Grated I’m just a post-doc so I don’t have that much experience with the funding side of things yet but I think math is actually a little less cut-throat than a lot of the other departments simply because the overhead is so low. You can fund a guy for 50k, which is basically just office supplies or pipets or something in a wet lab. If after the NSA stuff came out a mathematics researcher decided to no longer apply for defense grants but apply for a few more NSF grants I don’t think the university higher ups would care that much. Besides if you have tenure the idea is that you’re supposed to have academic freedom. You could just say your interests have shifted and NSF grants are now more appropriate to the direction you want to take your research.
I guess the hardest part of the decision is that a lot of the time people with a lot of students have others depending on their ability to pull in grants. Missing a funding opportunity might not have a huge effect on the lifestyle of a tenured faculty member, but it may very well have a gigantic effect on the lives of his/her students.
