Dive Brief:
- Lawmakers in Congress are continuing to debate the proposal by the Donald Trump administration that massive cuts slated for the National Institutes of Health in the President’s budget proposal can be covered by lowering indirect-cost payments to research universities, according to Inside Higher Ed.
- The release of the president's full budget proposal last week specified that he is suggesting a 10% cap on indirect-cost reimbursement, claiming the move would increase efficiencies in agencies, but Congress seems wary of instituting a hard cap.
- Supporters of research universities are criticizing the cuts, arguing that the loss of funding for necessary allocations not directly related to research will still have an adverse effect on each school’s research capabilities, particularly at smaller institutions.
Dive Insight:
As lawmakers debate lowering the indirect-cost payments, colleges and universities remain concerned that Congress could institute a flat rate for schools, which the Obama administration also briefly floated as a possibility. A flat rate could make it more difficult for schools to nimbly reallocate funding to alter research pursuits. With indirect-cost payments, the schools feel they have the freedom to allocate research funds in the manner in which they see fit because many ancillary but necessary costs will be funded by NIH grants. But less federal funding means money that could have been allocated directly to research will be needed to cover what federal funds previously did. This could discourage universities from experimentation in research if they feel that they lack the funding that grants them the freedom to risk failure.
Still, as scrutiny over spending heats up, institution leaders would do well to avoid even the appearance of impropriety or bloat in administrative expenses, and legislators can pledge to strengthen their oversight to ensure that the payments are only going towards costs related to running research facilities at a university. If Congress can properly reduce the risk of wasted spending, it may make the calls for a flat rate less prominent.