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The fiscal year 2027 (FY 2027) White House budget proposal’s sharp cuts to federal research and development (R&D) would weaken the United States’ long-term technological, economic, and national security advantages, even alongside record defense spending. Public investment in science—especially basic and use-inspired research—cannot be replaced by private capital and is essential for maintaining U.S. leadership as China rapidly expands its own state-backed R&D.
In April 2026, the White House released its FY 2027 “skinny” budget—an initial, high-level outline of the president’s spending priorities. While the proposal does not include full program-level details, it offers an early indication of the administration’s direction. And, as in FY 2026, the White House is requesting a sharp reduction in federal R&D funding.
These proposed cuts come alongside the largest defense budget request since World War II—a 42 percent increase to over $1.5 trillion. However, this historic rise in defense spending does not compensate for civilian science losses, with the administration’s proposal cutting $3 billion from basic defense research and $1 billion from applied defense research. This broad pullback ignores the reality that many of today’s most important defense technologies originated in research supported by “civilian” science agencies. For example, research into atomic physics supported by the National Science Foundation (NSF) and National Institute of Standards and Technology (NIST) led to the atomic clock, which later made the Global Positioning System (GPS) possible. GPS is now indispensable for military technologies such as precision-guided munitions.
Of course, the United States benefits from a dynamic private sector that leads the world in R&D investment. But private capital cannot replace federal support, as public and private R&D serve distinct functions. While private firms excel at use-inspired R&D, where the primary goal is commercial application, they rarely have the incentive to fund purely curiosity-inspired basic research. The federal government plays a unique role in anchoring both, supporting open-ended scientific work that expands human knowledge without an immediate payoff for private investors to support on their own.
Yet the line between curiosity and application is rarely linear, with today’s frontier technologies thriving at their intersection. Federal R&D frequently targets foundational, basic research that is simultaneously use-inspired. By de-risking this early-stage research before it is commercially viable, public R&D “crowds in” private investment, enabling downstream innovation and commercialization. Cutting federal R&D is therefore unlikely to shift basic research activity to the private sector. Instead, it is likely to reduce overall research funding, shrinking the entire innovation ecosystem by reducing the volume of foundational discoveries.
China, meanwhile, recognizes that scientific leadership and public R&D funding are central to military strength, economic power, and geopolitical influence. China’s science strategy is supported by state-directed funding and focused investments in frontier technologies like quantum and AI. Beijing also mandates that its largest state companies aggressively invest their own corporate revenues into R&D. As a result, China has rapidly scaled its investments, recently surpassing the United States in overall national R&D spending through concentrated state mandates. While the United States still maintains an absolute lead in total basic research spending, China is rapidly closing the gap. Driven by a 16.3 percent increase in basic science appropriations, China has systematically leveraged its public capital to dominate use-inspired foundational research, eroding the United States’' historic advantage in next-generation technology.
The United States once understood this connection between long-term national security and scientific leadership as well. Following World War II, U.S. leaders built the modern federal science enterprise because they learned from the war that long-term national security depends on scientific leadership. That investment strategy paid dividends for decades, helping establish the technological advantages that underpin U.S. economic and military power today. But the institutional architecture in the United States that sustained those advantages is now under growing strain.
Congress rejected similar cuts last year, maintaining relatively stable funding for most science agencies. This year, some congressional appropriators are similarly pushing back, while others are exploring moderate cuts—an improvement over the administration’s proposed deep reductions, yet one that still risks weakening the nation’s scientific and technological edge over time. At a moment when strategic competitors are accelerating their investments in science and technology, the United States cannot afford to do the opposite. Sustaining technological leadership—and the national security advantages that come with it—requires consistent, long-term commitment to federal R&D funding.
The FY 2027 budget proposes deep cuts to federal R&D, threatening U.S. technological, economic, and national security leadership. As China expands state-backed research investments, reducing support for basic and use-inspired science risks weakening America's innovation edge.
