Innovation Lightbulb: Visualizing Proposed Cuts to Federal R&D Funding

As Congress finalizes the Fiscal Year 2026 (FY26) federal budget, one area facing major cuts is federal research and development (R&D) funding. The President's FY26 budget proposal, released in May, requests a 22 percent cut to federal R&D funding, including a 36 percent decrease to non-defense R&D funding. The National Science Foundation (NSF) faces the steepest cuts at 56 percent, followed by the National Institutes of Health (43 percent) and the U.S. Geological Survey (38 percent). The Department of Defense’s R&D budget faces a six percent cut, which would be offset by provisions in the recently passed budget reconciliation bill. 

These cuts are especially concerning given the unique role of federally funded R&D. While private companies tend to focus on applied research and experimental development with clear commercial goals, the federal government plays a critical role in supporting basic research—advances in science that increase our foundational knowledge. This kind of early-stage research is harder to directly commercialize, which deters private investment, yet it is vital to the U.S. innovation ecosystem. Since World War II, the U.S. federal R&D enterprise has powered advances in everything from medicine and clean energy to GPS and the internet. 

Indeed, federally funded R&D provides considerable economic benefits. Though precise estimates vary, some studies suggest that each dollar of federal R&D spending returns over five dollars in economic growth. Others argue the return is higher still, particularly when accounting for non-economic benefits such as increased lifespans. Even when it does not yield immediate results, federally funded R&D lays the groundwork for future discoveries, innovations, and industries that power the U.S. economy. 

What’s more, increasing overall defense spending while cutting funding to science agencies misses the fundamental connection between R&D and national security. The NSF, for instance, has been a quiet engine of U.S. power for decades, catalyzing discoveries and inventions that have defined the modern world, from wireless communications to radar, explosive detection systems, and supercomputers. NIH supports R&D for medical countermeasures against threats from infectious diseases, radiation exposure, and chemical weapons, while the DOE supports research on nuclear weapons, nonproliferation, and energy security. Without steady funding to these “non-defense” agencies, U.S. civilians and soldiers will be less secure. 

The U.S. federal R&D enterprise certainly has room for reform, particularly as emerging fields like quantum computing and artificial intelligence promise to make research more productive. But deep and broad-based reductions risk slowing progress, weakening talent pipelines, and shrinking the pool of breakthrough discoveries that fuel long-term economic growth and national security. Indeed, while FY2026 remains months away, federal grant distribution rates have already dropped, leaving promising research unfunded. Meanwhile, global competitors are working to attract U.S.-trained scientists to build up their own innovation ecosystems.  

Despite the President's request, the responsibility for these funding decisions lies with Congress. Some Congressional committees are proposing cuts, albeit at less severe levels. Yet others have signaled that they will push back on cuts altogether, recognizing that the U.S. R&D enterprise has long been a strategic advantage. Especially as other nations increase their R&D funding, the United States cannot afford to give that advantage away. 

Data visualizations by Fabio Murgia