On Monday, a federal judge temporarily averted disaster by halting the Trump administration’s plans to slash federal funding for research through the National Institutes of Health. Members of Congress — including some Republicans — have been pleading with President Donald Trump to reverse course.
He should listen to them and abandon this fight. While there is certainly room to improve NIH’s funding process, Trump’s proposed cuts — if allowed to take effect — would harm far more than the president’s perceived enemies in academia. They would also damage the U.S. economy and hamper America’s competitiveness in developing cutting-edge technology.
Trump’s policy, announced late on Friday, would place a 15% cap on the money the government sends to universities and other institutions for “indirect costs” of research, such as keeping laboratories running. This funding is awarded in addition to research grants. A school that negotiates a 50% reimbursement for indirect costs, for example, receives $150,000 for a grant of $100,000.
Payments for indirect costs often run between 30% and 70% of the original grants, so a 15% cap would devastate many institutions. The NIH, which awarded about $35 billion in grants last year, estimates that the change would cut spending by more than $4 billion.
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Elon Musk, the administration’s chief cost-cutter, described the present arrangement as a “ripoff,” complaining that universities with “tens of billions in endowments” waste taxpayer money on “overhead.” But the funding covers far more than administrative expenses (which are already capped for universities); it also pays for an array of needs such as building utilities, equipment, ethics review boards, the disposal of hazardous wastes and facilities to house animals used in trials. Under the proposal, large universities — including many in Republican-controlled states — would stand to lose tens of millions of dollars. School administrators warn that it would lead to layoffs and canceled projects.
To be sure, indirect costs are ripe for trimming. For years, they have been creeping upward, threatening to crowd out grants for new researchers. And because grantees often negotiate their indirect costs with the federal government, funding varies greatly from university to university, and this raises questions of fairness. For years, critics have advocated a simpler, more transparent system. Flat rates for indirect costs are worth considering. The European Union’s research initiative, for instance, has a flat 25% rate. It could be more effective, though, to create tiers of rates based on institutions’ particular circumstances.
Sensible change, however, is a far cry from what the Trump administration sought to impose: an extraordinarily low, one-size-fits-all cap that was to take immediate effect, allowing institutions that depend on the funding no time to prepare.
The policy is probably also illegal. In 2018, after Trump asked for a similar cut to NIH-funded research, Congress inserted language into its appropriation bills explicitly prohibiting the president from modifying indirect cost rates. This provision remains in effect.
The carelessness with which the cost cap was announced reveals the administration’s low regard for government-supported science. This is somewhat perplexing, given that perhaps the greatest accomplishment of Trump’s first presidency was to quickly develop coronavirus vaccines, which were largely made possible by NIH investments in mRNA vaccine technology.
Medical science funding benefits the greater U.S. economy. During the past fiscal year, NIH investments directly supported more than 400,000 jobs and almost $100 billion in economic activity. And there are ripple effects: Every $100 million that NIH invests in research generates 76 patents, which in turn stimulate an additional $600 million in future research, the agency estimates.
In other words, Trump’s cuts to indirect costs stand to imperil innovation in the United States — not just today, but for years to come. And they would do so just as China is ramping up investments in biomedical research in a play to overtake the United States as the world’s leader. Experts have been warning that the United States is losing its edge in developing new pharmaceuticals. Does Trump want to accelerate this loss?
Of course, he and his Republican allies are right to want to rein in government spending. And no agency should be spared scrutiny. But it should be possible to meet fiscal challenges without undermining long-term economic growth. Funding for science is a good investment.