Both the National Science Foundation and the National Institute of Health must be deeply concerned about cuts to their future budgets. If the NSF and NIH experience a 15% annual cut, what research won't be funded? Universities such as UCLA count on the overhead $ (roughly 50% of the size of the grant) as revenue for the school.
The researchers applying for this $ use it to pay for equipment and to hire research assistants and Post-Docs. If this $ is cut sharply, then unemployment for nerds will rise. Will the private sector fill this gap? Yes and no. While there is certainly private capital out there, these firms are not altruists seeking increases in basic knowledge. These for profit firms will require the nerds they invest in to give them the intellectual output they generate. There will be less "open source" knowledge under this model.
In today's Harvard Crimson, there is an article that discusses the fact that the Department of Defense gives Harvard's Physics dept a lot of research $. If DARPA is pruned back then, this Harvard Dept's revenue will decline.
Many universities appear to be betting that Federal grant dollars will keep growing but what if this assumption is wrong? What if the only folks with cash to hand over to Universities are upper-middle class parents who want a good education for their kids and companies who want to maximize profits? How will research universities reconfigure themselves if this is the "new reality"?