If everything we want is cheap, but everything we need is expensive, which is NASA?
It was the late 90’s and everyone was so happy to hear the budget would remain flat, because after all, flat was the new up. A lot has happened since. Glancing at NASA’s recent budgets seems to show good times since 2014, funding going up generously every year. Up about 29%, just under what the entire federal budget grew in the same time. Except that’s not the whole story.
How do NASA dollars look if we consider inflation? This would be a good time to say, “I don’t know”.
If we take the official NASA Inflation Index, NASA has less purchasing power today than in 1995, 19% less. It’s a simple calculation and the result doesn’t sound too bad. After all, we’re fortunate to live in a time when we’re seeing launch costs drop in good part due to NASA’s partnerships for commercial cargo to the ISS, an investment that has paid off handsomely. There are also new partnerships to develop landers on a commercial basis, not old style “cost-plus” contracts paying to cut grass by the hour (guess how long that takes). This must all balance out, right? Some deflation here, some inflation there, all captured in the index and the result. Not quite. An average might be correct, but not always useful. When you have one foot in hot water and one foot in cold water, it does not add up to comfortable. Here this is especially so, as “commercial” dollars (at the bottom of the graph) are small parts of NASA’s huge spaceflight portfolio.
Then there is more uncertainty. If we ask what the effect of inflation is for NASA’s budget, we have to ask how close inflation indexes may be to the mark. Great care goes into these inflation rates, but even the best of intentions have limits. You won’t find rocket engines, spacecraft and flight weight composite tanks next to butter, steak or healthcare in any general inflation index that informs the NASA index. Even adjusting for this, who really believes what NASA buys as goods and services have tracked along with much higher volume aerospace goods, electronics or chips versus ever more expensive healthcare or education? There are excellent arguments that actual, real world inflation in the wild runs much higher than any official inflation reporting will ever reveal. To boot, agency budget planning sending along the indexes always came with guidance clearly fixated around what more the government might spend year to year, not on fixing a set outcome and calculating the updated dollars needed. Agencies are told from on high what inflation will be, not asked to figure it out.
All to say, if we don’t like losing a fifth of NASA’s purchasing power over the last decades, maybe we don’t know just how much purchase power has really been lost. As likely, we will find a better answer even less appealing. Which naturally leads to the need for innovation, competition, and back to the “commercial” lines at the bottom of the budget graph. It’s quite possible the only way to take all the more NASA dollars every year (as long as that lasts) and actually make them behave as more dollars, instead of really being less, is to disrupt, to innovate and to change more parts of the NASA budget just as those commercial lines did.
The alternative? Well, we could do the math, take out the NASA Inflation Index, and find some comfort, looking back only so far, declaring we have turned a curve. Notably, the generosity in NASA’s budget since 2014 was a smidgen behind the growth in the US Federal budget. The federal budget windfall since 2014 didn’t single out NASA as extra important. NASA has just been on the same ride as everyone else.
Better yet, we could look at those lines at the bottom of the budget graph and see a future where more dollars, or even less dollars when (not if) that day comes, can still buy more value.
Thoughts? Comment below.
- Steve Jurczyk, NASA’s acting administrator, quoted recently by Jeff Foust at The Space Review regarding budgets ahead: “We are not counting on very large budget increases, so if we want to have a reasonable cadence of Artemis missions and have the funding to develop the Human Landing System and surface systems, we need to try to get those SLS per-launch costs down.”
- While on DOD budgets ahead, see “No Growth, No Big Cuts Likely For First Biden Defense Budget” over at Breaking Defense.
- Alternately, on more basic research, see “House panel offers its plan to double NSF budget and create technology directorate”, over at Science Magazine. This is a budget increase on the scale of a new NASA spaceflight program over at the National Science Foundation, as “the bill would create an eighth [directorate], called Science and Engineering Solutions (SES). Its budget would start at $1 billion in 2022 and grow to $5 billion by 2026.“
- An update on the NSF budget plan: How Congress Ruined the Endless Frontier Act, Niskanen Center, May 20, 2021.