Biden unveils historic $325B research and innovation plan

01 Apr 2021 | News

Massive R&D proposal is part of US President’s ‘once in a generation’ $2.3T infrastructure plan – but opposition will be intense in Congress

US President Joe Biden.

US President Joe Biden on Wednesday unveiled a massive $325 billion research, innovation and pandemic preparedness plan that, if signed into law, would see the country’s biggest increase in its federal non-defence R&D spending on record.

The spending is part of a sprawling $2.3 trillion infrastructure-investment proposal, called the American Jobs Plan, that would direct billions over eight years to initiatives such as charging stations for electric vehicles, boosting broadband coverage, eliminating lead water pipes and repairing ageing bridges. The main plan faces near-unanimous Republican opposition; but historically, science funding often gets broad, bipartisan support in Congress, so odds are that at least some of the R&D proposals will survive the coming months of legislative infighting.  

In announcing his broad plan, Biden said the research and innovation funding is targeted at areas where the US is falling behind China and other competitors, such as on semi-conductors and batteries. But there’s also big money reserved for closing investment gaps at home, with billions earmarked for historically black colleges and universities and other minority-serving institutions.

“It’s not a plan that tinkers around the edges. It’s a once-in-a generation investment in America, unlike anything we’ve seen or done since we built the interstate highway system and the space race decades ago,” the Democratic President said in a speech in Pittsburgh, Pennsylvania.

The President said he wants to “boost America’s innovative edge in markets where global leadership is up for grabs — markets like battery technology, biotechnology, computer chips, clean energy, the competition with China in particular.”

Under the proposal, the US would invest $35 billion to boost clean technologies, with some of this money used to launch the new Advanced Research Projects Agency-Climate out of the Department of Energy; invest $50 billion in semiconductor manufacturing and research; spend $40 billion to upgrade ageing lab facilities; give a huge, $50 billion top-up to the National Science Foundation; and devote $174 billion to overhaul the American electric car market.

Plan dwarfs EU, UK efforts

The radical research plan – which not everyone saw coming from a politician once described as a moderate, down the middle sort – stands out for its ambition next to recent efforts in Brussels or London. In the European Union, officials have been congratulating themselves for getting less than half as much research money through a still-unfinished approval process. And in the UK, scientists are rising up against a government that recently pulled global research funds, and appears on the verge of more slashing. The example of Biden’s R&D plan could reopen those European debates.

The US spending, the largest injection to the economy since World War II, which comes shortly after Biden’s $1.9 trillion COVID-19 relief package, would be partially offset by raising taxes on businesses.

Pushback from the opposition Republican Party was immediate, in a sign of the tough battle ahead for the plan, which needs approval from Congress. Former President Donald Trump called Biden's plan a “massive giveaway to China, and many other countries, that will send thousands of factories, millions of jobs, and trillions of dollars to these competitive nations.” Senate Republican leader Mitch McConnell said he would not support tax hikes or deficit spending in the bill.

It’s not only Republicans who are worried about higher taxes. The Information Technology Industry Council, which represents tech businesses, warned in a statement that the plan’s goals should not come at the expense of “weakening the United States’ internationally competitive tax policies”.

Democrats, meanwhile, praised the plan. House Speaker Nancy Pelosi, called it "a visionary, once-in-a-century investment in the American people and in America’s future" that will "turbocharge America’s global competitiveness." Progressive politicians and some climate groups, meanwhile, say Biden’s plan falls far short of the promised Green New Deal, which proposes the US hit net-zero emissions by 2030. “This is not nearly enough,” tweeted Democrat Representative Alexandria Ocasio-Cortez.

Naturally, academic and research organisations were effusive in praise. “There’s a lot to like,” said Matt Hourihan, director of R&D budget and policy programme at the American Association for the Advancement of Science.“ According to Barbara Snyder, president of the Association of American Universities, “This proposal would help undo years of neglect to the foundation of America’s scientific and innovation leadership.”

Andrew Rosenberg, a director at the Union of Concerned Scientists advocacy group, said he was “really impressed” by the proposal. “In particular, the recognition that not only must we bolster research to re-invigorate the economy, but that we need to focus on diversifying the science workforce to really reach our potential is great to see,” he said.

The industry reaction is complicated, however – and given the outsize influence of big business in Congress, could determine the legislative outcome. Generally, science-based industries such as pharma and digital favour bigger federal science budgets – but they will oppose higher corporate tax rates or the new international-tax collection plans. Then there’s the huge American fossil fuel industry, targeted by the renewables and climate work.

“Investments in wind turbines and solar panels divert resources from more reliable and efficient fossil fuels and nuclear power that have produced unprecedented prosperity for the United States and the world,” read an analysis from Washington DC-based think tank the Institute for Energy Research. “China and Mexico have recognised this and are not falling in the renewable energy trap that Biden is pushing for the United States.”

Research pump

In his speech, Biden spoke about how US spending on research has declined over the last 25 years, from 2% of GDP to today’s “seven-tenths of 1%.” According to the Organisation for Economic Cooperation and Development, US government R&D spending since just before the 2008 financial crash has risen more slowly than the average in developed countries: 5% for the US, against nearly 15% for the OECD generally. (Germany, under the leadership of science fan Angela Merkel, is up more than 50%.)

As Biden put it: “We’ve fallen back.  The rest of the world is closing in and closing in fast.”

The President spoke positively about how American research investment has transformed the world.

“Pushing the frontiers led to big benefits back home,” he said. “When NASA created Apollo’s digital flight control system — unheard of at the time — it led to technologies that help us today to drive our cars and fly our planes.”

“Computer chips allow us to see and talk to one another, even when we’re separated by mountains and oceans – singing ’Happy Birthday”’ and watching the first steps of that new baby grandchild; comforting each other when comfort is needed,” he added.

In his appeal to Republicans to get behind the plan, Biden regularly raised the spectre of Chinese competition during his speech.

“I don’t think you’ll find a Republican today in the House or Senate — maybe I’m wrong, gentlemen — who doesn’t think we have to improve our infrastructure.  They know China and other countries are eating our lunch.  So there’s no reason why it can’t be bipartisan again.”

Spending in detail

A fact sheet issued alongside the plan targets $180 billion specifically for “R&D and the technologies of the future,” along with an additional $145 billion in research and innovation-related areas ranging from combating pandemics to boosting innovation hubs.

Under the proposal, $50 billion would go to the National Science Foundation, with some of that money used to create a technology directorate to focus on fields like semiconductors and advanced computing, advanced communications technology, advanced energy technologies, and biotechnology.

The plan also offers $35 billion for a smorgasbord of energy- and climate change-related initiatives, which includes money for the new ARPA-C funding agency, and general across-the-board funding increases for research. The agency appears modelled on ARPA-E, an agency created nearly 20 years ago to provide competitive funding for energy technologies, aspects of which are being emulated by both the UK and EU in their own R&D plans.

The focus on backing green tech is significant, “because I have come to believe that it is far more likely that the US and the rest of the world will reduce carbon emissions through technological solutions than through the use of ‘sticks’ like a carbon tax,” said David Besanko, a professor of regulation and competitive practices at Northwestern University.

Also proposed is $15 billion on demonstration projects for climate R&D priorities such as utility-scale energy storage, carbon capture and storage, hydrogen, advanced nuclear, rare earth element separations, floating offshore wind, biofuel/bio products, and electric vehicles.

Targeting ‘underserved areas’

Biden also proposes to direct research investment toward rural communities and communities of colour, including establishing a national climate lab affiliated with an historically black university. The plan’s focus on diversity is the first dollars-and-cents evidence of Biden carrying through on his promise to apply science to redressing inequalities – and coincides with the EU and UK also starting to look more carefully at the role of science in curing or worsening social divides.

“A striking feature of the American Jobs Plan is the intentional effort to diversify who is included and who benefits from our nation’s investments in science, education and research,” said Rachel Cleetus, a policy director at the Union of Concerned Scientists. “These long overdue and necessary investments can help address long-standing inequities and discrimination in access to science funding.

In detail, the President calls for $40 billion to upgrade research infrastructure in labs across the country, including brick-and-mortar facilities and computing capabilities and networks. Half of these funds – which would be allocated across the federal R&D agencies – would be reserved for minority-serving institutions, including the more than 100 historically black colleges and universities.  

Biden calls for a further $10 billion in R&D investment at these institutions, and an additional $15 billion to create up to 200 centres of excellence that serve as research incubators to provide fellowships and other opportunities for “underserved populations”.

According to the White House briefing, “persistent inequities in access to R&D dollars and to careers in innovation industries prevents the US economy from reaching its full potential.” Half the jobs in America’s high growth, high wage sectors are concentrated in just 41 counties, a briefing paper said.

Some $30 billion in Biden’s plan represents “additional funding for R&D that spurs innovation and job creation, including in rural areas.”

Chips, pandemics, innovation hubs

Biden wants $50 billion for semiconductor manufacturing and research, and $14 billion for the $1-billion-a-year National Institute of Standards and Technology. The plan says the money will allow the institute to “bring together industry, academia, and government to advance technologies and capabilities critical to future competitiveness.”

A sum of $30 billion is proposed over four years to shore up the country’s defences against future pandemics, with investment foreseen in the strategic national stockpile, alongside research into therapeutics and new vaccines.

The president wants $20 billion for a Community Revitalisation Fund, with the aim of growing “at least ten regional innovation hubs”, and $31 billion in programmes that give small businesses access to credit, venture capital, and R&D dollars.

Electric charge

Alongside the specific research and innovation spending outlined in the jobs plan, Biden’s proposal includes $174 billion to transform the American electric car market.

The plan “will enable automakers to spur domestic supply chains from raw materials to parts, retool factories to compete globally, and support American workers to make batteries and [electric vehicles].” According to a White House memo, the US market share of plug-in electric vehicle sales is only one-third the size of the Chinese market.

There will be buyer rebates and tax sweeteners for American-made electric cars, and grant programmes for state and local governments and the private sector to build a national network of 500,000 chargers by 2030.

The proposal also aims to replace 50,000 diesel vehicles and electrify at least 20% of the country’s yellow school bus fleet, while transforming the huge government fleet into electric and hydrogen vehicles.

Under the proposal, there’s also $50 billion to climate-proof buildings. In 2020, the US endured 22 separate billion-dollar weather and climate disasters, costing $95 billion in damages to homes, businesses, and public infrastructure, a briefing paper said.

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