Yves here. We are hoisting an e-mail from KLG, which explains how the Musk/libertarian fanboy claim about the overhead components of NIH and NSF grants being excessive is in most cases badly misplaced. Below he explains in short form why going to the 15% overheads level would put most of the top 85 medical school research programs in the red and force them to stop entirely.
This outcome would be a sick Bizarro-world contradiction of purported MAGA aims, until you factor in that Trump may really want to return us to the 1890s, including its lack of modern health care. One place the US has been dominant is medical research, even allowing for Big Pharma corruption of clinical drug trials, which is not at all what NIH grants fund.
I am not familiar with exactly what goes into the overheads versus base charges category for these grants, but most people don’t understand the economic of simple white collar workers. Fully loaded cost for them includes health care, sick days, maternity/paternity leave, office space (including allocated space for mail rooms, reception areas, corridors, conference rooms, bathrooms), equipment, furnishings, electricity, and communications. Indirect overheads would include things like the general management, the HR department, the legal department and litigation costs, and corporate insurance policies.
From KLG:
These would be the people who actually do the work, not the political appointees and administrators like who behaved badly during the past few years. Rochelle Walensky, commuted to Atlanta from tony Newton (I read) when she was Director and mostly tweeting about wellness from the CDC lawn.
I know some of these scientists, and they do very good work at all levels of research into infectious disease. They could get ahead of bird flu if given the time and resources but we don’t do that anymore, do we? CDC scientists honed in on HIV very rapidly 44 years ago, though.
Even if trending purple, Georgia is securely a Red State, completely run by the GOP for the foreseeable future. If the president severely damages CDC plus Emory, Georgia Tech, and University of Georgia, along with Morehouse Medical School and Medical College of Georgia with his factitious DOGE running rampant through research institutions…well, I don’t know.
Marjorie Taylor Green and her ilk will not care, but the consequences will be dreadful if this cutting overhead on individual NIH and NSF research grants to 15% from >50% takes effect (not that total overhead ranges from 25-30%, which seems more than reasonable; see the spreadsheet).
Mind you, I have direct experience with AHA grants allowed only 10% overhead. That is completely relevant, because they do not prove the 15% case as DOGE boosters would have you believe. They depended on the institutional infrastructure already in place, a lot of which is paid for by F&A (Facilities & Administration) from NIH and NSF. A typical holder of an AHA grant also has an NIH grant!
Most awards from private sources (e.g., AHA, ACS) are a very thin veneer of icing only on the top of an 8-layer cake. Most institutions give very little credit for them to their grantees because they do not pay the bills for buildings, facilities, utilities, library, research compliance, certified animal care facilities. One example, the vivarium is managed by the institution, but individual investigators pay a per diem for every animal in his or her animal room. Mice can be a dollar a day, last I looked, and an active lab can have hundreds of the little creatures in various cages.
One can argue there is a better model, but if this goes through without converting to that yet to be invented model, academic biomedical and other research in the US will crumble into dust. Even at Harvard and Yale (HMS is a piker but Harvard is huge in the NIH and NSF budget; ditto for MIT, Tufts, Brandeis, Boston University). Contrary to Elon the Magnificent, the better model is not for-profit Biomedicine in the form of Big and Little Pharma.
NIH funding to medical schools below.
To pick an example, at 15% instead of 24.2%, Emory would have lost $34.4M in 2023 ($90.5M to $56.1M). That would probably put them out of business as a research institution. This is a very low-margin thing. Same for most of the other research medical schools on the list (the top-85).
A further tidbit from KLG:
An update from what I believe is the one good independent news source in Georgia:
Emory states:
Emory’s NIH funding in the last fiscal year totaled $488 million. Emory said it expected funding to decrease $140 million annually as a result of the change.
That would be 29%, right in line with a reasonable overhead rate for total funding. If NIH and NSF reduce overhead from ~55% on individual extramural grants to 15%, all research institutions in Georgia will die. And everywhere else, too. The Chinese Academy of Sciences is both laughing and anticipating a gold rush if this stands.
Emory University (very good Development Office) and the State of Georgia (Georgia Tech, UGA, Medical College of Georgia) have provided the critical support for those institutions that the federal government would never even consider. Nor should it.
The key misunderstanding of the Administration is also illustrated in this piece:
The NIH said in its order that universities take too much in overhead, and that private nonprofits often offer less.
Yes, but as I point out in my post, the private nonprofits are only able to support research at any level because of the infrastructure ALREADY in place from institutional growth and development (public and private) and F&A from federal support.
And again, in my long experience, no private basic biomedical research grant has ever been awarded to an applicant in the absence of substantial ancillary support that is generally an NIH grant that covers the funding period of the private grant.
The abject stupid, it burns. I notice the public institutions held their tongues.
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