This is a huge deal.
“Indirect costs”, as they’re called, from NIH still pay for direct science — eg, funding science labs, lab upkeep — but also university administration. Cutting this line item by billions of dollars is going to threaten university jobs but also potentially cut into science lab funding.
There are absolutely controversies/concerns about wasteful indirect cost allocation. But it’s hard to imagine a cut this deep not affecting science labs directly.
This is just not where I’d start cutting billions. Universities (including those that don’t have $10b endowments) are gonna scream, and I’d guess we’re gonna hear about extremely worthy programs relying on labs being endangered.
Last year, $9B of the $35B that the National Institutes of Health (NIH) granted for research was used for administrative overhead, what is known as “indirect costs.” Today, NIH lowered the maximum indirect cost rate research institutions can charge the government to 15%, above what many major foundations allow and much lower than the 60% that some institutions charge the government today. This change will save more than $4B a year effective immediately.