Who pays for American science?

Ask someone who pays for research in the United States and most people guess the government. For the first few decades after World War II, they would have been right. In 1953 the federal government put up $2.8 billion of the country's $5.2 billion research budget — more than half — and at the height of the space race in 1964 its share peaked at two-thirds of every research dollar spent in America.

Then, around 1980, the lines crossed. American companies — which had been steadily scaling up their laboratories since the transistor era — matched the federal government at roughly $30 billion each that year, and they have outspent Washington every year since. By 2023 the gap had become a chasm: industry funded about $709 billion of research and development, roughly three-quarters of the national total, while the federal government funded about $172 billion — less than a fifth.

That does not mean the government stopped mattering. Company money overwhelmingly chases products: industry paid for 88 percent of the country's development work in 2023. But for basic research — the kind with no product in sight, the kind that gave us the internet, GPS, and the Human Genome Project — the federal government is still the largest single funder, covering about $56 billion of the $138 billion total. Who pays turns out to shape what gets discovered.

When Congress writes the federal research budget, the single biggest line is not a university program or a science agency — it is the Department of Defense. In fiscal year 2025, the Pentagon's roughly $96 billion was about half of the $197 billion the federal government spent on research and development.

The next biggest destination is medicine. The Department of Health and Human Services received about $49 billion, and nearly all of it — $45.6 billion — flows through one agency: the National Institutes of Health, the largest funder of biomedical research in the world. After that come the Department of Energy at about $21 billion, which runs the national laboratories, and NASA at about $11 billion.

The agency most people picture when they hear "government science funding" — the National Science Foundation, which funds university research across every field — received about $7 billion. That is real money, but it is about seven cents for every dollar the Pentagon gets. The composition of this budget, more than its size, is the federal government's actual science policy.

In 1976, the first year of this dataset, federal research money was split almost exactly down the middle: $11.1 billion for defense, $11.0 billion for everything else. That balance did not last. The Reagan defense buildup pushed the military share to its modern peak in 1987, when roughly 68 cents of every federal research dollar went to defense.

The end of the Cold War unwound some of that, and the two sides have traded the lead a few times since — most recently in the late 2010s and early 2020s, when civilian research (led by health spending) pulled ahead of defense in inflation-adjusted terms for seven straight years, from 2017 through 2023.

The fiscal year 2026 budget request would have swung the pendulum hard the other way: about $94 billion for defense research against $61 billion for everything else. Congress didn't go quite that far — the enacted FY 2026 budget boosted Defense Department R&D to about $101 billion while restoring most of the proposed nondefense cuts — but the tilt back toward defense is real. The chart's 2026 figures still show the request-era estimates; the appropriations tracker has the enacted cycle.

Plot seventy years of federal research spending on one line, adjusted for inflation, and you can read the country's history in its bends. The first and steepest climb starts in 1957, the year the Soviet Union launched Sputnik. In the seven years that followed, real federal research spending nearly doubled — from about $43 billion to $79 billion in 2017 dollars — as the Apollo program raced to the Moon.

The later bends are quieter but just as deliberate. Between 1998 and 2003, Congress doubled the budget of the National Institutes of Health, from $13.1 billion to $26.4 billion, in the largest sustained civilian research expansion since Apollo. In 2009, the American Recovery and Reinvestment Act — the financial-crisis stimulus — spiked real federal research spending to about $141 billion, a level it would not see again for a decade.

And then there is the bend nobody celebrates: the 2013 budget sequestration, when automatic across-the-board cuts dropped real federal research spending roughly 10 percent below its 2010 level. Each of these moments was a choice. The curve is just the record of who won the argument.

Here is the paradox at the end of the story. Measured against the size of the economy, the United States has never spent more on research: about 3.4 percent of gross domestic product in 2023, comfortably above the 2.9 percent of the Apollo era. By that yardstick, American science is thriving.

But pull out just the federal piece and the picture inverts. Federal research spending peaked at 1.9 percent of GDP in 1964 — nearly two cents of every dollar the economy produced, aimed at the Moon. By 2023 it had fallen to 0.63 percent, roughly a third of the peak. The growth that kept the national total climbing came almost entirely from industry.

Whether that trade matters depends on what you think each kind of money buys. Industry funding built the smartphone. Federal funding built the science underneath it — often decades before anyone could sell it. The bet the country is quietly making is that the second kind of work will keep happening while its share of the economy shrinks. That is a physics experiment with a very long time constant, and we are all inside it.