Research Cuts Could Cost the Economy a Trillion Dollars

The first ever estimates of the economic impact of cuts to U.S. government-funded research are out from economists at American University in Washington. The current administration has already frozen billions of dollars in research funding. The president’s budget proposal last week called for cutting funding to the National Science Foundation by more than half. The analysis of economic impact found that cuts to research funding of 25% would cost the U.S. economy 3.8% of GDP – a little more than a trillion dollars.

On top of that, when the economy shrinks, tax revenues shrink. So research cuts of 25% would cost the government a 4.3% loss of revenue. Losses all around. It’s not a pretty picture.

A Spark for a Long-Term Decline?

Ignacio González, an economics professor and co-director of the Institute for Macroeconomic and Policy Analysis at American University, is one of the authors of this study.  He described the lasting effect of these cuts on the U.S. economy in stark terms:

“Science drives technological progress, and technological progress improves everyone’s standard of living. It follows that massive cuts to scientific funding will stifle American innovation and make us all poorer in the long run.

“It is going to be a decline forever. The U.S. economy is going to be smaller.”

A Loss of Leadership

Testifying before Congress, CEO Sudip Parikh of the American Association for the Advancement of Science said:

“There’s the possibility of catastrophic cuts in ’26. I’ve seen and I know you all have seen the leaked passback budget for NIH. Now, I hope it’s not real, I hope it’s wrong. But if those dollar numbers of anywhere from 20% to 45% cuts are real, I want to be really clear. We’re no longer in a race with China on biomedical research. We will have lost that race.”

Concerning the cost of research cuts to America’s economy and American greatness, they simply make no sense. We all will suffer from them.

Click here for the report and here for further reporting on it. For more on the cuts to research funding the administration proposes, click here and here.

Deux Côtes, painting by Wassily Kandinsky / Artvee

Subscribe by email to follow the accumulating evidence and observations that shape our view of health, obesity, and policy.

May 5, 2025