How important is federal investment in science?

I’ve started many talks with remarks about FDR’s science advisor, Vennevar Bush, who in his report Science, The Endless Frontier, advocated forcefully for substantial federal investment in science R&D as a driver of the economy. In the present context of economic crisis, and in light of the Obama Administration’s very significant move towards funding science in the Recovery Act, now would be an excellent time to return to Bush’s thesis and attempt to generate data showing the relationship between federal investment in science and economic activity (as measured say by GDP). I’m particularly interested in whether it would be possible to tease out a causal relationship between the two–that is, does federal science R&D actually accelerate GDP growth and by what mechanism?

It seems to me that if a case could be made, one that uses recent data and that demonstrates some causality, that would be an extraordinarily powerful argument to bring before the US general public and their elected officials. It would also strongly buttress the new Administration’s policy moves to put science front and center of their agenda.
Who would fund such research? And how important would it really be?