Elon Musk and the Future of Government Investment in Our Nation’s Future
Elon Musk thought cutting government programs was about deficit reduction. When the “One Big Beautiful Bill” reconciliation legislation passed the House with a $3 trillion price tag, he realized he had been misled and reacted accordingly. His falling out with the President--charitably compared to two kindergartners squabbling; uncharitably compared to two scorpions trapped in a bottle--was a fascinating part of the last few days. And a distraction from more important issues.
It would be wonderful (although not likely) if their feud morphed into what we really need:
A deficit-neutral reconciliation bill that does not gut human services programs or abandon government investment in scientific research and innovation. Hint: more revenue and more judiciously-chosen program cuts will be needed. This more balanced approach can (and should) be justified for what it is: an investment in our nation’s future.
Collective Responsibility and Barriers to Investment
FDA Matters believes we have a collective responsibility to invest in policies that will drive growth and prosperity in the United States--now and in the future. FDA needs to carry out its mission-driven and statutorily mandated responsibilities because it is just such an investment. It is inexplicable how the proposed 40% cut in NIH funding could be justified as supporting investment from either the governmental or private sectors.
Beyond that, we would point to the need for continued investment in our nation’s deteriorating infrastructure; our system of higher education and research institutions; and programs that assure that everyone has access to food, healthcare, and education, which are a prerequisite for individual success.
There are two immediate barriers to continuing and expanding government investments in our nation’s future. First, our nation is $36 trillion in debt, and we are adding another $1.9 trillion in FY 25.[1][2] That cannot go unaddressed any longer[3], even if it takes several years to reach the goal of deficit neutrality in annual expenditures.
Second, DOGE-driven policies and program cuts are not only destroying government investment, but creating uncertainty for the companies, investors, institutions, and individuals who we want to encourage to invest in our nation’s future.
A Call for Renewed Government Investment in Our Nation’s Future
For at least three generations, our country has been driven by the worst possible budget cycle. When in power, Democrats tend to expand government programs (increasing expenditures); when in power, Republicans tend to cut taxes (reducing revenue).
Each approach has popular appeal to certain constituencies. Combined they have left our nation in a precarious position relative to government and private investment:
Financing our $36 trillion debt keeps interest rates higher than they otherwise would be--making investments more difficult and more expensive. Ongoing and future deficit spending will eventually reset bond prices and drive interest rates to higher levels.
The administration’s FY 26 proposals would shrink our national investment in science, proposing a 40% cut to NIH, a 50% cut to CDC, and a 60% cut to the National Science Foundation.
Major research universities are under attack on multiple fronts, including indirect costs, autonomy, and access to foreign scientists and institutions.
The environment for private investment has notably deteriorated.[4] There is a low degree of certainty about the rules and programs that will shape the success or failure of investments. Government agencies are no longer reliable partners. The long-standing cooperative relationship between regulated industries and FDA is under fire. The ever-changing tariff situation makes business planning difficult.
Oscar Wilde famously defined a cynic as "a man who knows the price of everything and the value of nothing". Unless we can reinvigorate our commitment to investing in our nation and its people, cynicism will prevail, and the future is likely to be bleak.
It doesn’t have to be that way. Choosing between deficit reduction and investment in our nation’s future is a false dichotomy. We can have both if we are prepared to make tough choices and ask everyone to pitch in. We are capable of rising to the occasion, reaching a shared goal of a prosperous future.
The best number I can glean from the charts suggests that the House-passed reconciliation bill would reduce this by about $100 to $200 billion in FY 25. Reconciliation changes would add to the deficit in every subsequent year.
Apparently, Elon Musk and I share this view.
The House version of the reconciliation bill would restore tax incentives for research and development, business equipment and debt interest through 2029. The Senate is talking about making those permanent. As proponents assert, these are important pro-growth provisions. However, I consider them “necessary but insufficient.” They reflect no new analysis of what is needed. Notably, they do not offset the impact of budget cuts and disruptive government policies on investment.