The Trump administration’s drive to disrupt the federal government is already having an outsized effect on Ann Arbor, from social services to climate activism. (For the impact on just one nonprofit, see Doomsday Planning.) But none matches the economic destruction threatened by a February announcement from the National Institutes of Health, which provides $800 million of the U-M’s $2 billion in annual research funding. The edict would set grantees’ “indirect cost” reimbursement at 15 percent.
Paid on top of the grant award, these “indirects” cover the cost of buildings, laboratories, large devices, lab waste disposal, safety personnel, university research management and oversight—pretty much everything besides researcher salaries and lab equipment. Though the actual rate varies somewhat by grant type, the U-M’s current negotiated indirect rate is 56 percent.
“Reducing that rate to 15% will eliminate approximately $181 million in funding,” said Arthur Lupia, U-M’s interim vice president for research and innovation, in a written statement, “and will leave gaping holes in budgets, immediately and needlessly constraining the university’s ability to save lives through medical breakthroughs and drug discoveries.”
The new rate explicitly applies to both new and existing grants. That would be “catastrophic,” says Fox, a deputy director of the NIH-funded Immune Tolerance Network. “Even an institution the size of the University of Michigan cannot withstand a sudden $181 million hit to their budget.”
Like many U-M facilities, the Biomedical Science Research Building depends on the 56 percent “overhead” the university receives on grants from the National Institutes of Health. The Trump administration is trying to cut that to 15 percent, eliminating $181 million in annual funding. | Photo by Mark Bialek
Twenty-two states, including Michigan, sued to block the cuts, and a federal judge quickly placed a temporary restraining order on them. But Fox doesn’t expect the NIH to reverse course. “It’s a maneuver designed, I believe, to hurt the universities,” he says.
“The university is trying to do what it can,” Fox adds. “Hopefully the alumni of the university, some of whom may be in positions of influence, in politics or other sectors, will understand that this is an existential crisis for research universities, and for biomedical research in this country, and start to exert some pressure.” But he “would be more comforted if there weren’t these statements coming out from members of the executive branch that suggest that the rulings of the courts might be ignored.”
“I think everybody would agree that there’s a discussion to be had around what is the appropriate indirect cost,” says medicinal chemistry professor Peter Toogood. “But to make that change essentially overnight, when [research] planning exercises go out into multiple years in the future, is obviously catastrophic. And immediately places everybody into crisis.”
The NIH’s Trump-appointed interim leadership justified the cuts by pointing out that most private foundations set indirects at 15 percent or lower. But Toogood says that’s not a fair comparison. Most private grants are smaller, for shorter periods, and are written to directly serve the foundation’s mission. Since WWII, the U.S. government has funded both research and the facilities needed to perform it, including basic science with no immediate applications. “The foundations are not paying the full cost of what it would really take proportionately to pay for the infrastructure,” says Toogood.
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Whatever happens to the overhead cuts, NIH-funded researchers face another unknown: immediately after Trump took office, the agency was ordered to suspend all external communications and public appearances. That left NIH grant study sections—expert panels of roughly fifteen scientists—unable to meet to review and score external grant applications. Meetings should soon resume, but some study sections have since disbanded, and new ones have formed, with grant applications shuffled in opaque ways. Toogood put in a grant proposal in November, and as of mid-February didn’t know if it would be reviewed, much less funded.
Even delays can have consequences, because researchers carefully manage grant cycles to ensure the continuity of their work, including, for example, clinical trials. “If you break the continuity, then the validity of the work might actually get compromised,” says Toogood. “So it’s really important that this kind of uncertainty not be there.”
Right now, research faculty are busy interviewing prospective PhD students to work in their labs. But “we don’t know what the funding situation is going to be like, and how much is going to have to be cut,” says Toogood.
“In that environment it makes it quite challenging to build a research team, to be able to plan into the future, to be able to commit to taking on these students. Because how do you know you’ll be able to support them going forward? There’s just a huge amount of uncertainty.”
