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The Need for Federally Funded Research Amid Political Volatility

January 20, 2026

The Need for Federally Funded Research Amid Political Volatility

Political volatility and deep budget cuts are weakening federal research agencies and eroding institutional knowledge. Discover why federally funded research is essential to innovation, health, and U.S. competitiveness.

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The United States is at a critical crossroads: Political instabilitydeep budget cuts and escalating turnover within federal research agencies are accelerating the erosion of institutional knowledge—an often invisible but foundational asset for American innovation. Federally funded research is not an optional expenditure or academic luxury; it underpins national health, security, economic competitiveness and public welfare. Without sustained investment and structural stability, the accumulated expertise built over decades is at risk of diminishing. 

Why Federally Funded Research Matters

Federally funded research has historically served as a catalyst for breakthroughs across medicine, energy, climate science, computing and national defense. Government support fills critical gaps that private markets cannot: high-risk basic science, long-term data collection, and infrastructure that creates the conditions for breakthrough technologies.

  • Federal grants through agencies like the National Institutes of Health (NIH), National Science Foundation (NSF), Department of Energy (DOE) and the National Aeronautics and Space Administration (NASA) have helped define U.S. global leadership in scientific discovery and technology development.
  • Federally funded research drives innovation that jump-starts new industries. For instance, the Bayh-Dole Act, a landmark federal law, allows universities, nonprofits and small businesses to own and commercialize inventions developed through federal research funding. The Bayh-Dole Act’s policies enabling universities and businesses to commercialize discoveries from federal research have fueled the creation of thousands of startups and new products since the 1980s.

A strong research environment also strengthens economic growth: One analysis found that cutting federal research and development by 20 percent could reduce the U.S. GDP by up to nearly $1.5 trillion over 10 years while lowering tax revenues due to slower productivity gains. 

Public Health and Funding

In addition to the economic benefits of federally funded research, this research has also played a pivotal role in public health. For example, NIH-supported research laid the groundwork for mRNA vaccine technology and countless therapies for cancer, infectious diseases and chronic conditions. Further, federal investment supports clinical trials, long-term health studies and a workforce trained to respond quickly to emergent health crises.

Federally funded research has historically served as a catalyst for breakthroughs across medicine, energy, climate science, computing and national defense.

Though federal funding for public health research plays an important role in understanding how to keep communities healthy, disruptions to this funding can halt this work. In 2025, for example, over 74,000 clinical trial participants were affected when NIH funding was abruptly halted, delaying or stopping studies on critical diseases, including cancer and infectious illnesses. 

These disruptions underscore how essential stable federal support is, not only to advance lifesaving research, but to ensure that critical studies continue uninterrupted for the patients and communities whose health depends on them.

Climate and Environmental Monitoring

Government research agencies also maintain vital climate and environmental observation systems, capabilities that the nation depends on to prevent climate risks and track ongoing environmental concerns. 

Through NASA and the National Oceanic and Atmospheric Administration satellites, long‑term ecosystem monitoring networks, and extensive air and water quality databases, federal agencies generate continuous, high‑quality data that underpin everything from weather forecasting and disaster preparedness to environmental regulation and climate modeling. These systems operate at a scale, cost and level of coordination that private entities simply cannot replicate. 

Moreover, federal funding ensures that the resulting data from climate and environmental systems remain publicly accessible, scientifically rigorous and consistent over decades.

National Security and Competitiveness

Federal research and development is also directly tied to national defense, technological leadership and economic growth. For instance, a recent study found that a 25 percent reduction in R&D funding would shrink the U.S. economy by 3.8 percent

Further, the decreasing investment from the U.S. government into key research areas such as competitive technologies comes at a time where the U.S. and China have become rival nations in science and innovation investments. For example, China has set its sights on becoming a global leader in artificial intelligence amid the ongoing battle for AI dominance with the U.S. 

Without renewed federal commitment to robust R&D investment, the U.S. risks ceding both economic strength and technological leadership at a moment when global competition has never been more intense.

Funding Cuts and Their Cascading Effects

2025 saw an unprecedented confluence of political volatility, administrative turnover, and deep budget cuts affecting federal science and research agencies. For example, President Donald Trump’s fiscal year 2026 budget proposal sought steep reductions to non-defense R&D funding, including deep cuts to NIH, NSF and DOE research programs, while increasing defense spending, underscoring a policy shift away from public science investment. 

These cuts have already led to detrimental damage for the research community. For instance, budget cuts have led to disruptions to federal datasets and long-term longitudinal studies relied upon by scientists nationwide; left biomedical labs, universities and biotech startups struggling to sustain research work; and led to delays in innovation pipelines, interrupting environmental, health and sustainability research vital to understanding climate change and community health impacts. 

Disproportionate Impacts on Vulnerable Populations

Cuts to federally funded research do not impact all communities equally. Community-based health research targeting health disparities and underserved populations has been a particular casualty of grant terminations, reducing capacity to address social determinants of health. Reports from research communities indicate hundreds of canceled projects focused on health inequities and LGBTQIA+ health outcomes due to funding decisions. Further, the overall loss of research infrastructure and datasets disproportionately affects smaller universities and community partners that lack alternative funding streams. 

Cuts to federally funded research do not impact all communities equally.

These funding cuts also threaten efforts to improve care in rural areas, address chronic diseases in marginalized communities and gather vital data on environmental exposure impacts.

Loss of Institutional Knowledge 

Beyond budgetary effects from federal funding cuts, political instability and workforce turnover are eroding institutional memory because experienced researchers and administrators are leaving federal agencies, taking with them deep expertise that often cannot be easily replaced.

This kind of “brain drain” undermines long-running projects like pandemic surveillance networks and longitudinal health studies, efforts that depend not just on funding but also on the accumulated knowledge of generations of scientists and administrators. As these losses compound, the federal research ecosystem becomes increasingly fragile, creating vulnerabilities that extend far beyond individual programs. Institutional fragmentation slows coordination across agencies, weakens oversight, and diminishes the government’s ability to respond swiftly to emerging scientific or public health challenges. 

Without deliberate action to stabilize agency workforces and rebuild institutional capacity, the nation risks not only falling behind in scientific and technological progress but also losing the foundational infrastructure that enables evidence‑based policymaking and national preparedness.

Strengthening Long-Term Federal Investment

Sustaining America’s leadership in research and innovation requires a renewed national commitment to robust, long‑term federal investment. 

To maintain U.S. leadership, policymakers must prioritize restoring and expanding federal R&D capacity. This includes ensuring predictable funding cycles, safeguarding key basic‑research agencies such as NIH, NSF, DOE and NASA, and modernizing public‑access and data‑sharing policies to strengthen transparency and accelerate discovery. Stable investment also supports the broader innovation ecosystem—from STEM workforce development to technology transfer—which remains foundational to national competitiveness in fields like artificial intelligence, biotechnology, advanced materials, energy innovation and public health preparedness.

Finally, everyday Americans have an essential role to play. Public support like civic engagement, communication with lawmakers, and advocacy for science‑based policymaking for federally funded research helps ensure that elected officials understand the economic, health and national‑security stakes. Federal research has long been a public good—with benefits extending far beyond the laboratory. Safeguarding this legacy requires sustained political will, informed public advocacy and a shared commitment to America’s scientific future.

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Christine Irlbeck
Christine Irlbeck is a Manatt Health analyst in the Firm’s New York office. Christine previously worked in project management and strategy as a fellow at Havas Health, working on budget proposals for client accounts, managing scopes for client deliverables, working on creative health marketing... See More
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