable programs and focus areas, not all is well. As of now, there have been two rounds of proposed or adopted funding policy for CHIPS research agencies—and the results are mixed to disappointing as details a new funding update on the CHIPS and Science Act from the Federation of American Scientists.

The first funding round was the FY 2023 omnibus package Congress adopted last December. There, the aggregate appropriations for the NSF, Office of Science, and NIST amounted to $2.7 billion—a 12% shortfall below the aggregate FY 2023 target of $22.4 billion.

Table 2: Major research agency appropriations vs. CHIPS authorizations

CHIPS FY23 AuthorizationsFY23 Omnibus Appropriation*Difference ($M)Difference (%)CHIPS FY24 AuthorizationsFY24 OMB BudgetDifference ($M)Difference (%)
National Science Foundation$11,897$9,874($2,023)-17.0%$15,647$11,314($4,333)-27.7%
DOE Office of Science$8,902$8,100($802)-9.0%$9,542$8,800($742)-7.8%
National Institute of Standards & Technology$1,551$1,654$1036.6%$1,652$1,632($20)-1.2%
Dollars in millions*FY23 omnibus figures include NIST earmarks and supplemental NIST and NSF spending for CHIPS and Science activities

Then, in March, amid what was already a yawning funding gap, the White House released its FY 2024 budget proposal. That proposal would have the three CHIPS research agencies falling further behind: $5.1 billion, or 19% below the act’s authorization.

In both the omnibus and the budget, NSF funding was the biggest miss. This can be divided into a few segments:

With these shortfalls at NSF and other agencies, it will be difficult for federal science and innovation programs to have the transformative impact that CHIPS envisioned.

Funding for place-based industrial policy programs is also coming up short

In addition to decreased agency support, actual funding for what we call the “place-based industrial policy” in the CHIPS and Science Act is also coming up short, by even greater relative margins. Where the agency research funding gaps are a substantial restraint on innovative capacity, the diminished place-based funding is an out-and-out emergency.

These programs are important because after years of uneven economic progress across places, CHIPS saw Congress finally accelerating large-scale, direct investments to unlock the innovation potential of underdeveloped places and regions. Thanks to some of those investments, including several new challenge grants, scores of state and local leaders across the country have thrown themselves headlong into the design of ambitious strategies for building their own innovation ecosystems.

Yet for all of the legitimate excitement and interest of stakeholders in literally every state, the numbers that permit actual implementation are not all good. Looking at several of the most visible new place-based programs, the funding news is so far mixed to outright disappointing.

Table 3: Placed-based innovation authorized in CHIPS and Science Act

ProgramWhat It DoesCHIPS and Science AuthorizationsAppropriation So FarFY24 OMB BudgetPercent of Authorization Funded To Date
EDA Regional Technology and Innovation HubsPlanning grants to be awarded to create regional technology hubs focusing on technology development, job creation, and innovation capacity across the U.S.$10 billion over five years$500 million$48.5 million discretionary; $4 billion mandatory5%
EDA Recompete Pilot ProgramInvestments in communications with large prime age (25-54) employment gaps$1 billion over five years$200 million$200 million20%
NSF Regional Innovation EnginesUp to 10 years of funding for each Engine (total ~$160 million per) to build a regional ecosystem that conducts translatable use-inspired research and workforce development$3.25 billion* over five years$200 million$300 million6%
NIST Manufacturing Extension PartnershipA network of centers in all 50 states and Puerto Rico to help small and medium-sized manufacturers compete$575 million$188 million$277 million68%
NIST Manufacturing USAProgram office for nationwide network of public-private manufacturing innovation institutes$201 million$51 million$98 million53%
Totals (including MEP and M-USA FY23 authorizations)$15 billion$1.1 billion8%
* The NSF Regional Innovation Engines is assumed to have received 50% of a $6.5 billion CHIPS and Science Act provision that also authorized the Translation Accelerators program

Besides these new CHIPS programs, two established mainstays of place-based development in the manufacturing domain are also facing funding challenges.

Overall, the current and likely future funding shortfalls facing many of the nation’s authorized place-based investments appear set to diminish the reach of these programs.

Should funding for critical technology areas be mandatory?

The CHIPS and Science Act establishes a compelling vision for U.S. innovation and place-based industrial policy, but that vision is already being hampered by tight funding. And now, the looming debt ceiling crisis is only going to make the situation worse.

Nor are there any silver bullets to resolve the situation. Somehow, Congress has to keep in sight the long-term vision for U.S. economic and military security, and find the political will to make the near-term financial commitments necessary for U.S. innovators, firms, and regions.

But it’s not just up to Congress. As we’ve seen, the White House budget also contains sizable funding shortfalls for research agencies. Federal agencies and the Office of Management and Budget will be formulating their FY 2025 budgets this summer in preparation for release next year. As they do so, they should prioritize long-term U.S. competitiveness across strategic technology areas and geographies more so than they have to date.

Lastly, while the mandatory spending proposal mentioned above for the Regional Technology and Innovation Hubs program may not get anywhere this year, mandatory funding as a mechanism for science and innovation investment is not a bad idea in principle. Nor is this the first time policymakers have pitched such an idea: The Obama administration attempted to make aggressive use of mandatory spending to supplement its base research and development requests, and congressional leaders have also floated the idea in recent years. Given the long-term nature of science and innovation, sustained and predictable support would be a boon, and a mandatory funding stream could provide much-needed stability.

Given all this, the moment may be approaching try again to leverage mandatory funding of innovation programs. With caps on discretionary spending on the horizon but bipartisan support for the CHIPS technology agenda still in place, the time to consider a mandatory funding measure may have arrived. Such a measure—structured by, say, a “Critical Technology and National Security Fund”—would go a long way toward ensuring more sustained, stable support for critical technologies in economic and military security. This is exactly the kind of support that CHIPS provides for the semiconductor industry, which is far from the only advanced technology sector subject to global competition.

In short, as we enter the summer months and face down a looming budget crisis, Congress should do for the “science” part of its watershed bill what it did with the “chips” part. Leaders in Washington must move now to ensure that we can deliver on the commitments set forth in the CHIPS and Science Act—all of them.

Proposed House Budget Would Reduce Federal R&D By An Estimated $442 Billion or 19% Over 10 Years

On Wednesday, April 19, Speaker McCarthy unveiled the Limit, Save, Grow Act of 2023, which would establish a set of discretionary spending caps over the next decade through FY 2033, allowing for only sub-inflation increases in overall spending. These caps would have the effect of reducing base discretionary spending by over $3.5 trillion below baseline over that time.

Read the full analysis here.