A Deserved Defeat on NIH Funding Cuts

The Trump administration quietly conceded defeat last week on its misguided push to slash research funding from the National Institutes of Health. That’s a relief to researchers, but all Americans benefit from the basic and applied research that would have been disrupted by permanent cuts.

The saga began last February, when the U.S. DOGE Service announced it would cap payments for the “indirect costs” of research at 15 percent. Elon Musk, then leading the cost-cutting initiative, described such spending as a “ripoff” that allowed wealthy universities to nab huge amounts of money from the government to cover overhead.

Musk attempted to solve a real problem with a sledgehammer. The NIH has long negotiated with research institutions to provide additional funds on top of their grants….Such spending has been inching upward for years, and the arrangement tends to benefit larger schools with well-established research programs. But capping those indirect costs at 15 percent — without any warning — created a financial nightmare for schools that needed the money to keep the lights on in their labs.

The private economy could pick up some of the slack, but some research simply can’t attract investment outside of the federal government. And federal support for basic and applied scientific research has delivered a higher return on investment than almost anything else the government does.

Cutting the funding that dramatically and quickly would have undermined the broader economy, since NIH grants have proven to be powerful kindling for innovation.

The DOGE cuts also ignored the explicit will of Congress. In 2018, after the first Trump administration proposed similar NIH cuts, the legislative branch rejected the proposal and prohibited any attempt to “implement a modified approach” to indirect costs.

Higher expenses do not automatically lead to more or better discoveries, and it’s worth encouraging research institutions to keep a lid on costs. But it’s one thing to tweak distribution formulas and something else entirely to throttle America’s scientific engine.

Lambert here: What a chin-stroking conclusion.