NASA Spending Under the Sequester

News broke this week that NASA is having to alter its behavior in response to the sequester—

Well, it looks like it’s finally happened: the U.S. sequester – a “series of across-the-board cuts to government agencies totaling $1.2 trillion over 10 years” (CNN) — has finally hit NASA… right where it hurts, too: in public outreach and STEM programs.

In an internal memo issued on the evening of Friday, March 22, the Administration notes that “effective immediately, all education and public outreach activities should be suspended, pending further review. In terms of scope, this includes all public engagement and outreach events, programs, activities, and products developed and implemented by Headquarters, Mission Directorates, and Centers across the Agency, including all education and public outreach efforts conducted by programs and projects.”

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In total, the cuts equal approximately $1.2B off of NASA’s $17.8B in planned spending, or about a 7% decrease. Not only will the cuts slash outreach, they will also threaten on-going modernization efforts and technology research. Basically, it will slow both NASA’s core operations as well as its ability to inspire study in the math and sciences, something that we are currently struggling with as a nation (I wonder how many people are engineers today because of the Apollo program or the space shuttle program…).

While a 7% haircut may adversely affect agency operations for the current year, it is worth placing this in the longer term context of the erosion of finance support for NASA since the mid-90s, and really, since the end of the Apollo program. Sequester related cuts are miniscule in comparison to the stagnation of spending in real dollars for the past few decades. NASA will have to make adjustments to its plans, but its activities already pale in scope and magnitude compared with some of the projects that it has taken on in the past.

For historical comparison, I have looked at NASA spending since its inception in 1958 as compared to the overall level of Federal spending. While it is to be expected that spending would be lower than at the height of our stretch towards the moon, it is striking how spending has decreased from 1% of the Federal budget throughout the 80s and 90s, to nearly 0.4% today. Federal priorities have clearly shifted elsewhere, and in my opinion, to our detriment.

Of all the economic markets that the Federal government invests in, subsidizes, and stimulates with other regulatory tools, spending on space exploration is no longer a focus. However, the unique mix of extreme long-term nature of returns, high levels of risk, and distributed economic and social benefits provide a more obvious probable cause for spending on NASA than on almost any other market; the case for government intervention is comparatively strong. 

For every $1 spent on NASA, typically about $2.1 is added to the economy in revenues, a high multiplier compared to other economy jump-starting spending – for instance, tax cuts typically have a spending multiplier of 1.0 to 1.3. Additionally, many of these dollars go to high tech and infant industries; some of the many beneficiaries during the Apollo program were the semiconductor and computer industries. I wrote a long paper long ago on some more of these issues – but my point is, even a typically free market aficionado can see some of the enormous benefits of the funding of space program in the public sphere, and the relative inability of the private market to fill the void left by the loss of public spending. 

If NASA spending were held at the historical 1% level, we would be spending more than double on NASA this year ($38B). In the most (perhaps recklessly) optimistic scenario, with budget allocation equal to the 1966 peak, NASA would be nearly $170B of spending today. In either event, the American people would be achieving much more than we are today, and pushing more of the boundaries of our exploration.

I am hopeful of changes to this policy at some point in the future, although I doubt we will raise spending in the near term. In our current political reality, it will take some strong form of catalyst to push us against the current inertia.

In later posts, I want to dig into some of the specifics of the benefits of NASA spending and why it is a good endpoint for Federal funds.

I have included the budget numbers below for those curious to see how the budget of NASA has unfolded over the years.


Let me know your thoughts!