White House Calls for Science Funding Shake-Up

The US research enterprise too heavily centers on elite research institutions, and fails individual researchers with bold ideas, suggests the White House Office of Science and Technology in a new report. The office recommends sweeping changes to where federal funding is spent and how it should be awarded.

Released on July 21, the Science: A New Golden Age report seeks to update Vannevar Bush’s landmark 1945 report Science: The Endless Frontier for the modern era. In the report, OSTP Director Michael Kratsios argues that today’s scientific landscape — shaped by AI, global competition, and private-sector investment — requires a fundamental redesign of how the federal government funds research.

OSTP published the report the day before Kratsios appeared before the House Science Committee to answer questions about the Trump administration’s science policy agenda and research funding priorities for the next fiscal year. While Republicans on the committee broadly welcomed the administration’s focus on innovation, AI, and research security, Democrats on the committee were highly critical of the administration’s approach, noting major disruptions to research grants and questioning whether OSTP is improperly influencing NSF research decisions by redirecting funding and overriding the agency’s award decisions. Kratsios denied any OSTP involvement in reviewing individual National Science Foundation grants, despite Rep. George Whitesides (D-CA) stating that his office had received information to the contrary. NSF did not respond to a request for comment on whether political appointees are currently involved in grant decisions.

Kratsios’ report argues that increased research spending has not translated to more breakthroughs, stating that “a growing body of work” demonstrates that “researchers are fighting against an increasingly calcified system that has driven up the cost of scientific progress over time.” To address this, the report recommends that agencies “compress review cycles, eliminate duplicative reporting, and rein in indirect cost recovery that supports administrative bloat, redirecting that money to real scientific infrastructure.”

The report calls for institutions to reduce research overhead costs, describing the current indirect cost rates at major institutions as a “substantial tax on research budgets.” Indirect costs cover expenses that support research, such as equipment and facilities maintenance, IT services, and administration. Universities negotiate these rates with the government as a percentage of direct costs. For example, an indirect cost rate of 50% means that for every dollar awarded as part of a research grant for eligible direct costs, the institution could receive up to an additional 50 cents to cover indirect costs.

The report is also critical of scholarly publishing and peer review, stating that a “small number of anonymous, unpaid reviewers who may have vested interests, limited expertise, or simply not enough time, determine what counts as legitimate science.” AI, the report says, is poised to transform this system, making it “trivial to generate more papers, more grant applications, and more submissions to peer review.” However, the report warns that “even the most capable AI models will be slowed down in the bottleneck of institutions and systems built for the last century.”

Key recommendations in the report include prioritizing individual scientists over “a narrow set of legacy institutions,” with greater support for other kinds of research institutions such as startups, independent research organizations, and NSF’s recently launched X-Labs initiative, which supports research teams from a wide variety of organizations. The report also recommends more experimental funding approaches, including “golden tickets” that would let technical reviewers at individual agencies recommend “unconventional proposals that may not pass consensus-driven review panels” — a model that the report says is being piloted at NSF’s Technology, Innovation and Partnerships Directorate.

Also on July 21, Kratsios and White House Office of Management and Budget Director Russ Vought jointly published a memorandum on the Trump administration’s R&D budget priorities for fiscal year 2028. The memo instructs science agencies to incorporate the administration’s priorities into their forthcoming budget requests, as well as develop implementation plans within 90 days for a series of “R&D priority practices.” Those include:

• Developing new research funding mechanisms;
• Identifying and supporting top tech talent through, for example, early career and STEM-learning opportunities;
• Boosting the “science of science-funding” to evaluate which programs have the greatest impact;
• And collaborating with industry to drive greater private investment in R&D.

The memo directs agencies to rebalance their portfolios toward foundational research, and prioritize physical science over life science. Many of the administration’s priorities, including AI and nuclear fission, are dependent on computer science, physical science, and engineering, but the report notes that the latter two fields’ share of the federal research portfolio has declined over time, even as their strategic importance has grown.