As we enter the second decade of the 21st century, we are rapidly approaching a collision between the United States’ research and education investments and the seemingly inexorable growth of federal and state entitlement programs. Since these investments have been crucial to fueling the country’s economic growth, the competing demands for federal and state dollars could result in a downward spiral of slower economic growth, which in turn would lead to further reductions in research and education funding. It is a path away from the sustained economic growth that the United States has enjoyed since the Second World War, toward the lower growth rates and higher unemployment rates seen in Europe.
The increased role of the federal government in funding research began after World War II. After several decades of investment, the United States achieved a commanding position in most fields of science and engineering and produced discoveries that led to the creation of new industries, many companies and millions of jobs.
Despite strong bipartisan support for research in Washington, the increasing inability to control the federal deficit and the growth of entitlement programs make such investments less likely in the coming years. In June 2010, the Congressional Budget Office estimated that the federal debt would equal 62 percent of the nation’s gross domestic product—a level of debt unseen in this country since the end of the Second World War. By somewhere between 2040 and 2050, assuming that tax revenue is equal to the same fraction of GDP it is today (a fraction remarkably stable except in wartime), the combination of Medicare, Social Security, Medicaid and interest on the national debt will consume 100 percent of tax revenue. There will be no money for national defense, roads, education or research investments. The current situation is simply unsustainable.
But there is hope. In their book, Putting Our House in Order, faculty members George Shultz and John Shoven propose a number of solutions. Among them: Find ways to increase the economic pie via improved K-12 education, enlightened tax and immigration policy and the removal of disincentives for long careers. This will help meet the costs of health care and Social Security programs, which serve as a safety net for so many. But we must also find better ways to reduce the growth of health care spending, likely by focusing on preventive care and better efficiency and effectiveness in the use of health care dollars.
Education and research—and the resulting discoveries and innovations—are key both to driving economic growth and to improving people’s quality of life. As Secretary Shultz noted in a 2008 interview, people are living longer and healthier lives as a result of “research about the human body, medications that help diseases and diagnostic techniques. . . . This comes from basic research, supported by the National Institutes of Health. It is a tragedy that the NIH budget . . . has not kept pace with inflation over the last three to five years. It has cooled off burgeoning research centers in universities that were making advances that really mattered. . . . The first thing is to get back to supporting our scientific budget.”
If we succumb to increasing pressure to shrink research funding—or opt for earmarks and move away from peer review and meritocracy on which U.S. higher education is based—both this nation’s research leadership and its long-term economic growth will be critically damaged.
I believe fervently that the United States must find a way to balance competing demands and support its research universities. They will be the wellspring for innovation and new economic opportunities in this century.
