Despite Increases, Congress Comes Up Short on Science Funding

Figures courtesy of AIP

After months of negotiation between the House and Senate, Congress passed its fiscal year 2023 omnibus spending bill just before the Christmas break, appropriating $1.7 trillion to federal agencies. The bill boosts defense funding by 10% to $858 billion and domestic spending by 5.5% to $773 billion. Prime Movers Lab is excited that the legislation broadly increases the budgets of science agencies but is disappointed that it falls short of the targets authorized in the CHIPS and Science Act of 2022 (CHIPS) and President Joe Biden's requested funding levels.

What does this mean for founders of breakthrough science startups? There will be more non-dilutive capital and government contracts that startups can pursue than in past years. However, founders should make their voices heard with their respective state delegations and trade associations to make sure Congress appropriates funds at authorized levels for FY2024. Science and technology funding need to remain a top priority heading into the presidential race.

Here are some key provisions from the appropriations bill that breakthrough science founders should take note of and start working with agencies to find opportunities:

Department of Energy

Scientific Discovery and Competitiveness with China: The bill provides $8.1 billion in new directed funding for the DOE’s Office of Science, which is $625 million more than in 2022. This funding will help implement key provisions of CHIPS to advance semiconductor manufacturing and other technologies in the US.

Renewable Energy: The bill also provides $3.46 billion to the Office of Energy Efficiency and Renewable Energy (EERE) — a $260 million increase — to advance “vehicle technologies, hydrogen research and development, marine, wind, and solar energy, weatherization assistance programs, and renewable grid integration.” In addition, the bill provides $89 million for the recently established Office of Clean Energy Demonstration (a $68 million increase) to deploy clean energy projects at scale to reduce emissions.

Nuclear Energy: The legislation includes $1.773 billion for nuclear energy research and development, including fusion technologies. This is exciting given the net-energy gain milestone achieved by the National Ignition Facility (NIF) last year. The funding could help portfolio companies like Focused Energy that are working to commercialize the same fusion approach being advanced at NIF.

Fossil Energy and Carbon Management: DOE will also receive $890 million to support carbon capture and storage projects, including research to turn captured carbon dioxide (CO2) into usable products. Portfolio company CarbonCapture’s direct air capture machines use solid sorbents that soak up atmospheric CO2 when cooled and release concentrated CO2 when heated. The captured CO2 can then be permanently stored underground or used to make synthetic fuels, low-carbon concrete, carbon black, or other industrial products that require clean CO2. We’re excited to see other breakthroughs in this space emerge in the coming years.

Department of Commerce

CHIPS and Science Act: The real-world impact of CHIPS will soon be seen as the money finally gets appropriated. The omnibus bill provides $1.8 billion in new funding to implement CHIPS, which was meant to double funding for science and technology programs by 2027. If Congress continues to appropriate funds at the levels they did in this year’s omnibus, we’ll fall far short of that goal, especially as the new Republican-controlled House looks for new ways to reduce spending. Nonetheless, these levels do represent a major investment in fields like artificial intelligence, quantum computing, microelectronics, clean energy, and advanced communications.

National Science Foundation: The NSF will get a 12% increase in funding ($9.54 billion in the CJS Appropriations bill and $335 million in supplemental funding), which is the largest dollar increase in its history. The funding includes $7.8 billion for NSF research, an increase of $680 million (9.5%), to implement CHIPS and support the new Directorate for Technology, Innovation, and Partnerships. NSF’s education and training programs will receive $1.37 billion, an increase of $365 million (36%).

National Institute of Standards and Technology: The bill increases NIST funding by $424 million (34%) to spur research advances in cutting-edge fields like CO2 removal, artificial intelligence, quantum information science, and cybersecurity. This increase could greatly benefit portfolio companies like Atom Computing and CarbonCapture that are developing these cutting-edge technologies.

NASA: To advance American leadership in space, the bill provides $25.4 billion for NASA, which is a $1.34 billion increase compared to last year. NASA dodged a bullet because if Congress had signed a continuing resolution (keeping funding levels the same), it would have fallen behind on its commitments to support the International Space Station and the Artemis program. Here are other key line items that could advance the work of portfolio companies like E-Space:

• NASA Science is funded at $7.8 billion (a $181 million increase);
• Aeronautics is supported at $935 million (a $54 million increase) to ensure continued U.S. leadership in aviation and invest in sustainable aviation technologies;
• For human space flight, the bill supports funding to continue the ISS, launch American astronauts on American commercial vehicles, and build new commercial low-Earth Orbit destinations in partnership with private sector companies like Axiom Space;
• The bill includes significant resources to help return mankind to the Moon, including $1.3 billion for Orion, $2.6 billion for the Space Launch System, $799 million for ground systems, $1.49 billion for lunar landers, and $779 million for the Gateway. This funding could help portfolio companies like Quantum Space become integral players as mankind returns to the moon and beyond in the near future.

Department of Defense

Space: In addition to NASA’s funding, the bill includes an additional $2.2 billion for “space procurement, operation and maintenance, and research and development initiatives” as part of the Department of Defense’s budget. This includes research into emerging threats such as hypersonic vehicles. Additional funding that could benefit portfolio companies includes:

• $442 million for an additional Wideband Gapfiller Satellite for additional high-data rate military satellite communication services;
• $306 million across the space science and technology portfolio to advance research and technology;
• $216 million to procure two additional launches to accelerate the distribution of low-earth orbit satellites for the missile warning and missile tracking mission.

Hypersonics: As readers know, we backed hypersonic engine and aircraft developer Venus Aerospace so we were excited to see an additional $1.1 billion included to modernize the nation’s critical test and evaluation infrastructure for emerging technologies like hypersonics. Separately, as part of the Missile Defense Agency’s funding, Congress appropriated an additional $292.5 million to accelerate the development of hypersonic defenses.

Department of Health and Human Services

Medical Research: The bill provides $47.5 billion for the National Institutes of Health (NIH), an increase of $2.5 billion (5.6%) to advance science and speed the development of new therapies, diagnostics, and preventive measures. Highlights include targeted investments, including:

• $226 million for Alzheimer’s disease and related dementias;
• $60 million to support the second phase of the BRAIN initiative;
• $65 million for NIH’s Common Fund to make “goal-driven, high-risk/high-reward investments with the potential for extraordinary impact.”
• The bill includes $1.5 billion for the second year of Advanced Research Projects Agency for Health (ARPA-H).
• These increases include $950 million (a $200 million increase), for the Biomedical Advanced Research and Development Authority (BARDA).

While it is reassuring to see science agencies get funding increases at rates that exceed other domestic programs, leaders across the breakthrough science ecosystem must continue to pressure their representatives to back these programs at authorized levels. This funding shortfall could have a dramatic impact on American innovation and competitiveness if allowed to continue. To find your local representative and send them a note, click here.

Prime Movers Lab invests in breakthrough scientific startups founded by Prime Movers, the inventors who transform billions of lives. We invest in companies reinventing energy, transportation, infrastructure, manufacturing, human augmentation, and agriculture.

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