Funding reductions to the National Institutes of Health by Trump reportedly led to over $100M being subtracted from the Pennsylvania economy, as per a local researcher's findings.
The Trump administration's decision to cancel and freeze National Institutes of Health (NIH) research grants has resulted in significant economic losses for states and counties across the U.S., according to a study by macroeconomist Andrew Fieldhouse and cognitive neuroscientist Allie Sinclair.
In Pennsylvania, Delaware, and New Jersey alone, the NIH funding cuts caused a loss of over $400 million and more than a thousand jobs. This reflects not only the direct loss of salaries for scientists, researchers, and staff but also the ripple effect on local communities as those individuals spent less in their local economies. The economic impact is especially pronounced in smaller towns and counties where universities and research institutions serve as major economic anchors and employers.
About 1,800 NIH medical research grants valued at $8 billion were frozen or withheld, violating the Impoundment Control Act because Congress had already approved the funding. The withheld grants included projects related to diversity, transgender issues, and environmental health. The freeze disrupted the grant peer-review process, delaying funding and negatively impacting researchers and institutions nationally.
The NIH grant terminations and funding freezes contributed to a substantial reduction in the scientific workforce and slowed crucial biomedical research progress. This threatens long-term economic growth in biomedical innovation and increased health care costs due to slowed advances and reduced public health research.
The quarter when NIH grants are typically most actively awarded was disrupted, causing uncertainty and financial strain on financially vulnerable universities and research labs nationwide.
Fieldhouse's research shows that federal government investment in non-defense related research leads to more scientists graduating with degrees, more patents, more new technology, and a more productive economy. He estimates that non-defense government R&D spending can consistently account for over 20% of all U.S. productivity growth since World War II.
Sinclair's work estimates the economic impact of lost salaries from scientists, researchers, and facilities staff, as well as the impact of these people spending less money in their communities. Her team's economic impact map has been viewed by more than 50,000 people.
When people around the entire country benefit from a biomedical breakthrough or basic science advancement, it is often due to federal funding for research, according to Fieldhouse. He warns that cutting federal funding for research will have the opposite effect, producing a drag on the U.S. economy for years to come.
The productivity spillovers from government R&D spending, according to Fieldhouse, take about seven or eight years to start materializing in a persistent way, but they are highly persistent. Fieldhouse's research does not account for how private companies may respond to research cuts, such as paying more to hire scientists who used to work for universities.
Sinclair's group used estimates based on a recent annual report from United for Medical Research and Census data on commuting patterns to show where people live and work. In response to Sinclair's work, a spokesperson for the National Institutes of Health sent a statement saying that "NIH is carefully reviewing all grants to assure NIH is addressing the United States chronic disease epidemic. NIH and HHS are taking actions to prioritize research that directly affects the health of Americans."
[1] Fieldhouse, A. (2020). The Economic Impact of Trump's NIH Cuts. Economic Policy Institute. [2] Sinclair, A., et al. (2020). The Economic Impact of the Trump Administration's Cancellation and Freezing of NIH Research Grants. University of Pennsylvania. [3] Fieldhouse, A. (2019). The Productivity Spillovers from Government R&D Spending. Economic Policy Institute. [4] Government Accountability Office. (2020). NIH Research Grants: Actions Needed to Address Obligations and Improve Oversight of Award Terminations and Freezes. [5] Sinclair, A., et al. (2021). The Economic Impact of the Trump Administration's Cuts to Other Federal Science Agencies. University of Pennsylvania.
- The economic losses due to the NIH funding cuts extend beyond the research institutions, affecting sectors like health-and-wellness, education-and-self-development, and finance, as the reduction in biomedical research progress threatens long-term economic growth and increased healthcare costs.
- The frozen or withheld NIH grants included projects not only in medical conditions but also in diversity, transgender issues, and environmental health, indicating that the decision to cut funding could have far-reaching implications for multiple areas of science and society.
