This article is from the In-Depth Report Stimulating Science: Following the Recovery Money

Is the Recovery Act Stimulating Science and the Economy?

Most of the National Science Foundation's $3 billion from the stimulus package has been distributed, but hardly any of it has been spent
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So far, $9.3 million for researchers building robotic bees, $1.3 million to hunt for viruses that infect single-celled organisms, and $845,000 to study past climate change in Russia has been doled out. The National Science Foundation (NSF) has been able to fund thousands of new research projects with money from the American Recovery and Reinvestment Act of 2009 (ARRA), aka the economic stimulus package, which was passed a year ago today.

But has this money been as much of a boon to the economy has it has been to science?

When advocating for the bill last January, President Obama called for "investing in the science, research and technology that will lead to new medical breakthroughs, new discoveries and entirely new industries." Progress would not come immediately, he warned, but when he signed the bill, an unprecedented influx of funds funneled to agencies flush with project proposals but lacking the cash to back them. This money set the grant-giving gears in motion, but the research pipeline itself can be prodigiously long.

Although barely a pipette drop of the full $787-billion federal stimulus plan, the NSF's $3-billion portion of the package represented an almost 50 percent boost for its 2009 $6.5-billion budget. "That investment of $3 billion will have an immediate impact on investigators, postdocs, graduate and undergraduate students, and teachers throughout the nation," the agency asserted on its Web site.

Indeed, in the past year, the NSF has allocated some $2.5 billion of its stimulus share, adding 4,599 research-based projects (in addition to facility improvements and educational awards) to its list of recipients.

Only about $136 million of that money has been spent, however. That's about 4.5 percent, which puts the NSF second to last among federal agencies in the percentage of stimulus allocation expended. (The most expeditious spenders include the Social Security Administration and the Railroad Retirement Board, which have shelled out about 88 and 91 percent respectively, and the slowest has been the Department of the Treasury, having spent about 3.2 percent of its $89 billion.)

So where is all of the NSF's stimulus money? It is in university and institutional bank accounts, from which funded researchers will gradually withdraw funds over the duration of multiyear grants and awards to pay for equipment and staff. "The NSF has obligated that money, and it's sitting in the accounts of the awardees," explains Dana Topousis, an NSF spokesperson.

Picking the winners
But before even a single beaker could be bought, the NSF—a funding agency—had to decide which projects would get a piece of the new capital.

"NSF has never had enough money," says Francesca Grifo, a senior scientist and director of the Scientific Integrity Program at the Union of Concerned Scientists. So, although the funds have been a booster for science, it and many other agencies are not set up to handle this processing load. "It's just hard to make the federal bureaucracy move fast," she says.

Between 2003 and 2008 the NSF was able to fund only about a quarter of the research proposals it received. But with the 2009 stimulus funds, that total reached 32 percent (about what it had been with its standard operating budget in 2000) even though the numbers of proposals had increased by thousands.

Last year, the NSF received more than 45,200 proposals, so when the stimulus bill was passed, program officers gave another look to deserving proposals they had not previously had the resources to fund. Some 80 percent of stimulus-backed awards went to projects that had been submitted prior to the act. By contrast, the National Institutes of Health and many other agencies put out a call for new proposals.

NSF staffers made an effort to support investigators who had not previously been granted received awards, funding 2,352 new researchers—about a third of them through the ARRA. But amidst fear of fraud and waste, the agency also had to work carefully to pick proposals that would make wise use of the money. To make all these assessments, NSF staff members worked "around the clock" last summer to select the new awardees, the agency's Topousis says.

Although the agency did not hire extra workers to assess all of the proposals on the receiving end, creating more jobs in the science community was a top priority. "Most of our awards are saving jobs—or creating jobs for graduate and postdoc students," Topousis says.

Some critics have argued that the glut of temporary, low-level research positions in academia have created an impasse in academic institutions, where few can break through to tenure-track jobs in which they can obtain big research grants and run their own laboratories. But others note that in the short term, these positions are helping to translate money for science into a cash injection for the economy—and fast.

"It already does have the immediate impact to attract and hire staff," says Amy Pienta, an associate research scientist at the University of Michigan at Ann Arbor who is using an ARRA-funded NSF grant to evaluate the stimulus's impact on the social sciences. Most of the awards may not be big enough to fund senior-level positions, she says, but many of them will "certainly" help hire "people who are on the front lines of a lot of the work—on data collection, data analysis." She offers as an example her own project, which will hire someone to do computer programming. "We're able to advertise in the community," she says. "That's pretty immediate."

The bottom line is that "universities hire," Grifo says. And the money—whether it creates a new full-time staff position or a part-time student opportunity—will be going directly to people "who are going to spend it to live," Grifo says. "They're using that money immediately to pay their bills." She adds: "With graduate research fellowships in particular…it goes out there quickly."

Not all of the money will stay inside of ivory tower walls. A good chunk of NSF's Recovery Act funds (some $354 million) is going directly to construction expenses for labs and research vessels. So those funds will funnel out more quickly, much like other government construction contracts, to pay for labor and materials.

Speed and accuracy
Despite the NSF's efforts to quickly allocate most of its ARRA monies, science itself can take more time than many other government-funded endeavors. More than $860 million in NSF awards don't expire until 2012 or later, which means that the money will be slowly trickling into the economy for at least three years. And some of the awards are as long as five years, the NSF's Topousis notes.

Many in the research field assert that this is a good way to continuously support and stabilize the economy, but it might seem counter to Obama's assertion that we should "spend our way out of this recession." And when compared with many of the other federal agencies, such as the National Endowment for the Arts (which has spent more than 40 percent of its funds—and allocated all of it), the NSF seems to be far behind the trend.

Nevertheless, the NSF has made clear its stated commitment to getting money out into the economy expeditiously. The agency approved the majority of its stimulus-backed projects by fall 2009 and warned investigators that "if after 12 months no allowable expenditures have taken place, NSF may consider reducing or terminating the award and reallocating the funds," according to the agency's Web site.

Keeping tabs on how this flood of funds is being used has proved to be a challenge for every government agency. "The NSF is generally very thoughtful about how this money goes out the door," Grifo says. As of last fall, however, some $45.3 million from NSF's Recovery Act coffers had already been awarded to institutions that had unfulfilled audit recommendations (suggesting, but not confirming, that some of the money has previously gone to groups with less-than-perfect track records). The agency's Office of the Inspector General also found that about $108 million had already gone to institutions it qualified as "deserving additional oversight."

Of the $31 billion going to science in general (to the NSF, NASA, the National Institutes of Health and others), the government's Recovery Accountability and Transparency Board estimates some $2 billion is likely to be lost to fraud. "Some of it's going to be wasted, no question," says Marc Goldwein, a senior policy analyst for the Fiscal Policy Program at the New America Foundation, nonpartisan public policy institute.

"It's very difficult to spend a lot of money very fast," Goldwein says. "Economists are saying, 'Spend it really fast,' and everyone else is saying, 'Spend it wisely.' And it's very hard to do both."

In it for the long haul
The stimulus's economic success is being measured by financial markets and unemployment reports. But aside from statements of job creation and retention, how can the economic impact of science's contributions be quantified?

"Part of the problem is that it's really hard to have good measurements of something until long after it's done," Goldwein says. And by the time most of the research projects wrap up, the stimulus funds will be long gone.

Therein lies the leap of faith in science's eventual benefits—economic and otherwise. "Some things really take five years," Goldwein says of the longer-term research grants. "It would be silly to give one year and cut them off."

Knowing that another few years of funding are on the way can also give some researchers and administrators the confidence—and ability—to boost the economy more in the short term. "If you expect money later," Goldwein notes, "it can change how you act now." For example, if a scientist knows he or she will have ample funds to run a three-year project, they can offer a three-year position to a postdoc, who might then spend his or her discretionary income more liberally. "There's some economic logic" to it, Goldwein says. "In a lot of sense, it's administrative."

Beyond boosting spending in the present, the science-bound stimulus money can be seen as a down payment for a stronger field down the road. Even if most of the jobs are going to graduate students and postdocs, "those folks come out and you have an investment in their research abilities and their increased marketability for jobs," Grifo says. "We have to look at this as lifting the intellectual boat of our whole society." She adds: "As anyone will tell you, it's hard to know where those gains get reaped down the line. That's the point of basic research."

Matthew Thomas, a professor at the Center for Infectious Disease Dynamics at The Pennsylvania State University who is running a project funded by a $1.8-million NSF stimulus grant to study the impact of climate change on malaria and dengue fever, says most of his money is going to hiring graduate students and postdoctoral researchers. Being able make the four-year-long appointments has had "short-term and immediate benefits," he says. But the rewards will continue to pay dividends into the future, he notes: "There's a longer term legacy for this research." In addition to the new information he hopes the project generates, it will also create "a cohort of trained personnel who will, themselves, [go on] to secure new positions and build their own labs."

Even as the NSF's stimulus funding continues to trickle out into the economy over the coming years, many are already concerned about a precipitous drop in momentum as federal-funded science budgets return to normal operating levels.

As Goldwein points out, however, just because Recovery Act funding drops off doesn't mean that other funding will, too. "If the economy is in good shape," he says, the extra tax revenue might be used to increase the NSF budget and create new programs.

In fact, Obama has proposed another bump to direct science funding in his 2011 budget, penciling in $7.4 billion for the NSF (an 8 percent increase over 2010's total)—although that will still be a broad stroke off from the $9.5-billion total it had to distribute in 2009. But science does not have to be entirely government dependent, Goldwein says. With an uptick in the national economy, he notes, "hopefully there will be ample private funds" to pick up what the government cannot or will not.

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