Budget maneuvers expected to reduce NIH funding opportunities

WASHINGTON — The National Institutes of Health will be able to fund fewer research grants in fiscal 2026, even if Congress provides increased funding for the agency, due to Trump administration budget maneuvers.

The administration’s moves to front-load new grants, while possibly clawing back unspent funds and limiting facility and administration costs, all could suppress the NIH’s opportunities to fund research, according to members of Congress and supporters of the nation’s health research efforts.

These budget maneuvers come in addition to the harsh eye the second Trump administration has cast on the health research agency in its first year, including a proposed 40% budget cut for fiscal 2026, which Congress appears unwilling to abide.

“I am puzzled by it,” Senate Appropriations Chair Susan Collins, R-Maine, said last week when asked about the requested budget cuts for the NIH. “Biomedical research leads to longer, healthier lives for American families, and it also helps us retain our edge in innovation in the world. And why would we want China, for example, to get the jump on new cures or effective treatments?”

The agency’s critics include Office of Management and Budget Director Russ Vought, who chided the NIH for spending money on “injecting dogs with cocaine” or “blowing lizards off trees with leafblowers.”

But the agency has wide bipartisan support across Congress, as many members laud its investments in lifesaving cures and therapies. On Thursday, Senate Republican appropriators brushed aside the White House’s request for a 40% cut; House appropriators are expected to do the same.

The Senate Appropriations Committee’s Labor-Health and Human Services-Education bill proposes $48.7 billion in discretionary funding for the NIH — an increase of $400 million compared to fiscal 2025.

Forward funding

The NIH began changing the way it funds grants earlier this year, and scientists and politicians alike say the change will limit the number of new research grants available to scientists — while potentially setting up the agency for future budget cuts.

The NIH typically awards multiyear research grants and distributes the funds year by year. But by front-loading, or forward-funding, researchers receive all their money on day one.

For example, a five-year, $5 million grant would usually result in $1 million per year. With forward-funding, the NIH would distribute that $5 million up front. The maneuver is often used to avoid future budget constraints, so researchers get their allocated funds without having to build in funding year after year.

Historically, front-loading grants have been the exception rather than the rule. In June, though, the agency announced that half of all remaining funds for fiscal 2025 must be awarded up-front — and that policy would remain in effect through fiscal 2026.

The concern is that under forward-funding, the NIH no longer has to build yearslong research grants in its budget. And that has raised worries over the potential for future reductions.

“Its not obvious but it’s going to have a really big impact,” said Erik Fatemi, principal at Cornerstone Government Affairs and former Senate Appropriations staffer under former Sen. Tom Harkin, D-Iowa. “The problem is math. It significantly lessens the number of new grants NIH can fund.”

Sen. Tammy Baldwin, D-Wis., calculated that the administration is essentially cutting research next year by billions of dollars by front-loading.

“This forward-funding scheme means that the cuts are even deeper,” Baldwin told NIH Director Jay Bhattacharya during a budget hearing in June examining the Trump administration’s proposed 40% cut. “It means billions will effectively be put in escrow and won’t actually be spent on research for a number of years to come.”

The White House rationale for the change is that providing all grant funding up-front “will increase NIH budget flexibility” because subsequent government funding bills will no longer have to consider ongoing research projects.

Congress cannot stop the administration from forward-funding grants, Collins said in a brief interview.

“I think it’s one of those issues that’s easily misunderstood,” Collins said. “Because it sounds good, but it’s not.”

The policy is already having an impact on cancer research.

The National Cancer Institute recently told researchers it would limit the number of awards given for the remainder of the fiscal year, due to the White House’s forward-funding policy. The NCI said the policy reduces the number of cancer research grants it can fund this fiscal year.

“[Forward-funding] is sort of a de facto cut, despite flat funding,” said Mark Fleury, principal for policy development at the American Cancer Society Cancer Action Network.

Pocket rescissions

Vought has suggested that the administration additionally could avoid or delay spending funds appropriated to NIH by Congress. The Impoundment Control Act of 1974 allows the executive to withhold appropriated funds through either deferrals or rescissions.

During an interview on “Face the Nation” on July 27, Vought said the NIH needs a “dramatic overhaul” and the administration needed to go line by line to ensure the agency is properly funded.

The administration already has withheld some appropriated grant funding for the National Cancer Institute and cardiovascular disease research. The delay caught the eye of Republican lawmakers, who demanded the administration release the money.

But Vought said the money wouldn’t be released until OMB completes a review, even if that goes beyond the end of the fiscal year on Sept. 30. Any unspent funds at that point could be revoked, a point Vought didn’t dispute.

Indirect costs

The Senate appropriations bill rejects a Trump administration proposal to cap indirect-cost rates at 15% through a long-standing provision that prohibits the NIH from implementing such a cap.

Indirect costs are expenses incurred by research institutions that are not directly tied to a research project but are necessary for supporting it — like utilities or building maintenance. Typically these costs are reimbursed by the NIH.

In February, the NIH announced a 15% cap on indirect costs for research grants — a major cut for most research institutions. In April U.S. District Judge Angel Kelley ruled that the NIH had violated federal statute in creating a cap. The administration quickly appealed to the U.S. Court of Appeals for the 1st Circuit. That court is reviewing the case, with the ultimate outcome far from certain.

In the meantime, research institutions are left wondering what’s next — and that’s not helpful in a field that relies on certainty.

Unlike other government-funded projects that can withstand a few months or yearlong pause, medical research cannot stop and start again based on funding without skewing results.

“It’s stultifying,” said Ellie Dehoney, senior vice president of policy and advocacy at Research!America, a health research advocacy group. “Think there’s no question that from the publicly funded to the private sector funded that this uncertainty is killing medical progress.”

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