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President Donald Trump has released a budget plan for federal discretionary spending (which doesn’t include interest on the national debt or entitlement programs like Social Security). It has a few things to like, but it’s alarming for its deep cuts to U.S. government support of science and technology. Although Trump’s document is titled “America First: A Budget Blueprint to Make America Great Again,†much of the plan would do exactly the opposite.
Support for science and technology is one of the key functions of a modern, rich-country government. Developed nations like the US are at the technological frontier. It’s hard for them to grow by imitating or catching up to other countries, so in order to advance, they have to improve productivity. But productivity growth has been slowing noticeably for the past decade:
One explanation economists have offered for this dangerous trend is a slowdown in the rate of technological progress. Research shows that most scientific and technological fields require more money and manpower to maintain the same rate of progress as time goes on. That means that in the absence of a lucky boom in some new technological field (think of the growth of information technology in the 1990s) the share of national resources devoted to research needs to keep increasing. Unfortunately, federal research spending in the U.S. has leveled off.
Trump’s budget would, in the unlikely event that it passes Congress intact, increase military spending. That could boost science if the added money is used for pioneering research, as it often has been used in decades past. But signs are not good — for example, Trump’s plan eliminates ARPA-E, the Energy Department agency devoted to inventing alternative energy technologies. Not only does that ignore Defense Secretary James Mattis’s warning that climate change is a national-security threat, it stops the U.S. military from developing alternatives to fossil fuel that would reduce the danger of having supply lines cut during wartime.
Along with a $900 million cut to the Department of Energy, this would also would make it harder for the U.S. to keep its lead in cutting-edge technologies like electric cars. American companies like Tesla Motors have seized the initiative in developing next-generation batteries and the high-tech cars that use them. If the US were to hang onto and extend that head start, it could recover market share in auto manufacturing from the Asian and European countries that moved forward in the 1980s. If Trump really wants to bring advanced manufacturing back to the US, he should stop trying to cut off the government research that helps the U.S. stay ahead
of rivals.
But the bad news goes beyond the energy field. The proposal would cut the National Institutes of Health budget by a fifth. That would slow US progress in cutting-edge medical technology and biotech. Those industries are helping Rust Belt cities like Pittsburgh revitalize themselves. Trump’s Midwestern supporters should worry.
Even most free-marketers recognize that the government has a key role in basic research and technology. The private sector won’t pick up the slack — private companies are great at turning research into commercial products, but bad at doing pioneering scientific work.
This is because it’s hard for companies to capture the fruits of research spending — science is a public good. The US high-tech economy works well because it has a pipeline — government and universities do the basic research, while companies commercialize the science that emerges. Cutting off the first part of the pipeline will strangle American industry, leaving rivals in Asia
and Europe to dominate the industries of the future.
Trump’s plan generally decreases the level of scientific expertise in the U.S. government. Trump would cut NASA outreach and education programs, Earth sciences research, public health programs and more. It’s a partial rollback of the brain trust that the U.S. built during the Cold War under Presidents Dwight Eisenhower, John F. Kennedy and Ronald Reagan.
That national strategy worked well for many decades, and there’s no apparent reason to end it — science funding is a pittance compared to the money spent on health care or other government programs, so the deficit savings won’t even be large.
The political purpose of these cuts isn’t even clear. By large majorities, Americans of all political persuasions say that government investments in science and technology pay off in the long run. So not only are Trump’s proposals likely to hurt US industry and technology, they’re not even consistent with public opinion. If these cuts go through, it will be a big unforced error on the part of the US government.
— Bloomberg
Noah Smith is a Bloomberg View columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion