The National Science Foundation obligated $6.4 billion in research funds in fiscal year 2026, down 23% from $8.3 billion in FY2025, leaving more than $1 billion unspent as the agency enters FY2027. Grantmaking reached 6,218 awards, a steep drop from 8,647 last year and 10,937 in FY2024.

The New York Times reported NSF withheld $1.4 billion in research funds this year. An OMB apportionment approved in August estimated the agency would carry $1.7 billion in unobligated research funding into FY2027. Although NSF has two years to spend its research appropriations, it typically doesn't carry such large shares of its annual budget.

NSF spokesperson Mike England told the Times the agency "carried over funds to invest in agency priorities that are aligned with broader administration initiatives." Earlier in 2026, Nature reported NSF was holding back about $1 billion to fund the White House Office of Science and Technology Policy's Grand Research Challenges initiative.

What does the funding slowdown signal for principal investigators?

Noam Ross, co-founder of Grant Witness and executive director at rOpenSci, said the inter-agency contrast "shows how important congressional restraints and directions in appropriations bills are towards being able to rein in the changes the administration is making."

The National Institutes of Health, by comparison, spent its entire extramural research budget of approximately $34 billion this year despite a slow start, according to STAT. For R&D managers, the divergence points to two operating environments: one in which agency priorities can redirect withheld appropriations, and another anchored by congressional intent.

Which AI bills will reach the floor after the midterms?

Congress adjourned for the campaign trail on October 2, leaving several AI-related bills for post-election consideration. Senate Democrats blocked a vote on the "Ratepayer Protection Act," which would require states to consider making data centers pay their grid costs. The House passed the bill in September.

Newer proposals include a bipartisan measure directing the National Institute of Standards and Technology to create national guidelines for controlling AI agents, and legislation from House and Senate Democrats establishing a cabinet-level federal agency to regulate AI. The House Energy and Commerce Committee advanced a "Chip Equip Act" barring the purchase of foreign semiconductor equipment.

On the executive side, President Donald Trump issued an order directing federal agencies to replace the term "artificial intelligence" with "super intelligence" in communications. He also posted a "self-policing" AI safety accord signed by industry leaders on Truth Social, and named Director of National Intelligence Jay Clayton as his "AI Czar" on October 3.

How will the H-1B ruling affect research hiring?

A federal judge in California on October 1 blocked the Trump administration's $100,000 H-1B visa fee for failing to follow required rulemaking procedures. The ruling reinforces an earlier block from a Massachusetts case, which found the six-figure fee amounted to an unauthorized tax. The Department of Homeland Security subsequently proposed a $103,265 fee on cap-subject H-1B petitions.

The Association of American Universities and other higher education organizations urged DHS to withdraw that proposal. DHS is also appealing a September 14 injunction blocking a rule that would end "duration of status" for F-1 students and J-1 exchange visitors. Universities are pressing the State Department to drop proposed J-1 program changes that would expand visa termination authority.

For R&D leaders managing international talent pipelines, the legal uncertainty — not any single fee figure — is the operative variable heading into FY2027.

What other R&D signals surfaced this week?

The Department of Energy announced a funding opportunity of up to $400 million for basic research in fiscal year 2027, $100 million below the FY2026 expected level. The DOE Office of Science Advisory Committee released roadmaps for quantum computing and the federal AI Genesis Mission. The US and 16 other nations endorsed the "Kyoto Vision for a Golden Age of Science" at a forum in Japan, calling for metascience and AI to strengthen scientific discovery.

NIH separately plans $174 million for research replicability and reproducibility, per Inside Higher Ed. House Science Committee Ranking Member Zoe Lofgren (D-CA) said DOE is obstructing oversight by withholding evaluations of 223 awards the department terminated last year.

R&D managers planning FY2027 portfolios now face a tighter federal envelope than the prior two years — and a workforce policy environment still unsettled by overlapping court rulings.