Former ScienceBlogling and now International Man of Scientific Mystery Ed Yong reports (boldface mine):
The bulked-up version of the President’s budget for fiscal year 2018, which will be released next week, may not allay those fears. According to two sources within the NIH who were briefed on the issue, the administration may pursue a new strategy in its quest for cuts, by proposing a 10 percent cap on the NIH’s indirect costs—the money it gives to grantees to support administration, equipment, libraries, IT, lighting, heating, electricity, and other overhead.
“It’s going to make every single university president across the country call their representative,” says one of the sources, who agreed to speak on condition of anonymity…
It’s not surprising that the administration is considering a cap. In the wake of the skinny budget, Secretary of Health and Human Services Tom Price defended the cuts by arguing that indirect costs represented “inefficiencies”—money going towards “something other than the research that’s being done.” As Science reported in March, the NIH doled out $6.4 billion in indirect costs in fiscal year 2016, which was 38 percent of the $16.9 billion it spent directly on research. If the 10 percent ceiling had been installed, indirect costs would have been capped at roughly $1.7 billion, representing a saving of $4.7 billion.
On the face of it, that sounds like a positive thing. Indirect costs have long been controversial, with critics arguing that they incentivize institutions to spend money on wasteful administration and lavish purchases instead of actual research. Universities negotiate indirect costs with the NIH when they are awarded grants, and while administrative costs are capped at 26 percent, others are not. In 2014, an investigation by Nature revealed large disparities in indirect costs, with some universities receiving rates of just 20 percent while others got windfalls of 85 percent…
“Instead of having an informed process where they get people together and talk about how to build efficiencies, they’re just backing into the numbers that the President put forward,” says one of the sources at the NIH. “They’re trying to pretend that they’ll cut something without actually cutting science.” The source revealed that officers at NIH were briefed on the upcoming proposal by a senior official earlier this week. The official did not reveal details about the overall NIH budget, but implied that the 10 percent cap would result in a similar-sized cut to what was proposed in the skinny budget.
On the one hand, many universities claim they’re losing money on research, even with the overheads as they are. Then again, I find it hard to believe that, a decade ago, university administrators were building new science buildings and hoping to fill them up with researchers on the expectation that it, in the best case, would cost them millions of dollars every year. My guess is that some places are doing well (i.e., ‘making a profit’) while others are losing money, if for no other reason than the realized total indirects rate is basically the same across institutions.
But the arguments by those who claim that overheads are too high are lazy. It’s possible to find the indirect rate institutional agreements for most universities online (it doesn’t help that these words are used to mean different things by different people in different contexts; here’s a good explainer, and here’s a short version on the terms). Getting the justifications for these rates is harder, as they used to be publicly available, but aren’t any longer. Someone (or someones) need to do the heavy lifting here, and see how the numbers add up.
If there is waste, it’s probably like most other government spending: it’s marbled. That is, it’s not easy to go in and just lop off a big piece; one place might be charging a little more on depreciation costs, while another has high fringe. You’re going to have to work hard and sweat the small stuff to fix it. But the suggestions to cut indirects by around eighteen percent ($1.2 billion) aren’t informed by any such analysis. Instead, it’s being driven by artificially-imposed austerity.
More clarity in overheads is needed, but let’s be clear: the people pushing this right now don’t give a shit about science.
Every dollar cut from scientific research is another dollar Il Trumpe can send to his friends. That’s what this is all about. And yes, anger is the appropriate emotion.