CHIPS Act Funding for Science and Research Falls Short

A renewed focus on the need to rein in federal spending has raised concerns about whether a bipartisan law that dedicates billions to advancing scientific research as well as revitalizing the American semiconductor industry will receive all of its promised funding.

President Biden and House Republican leaders have reached an agreement in principle to limit federal spending over the next two years in exchange for suspending the debt ceiling and averting the risk of an economic catastrophe.

But some lawmakers and other proponents of a bipartisan law, the CHIPS and Science Act, have grown worried that the legislation’s ambitious goals of bolstering the nation’s scientific edge and countering China’s technological rise could be undercut by limits on government spending.

The debt ceiling deal cuts so-called nondefense discretionary funding — which includes scientific research — for the 2024 fiscal year. It also limits all discretionary spending to 1 percent growth in 2025, which is effectively a budget cut since that is likely to be slower than the rate of inflation.

Concerns about whether the CHIPS Act would receive its promised funding were growing even before the debt limit showdown. Lawmakers have already fallen short in appropriating the full amount of funding authorized by the legislation.

Most of the focus has been on the $52 billion the law provided to ramp up semiconductor manufacturing and research in the United States. That money is not expected to be at risk because it has already been appropriated. But the legislation also authorized about $170 billion for a number of key initiatives to boost research and development, which has to be approved by lawmakers each year through a separate appropriations process. As a result, the remaining portion of funding could be subject to cuts or shortfalls in the coming years.

Funding levels for various government agencies that were intended to receive more robust increases have already fallen short by billions of dollars. In the fiscal year 2023, about $9.87 billion was appropriated for the National Science Foundation, down from the $11.9 billion authorized by the CHIPS Act. About $8.1 billion was approved for the Energy Department’s Office of Science, down from $8.9 billion in authorized funds. The total funding for research agencies was nearly $3 billion short of authorized levels this year, according to a recent Brookings Institution analysis.

President Biden has underscored the increased funding for research and development in the package, promising that it would ensure the United States “leads the world in the industries of the future.”

“This bill is about more than chips, it’s about science as well,” Mr. Biden said after Congress passed the bill last year.

Agency leaders have been urging congressional appropriators to approve the full amount of funding to help achieve those goals. Sethuraman Panchanathan, the director of the National Science Foundation, said the money would help the nation lead in industries that were listed as key focus areas in the law, such as artificial intelligence and biotechnology.

“We have to make sure that the science portion is funded fully,” Mr. Panchanathan said.

Additional funding could allow the agency to invest more in a new department that aims to accelerate breakthroughs in key technologies, in part by creating pathways for researchers and start-ups to move their ideas from labs to the market. It could also help the agency expand A.I. research and training programs aimed at building up the nation’s STEM work force, which agency officials said were critical since the country is facing a shortage of workers to build semiconductors.

With additional money, the Energy Department’s Office of Science could invest more in upgrading infrastructure at its laboratories and advancing basic scientific research that underpins clean energy technologies, such as those that more efficiently capture carbon from the atmosphere and other waste streams.

The Commerce Department’s $10 billion effort to invest in areas with the potential to “become globally competitive” through the creation of at least 20 “technology and innovation hubs” across the country has received only 5 percent of funding so far. The five-year program, overseen by the department’s Economic Development Administration, aims to revitalize regions by creating jobs and strengthening the capacity to manufacture and deploy critical technologies.

Alejandra Castillo, a top Commerce official, called the $500 million in appropriated funds a “down payment” to lay the foundation of the program.

“With additional appropriations, E.D.A. can enable more tech hubs regions and invest in complementary projects that could alter the trajectory of job creation, innovation in key technologies and the scaling of industries of the future,” Ms. Castillo said in a statement.

Lawmakers on both sides of the aisle have urged congressional appropriators to fully fund the law’s initiatives, although some acknowledged that could be even more challenging with limits on spending.

Representative Frank Lucas, an Oklahoma Republican and the chair of the House Committee on Science, Space, and Technology, said he had been “very frustrated with how the funding of science has gone” in the United States in recent years and that he was “a little tense waiting to see” how much government funding would be available over the next few years.

“I’ll be out there hustling to make sure that science and research get their fair share,” Mr. Lucas said, adding that he understood that congressional appropriators had to work with constraints.

Representative Ro Khanna, a California Democrat who represents parts of Silicon Valley, said lawmakers should be “putting more urgency” into the law’s funding. He argued that failing to fully fund the efforts would hurt the country’s ability to lead in manufacturing and cutting-edge technology developments.

“A bill is fine, but without the money, it doesn’t mean anything,” Mr. Khanna said. “To make America a manufacturing superpower, we have to have advances in technology. Technology has to be the driver of that because it requires massive increases in productivity.”

Some have argued that the United States could fall behind other countries that have also pledged to boost investments in scientific research and technological developments, such as China.

“These folks are saying we want to not cede the future to China,” said Representative Zoe Lofgren of California, the top Democrat on the House Science Committee. “If you don’t do adequate investments in science, that’s exactly what they’re doing.”

Matt Hourihan, an author of the Brookings analysis and the associate director of R&D and advanced industry at the Federation of American Scientists, said the programs losing out on funding were vital to enhancing the country’s competitiveness, since they could help the United States make new discoveries that could “translate into commercial products” and be manufactured domestically. He added that the nation was “rapidly falling away from the original vision” of the law.

“Others, including China, are making similar investments in a lot of these technology areas,” Mr. Hourihan said. “If we aren’t investing to compete and achieve global leadership in these various fields of science and technology, then others will.”

At the end of last year, a bipartisan group of senators, led by Senator Maria Cantwell, a Washington Democrat and the chair of the Senate Committee on Commerce, Science, and Transportation, sent a letter to congressional appropriators urging them to fully fund the law, which they said would help scale up the nation’s highly skilled work force and strengthen American innovation.

The senators noted that funding for previously passed pieces of legislation meant to expand the nation’s investments in scientific research and development have also fallen short by billions of dollars, which they said prohibited government agencies from fully delivering on their potential and led to increased supply chain vulnerabilities. Key research agencies would have received about $77 billion in additional funding if Congress had followed the path of funding authorized by the America COMPETES Act of 2007, according to a 2022 analysis from the American Association for the Advancement of Science.

The senators argued that Congress must avoid the same pitfalls by fully funding the CHIPS Act.

“The strong focus on semiconductors is welcome, but the bill aspires to commence more substantial investment in a bunch of other technologies as well,” said Mark Muro, a senior fellow at Brookings and an author of the Brookings analysis. “That depends on funding the ‘and science’ part of the bill better.”

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