Since the change in Federal Administration, there has been a great deal of attention on government efficiency and federal spending. While the debate around spending continues in Washington, D.C., the direct impacts of actual, planned, and perceived federal cuts have already begun to significantly and potentially negatively impact our region’s economy.
- On February 13, 2025, RTI International announced a temporary layoff of 226 US staff, including 61 people in North Carolina, due to the ongoing pause in US foreign assistance. RTI was created in 1959, is headquartered in Research Triangle Park, and is a leading non-profit research institution.
- Similarly, FHI 360, headquartered in Durham, is a non-profit research organization that announced a furlough to 36% of its US staff, including 200 in North Carolina, on February 7 because of federal funding issues.
- Two weeks ago, UNC's vice chancellor for research wrote a letter to university researchers stating that NIH’s potential change would have "a significant and negative impact" on UNC-Chapel Hill.
Our region also hosts a large federal employee presence. In a future post, I will spend time on our federal employment base. Today, I want to focus on federal grants and contracts coming into the region to highlight how much money is received and provide a clearer picture of where federal funds are spent. It is essential to recognize that federal grants and contracts significantly impact our region’s economy, and changes to federal priorities and spending will likely have downstream implications for our region. It is also important to have a robust public debate about the use and effectiveness of government spending. This piece intends to help frame how federal funds are used in the Central Pines Region and assist in the discussion of whether prioritization and spending levels align with public spending goals.
The data I reference comes directly from USASPENDING.GOV and only includes Federal Fiscal Years 2024 and 2025, with federal fiscal years running from October 1st to September 30th.
More than $55.6 Billion in federal grants, direct payments, and contracts is obligated to the Central Pines region - Moore, Lee, Chatham, Orange, Durham, Wake, and Johnston counties.
To put this into perspective, the entire budget for North Carolina State Government in Fiscal Year 2024 is $19.6 Billion. Federal spending is undeniably a significant driver of our region’s economy, and any changes to this spending would have far-reaching implications.
The total amount of grants is $42.4 billion, with about $13.2 billion in contracts. The remainder of this piece will explore where and how funding is being spent across our region.
What does obligated or obligation mean? Obligation by the federal government means a legal liability to disburse funds immediately or at a later date as a result of a series of actions.
Where and How is Grant Funding Going in Our Region
In the federal fiscal years 2024 and 2025, $42,448,003,536 in federal grants was obligated to our seven-county region.
** An important note about federal spending for our region: we are home to the State Capital. Some of the funding listed in this analysis is sent to the State and distributed across North Carolina. One example is funding for broadband shown in Table 2; these funds were granted to the state and are then distributed to local entities across North Carolina.
How is the Money Being Spent?
There are endless ways to categorize and review federal spending across our region, highlighting how complex any review of federal spending can be. For this piece, I will utilize the Catalog of Federal Domestic Assistance taxonomy to highlight how federal spending is directed.
The list below shows the top 20 spending categories across the seven-county region.
- Social Security Retirement Insurance
- $8,996,557,279
- Disaster Grants - Public Assistance (Presidentially Declared Disasters)
- $2,961,494,171
- Veterans Compensation for Service - Connected Disability
- 1,601,548,250
- Broadband Equity, Access, and Deployment Program
- $1,532,999,481
- Medicare Supplementary Medical Insurance
- $1,299,946,670
- Special Education Grants to States
- $1,195,089,940
- Highway Planning and Construction
- $1,091,127,522
- Title I Grants to Local Educational Agencies
- $1,037,045,691
- Social Security Disability Insurance
- $919,320,555
- Medicare Hospital Insurance
- $873,344,937
- Hazard Mitigation Grant
- $784,584,361
- Cardiovascular Disease Research
- $772,551,824
- Drug Use and Addiction Research Programs
- $722,565,234
- USAID Foreign Assistance for Programs Overseas
- $660,274,519
- Allergy and Infectious Disease Research
- $645,485,779
- Social Security Survivors Insurance
- $635,935,826
- Federal Disaster Assistance to Individuals and Households in Presidential Declared Disaster Areas
- $590,735,517
- Federal Pell Grant Program
- $481,534,642
- Biomedical Research and Research Training
- $443,427,145
- Aging Research
- $433,094,966
See full table HERE.
Federal Contracts
The Federal government also holds hundreds of contracts with private and public agencies across our region. These contracts, specifically from Federal Fiscal Years 2024 and 2025, account for approximately $13.2 billion in potential spending.
Like grants, federal contracts stretch across our region, and the table below shows how they are distributed in each of the counties.
The table below lists the top 20 recipients of federal contracts in the region during this time frame.
Key Takeaways
- Approximately $55.6 billion in federal spending is slated for the Central Pines seven-county region in the federal government’s Fiscal Year 2024 and 2025 budgets.
- Of the $55.6 billion, $13.2 billion is contractual spending and $42.4 billion are for grants and direct payments.
- The federal spending slated for our region is 3 ½ times greater than the State of North Carolina’s annual budget.
- Significant cuts in federal spending will impact our region economically. Several regional companies, such as RTI and FHI, have had to lay off and furlough employees, and significant anchor institutions, such as the University of North Carolina at Chapel Hill, have expressed concern about the impacts they may see from cuts.