Will Business Step In to End a Sequester

May 13 [Mon], 2013, 12:40

By now we're all painfully aware of the federal government's across-the-board cutbacks on discretionary spending--better known as --and how it has imperiled publicly funded scientific research in the U.S. The only thing less clear than the sequester's long-term impact on academia, industry and the economy is how to end its austerity measures, which could last through 2021.

A group of science and technology pundits on Tuesday posited some potential approaches to overcoming the sequester during a teleconference hosted by the Center for Policy on Emerging Technologies . Based on their suggestions, however, we'll be living with the current budget cuts for some time.

A predominant question is how to make up for shortfalls in funding for early stage research. Industry, which has long benefitted from publicly funded research, could be encouraged to make up for the government's lack of early stage funding by investing more in the R&D it ultimately uses to sell its products, C-PET presidentnoted during Tuesday's teleconference. Apple, which ended its most recent earnings period with , "is sitting on more money than the federal government spends on all of its discretionary R&D combined," Cameron added. In essence, industry could, for a time, begin to freight the bill for earlier stages of the R&D process, not necessarily a significant burden as most investment occurs later on when bringing products to market.

If companies don't want to spend more on basic science, then their most important role in preventing the sequester from long-term damage to the economy and U.S. competitiveness could be to bring to bear their considerable lobbying influence to get the government to decide where to spend limited funds, said , a C-PET senior fellow and former head of corporate strategy at the World Bank. "They have to have a collective voice and effort to push policy makers [to see] that this is important not just for university systems but for the longer term impact on the U.S. economy," he added.

Arguments over the U.S.'s lasting competitiveness within the global economy resonate on both sides of the aisle in Congress. Perhaps it's time to highlight the growing crisis by laying out the implications of a research funding deficit that lasts beyond the end of this decade, said Jennifer Poulakidas, head of government relations for the , which advocates for universities nationwide. For example, the influential 2005 National Academies reportpaved the way for the(reauthorized in 2010), which emphasizes the importance of funding high-risk, high-reward research. That act, among other things, set baselines for funding, including the goal of doubling the annual appropriations for the National Science Foundation by 2011. Yet another turgid policy tome may for some members of Congress seem like an old and tired argument, but "it still makes the case for why federal investment in basic research is important," she added.

The sequestration was "a strange little accident" that took place at a time when there's been a lot of opposition to federal government spending, Cameron said, and U.S. scientists have come to rely on federal funding for basic research, with the government picking up more than one third of research and development tab.

The federal budget sequestrationafter Congress and the Obama administration failed to come up with a compromise plan for reducing federal budget by $4 trillion, leading to more than $1 trillion in cuts to the federal government's discretionary spending allowance. Unless an alternative is proposed, the sequestration will continue through fiscal 2021, although spending will increase a bit annually beginning in fiscal 2014.

In the meantime, researchers are left fighting for a bigger piece of a shrinking pie, Poulakidas said. In the 1970s, the mandatory side of the federal budget--which includes programs such as Medicare, Medicaid and Social Security--accounted for 40 percent of spending. By 2017, mandatory programs are expected to gobble up about 74 percent of the federal government's finances, she added.

A full assessment of the sequestration's impact won't be possible for years, when government, industry and academia can look back at lost opportunities that arose from not investing enough in basic research. Poulakidas said, "It's hard to fight sequestration because we can't make specific arguments about what we're losing."

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