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President Issues Detailed 2018 Budget Proposal With NIH/NEI Cuts and Reduced Reimbursement for Indirect Costs in Grants

Legislative Update
May 22, 2017

Today, President Trump issued a detailed Fiscal Year (FY) 2018 budget proposal entitled A New Foundation for American Greatness following up on the March 16 Budget Blueprint document which proposed to cut National Institutes of Health (NIH) funding, reorganize NIH by eliminating the Fogarty International Center and consolidating the Agency for Healthcare Research and Quality (AHRQ) within NIH, and reducing administrative costs by rebalancing federal contributions to research funding.

Below are highlights of the President’s detailed budget proposal with respect to NIH and the National Eye Institute (NEI):

  • Funding Levels: The Trump budget used the FY2017 Continuing Resolution (CR) funding levels and not the final FY2017 omnibus spending bill with the $2 B NIH increase. As a result, the NIH would be cut by $7.2 billion, or 21 percent, and NEI by $183 million, or nearly 25 percent. Most Institutes and Centers (I/Cs) have cuts ranging from 21-26 percent.

  • Indirect Costs: The last page of the NIH section generally discusses that reimbursement for indirect costs for NIH grants will be capped as a percentage of total research — but an exact dollar figure is not specified. At the March 29 House Labor, Health and Human Services, and Education (LHHS) Appropriations Subcommittee hearing, Secretary of the Department of Health and Human Services Tom Price, M.D. estimated that the current 30 percent indirect rate in NIH grants accounts for $6 billion in costs. Even if that indirect rate was reduced to 10 or 12 percent—a rate similar to that in private funding foundation grants—the overall NIH cut of 21 percent exceeds any allowance for savings from those reduced indirect costs.

  • NIH Reorganization: Per the Budget Blueprint, the Fogarty International Center would be de-funded and AHRQ would become an NIH Institute funded at $379 million and called the National Institute for Research on Safety and Quality (NIRSQ). No further organizational changes are addressed in the text, even though the Blueprint implied further reorganization/reprioritization of research.

  • 21st Century Cures Act Funding: The budget document is not clear as to whether the $496 M in FY2018 Cures funding is included in the total for special NIH initiatives (BRAIN Initiative, Precision Medicine, Cancer Moonshot, and Regenerative Medicine).
NAEVR has issued a statement, noting that the Trump budget threatens the health, and vision health, of all Americans and calls on Congress to reject the proposal and advance medical research. Also today, the Wall Street Journal and Politico carry an ad organized by the Ad Hoc Group for Medical Research — in which NAEVR serves on the Steering Committee— in which 300 organizations thank Congress for the FY2017 $2 B NIH funding increase and call upon it to increase NIH funding by $2 billion in FY2018 to ensure predictable and sustained funding.

As is often stated, “The President proposes, the Congress disposes,” meaning that that the Congress—especially the Committees that deal with appropriating funds and authorizing programs—will have the final say on the FY2018 budget with respect to the biomedical research enterprise.