In a highly anticipated hearing, a federal judge on Friday extended a pause on the indirect-funding cap announced in early February by the National Institutes of Health. The initial pause, which came in the wake of three lawsuits opposing a new 15-percent cap on indirect costs, was set to expire Monday. It will now last until Judge Angel Kelley, of the U.S. District Court in Massachusetts, decides whether to issue an injunction.
The stay provided a measure of relief to researchers who have mounted fierce objections to the cap, in the form of campus protests, posts on social media, letters to Congress, and, through supporters and other allies, in the courts. They say the funding cuts would have disastrous implications for university budgets, public health, and the American research enterprise.
As Kelley, who was appointed by President Joe Biden, weighs whether to grant an injunction, academic science remains in limbo. Although universities are still being reimbursed by the NIH at their normal rates — which average between 27 and 28 percent but can range as high as almost 70 percent — some institutions have announced preemptive cost-cutting measures amid broad uncertainty about funding availability under Trump. Meanwhile, the NIH grant-approval process has been halted by a freeze on submissions to the Federal Register.
On Thursday, ahead of the hearing, two amici briefs were filed in support of the plaintiffs. One came from a group representing 45 cities, counties, and mayors in states that voted both for and against President Trump in the last election, in which they argued that cuts to NIH spending would have “ripple effects” on their local economies; the other was filed by the Massachusetts Biotechnology Council.
In Friday’s two-hour session, Kelley heard arguments in the trio of cases opposing the NIH policy, filed by the attorneys general of 22 states, a coalition of medical organizations led by the Association of American Medical Colleges, and three national higher-ed organizations — the Association of American Universities, the Association of Public and Land-grant Universities, and the American Council on Education — along with a dozen institutions. (The three cases haven’t been consolidated but were heard together.)
The judge posed pointed questions to the lawyers for both sides, and she at times appeared skeptical of the government’s arguments. Here are snapshots of some notable exchanges; the judge’s questions appear in bold:
On how the process usually works:
“The president lawfully won the election. One of the reasons citizens voted for him is because he campaigned on eliminating waste, fraud, and abuse from the federal government. Why shouldn’t he be able to engage in cost-cutting measures by cutting the indirect-cost rate across the board for all NIH grants?”
“It’s contrary to the regulations which govern how these costs are determined and how these payments are disbursed,” Katherine Dirks, representing the Massachusetts attorney general’s office, replied. “If there were an intention on the administration’s part to change the mechanism by which those occur, there’s a process for it. There’s a statutory process and there’s a regulatory process. Neither of those were followed here.”
On the purpose of the cap:
“This idea to cut indirect-cost rates for federally funded grants is not new. In fact, it’s been a bipartisan issue for several presidents, including President Clinton, Obama, and President Trump in his first term. They all tried it; each president was unsuccessful. ... How is it that President Trump in his second term can unilaterally slash and cap these previously negotiated indirect-cost rates?”
“The short answer is the NIH complied with the regulations in this instance, and that is the bottom line,” Brian C. Lea, representing the government, said. “We are talking about a broad discretionary power of the executive branch.” The move, Lea added, “is not cutting down on grant funding. This is about changing the slices of the pie, which falls squarely in the executive’s discretion.”
Kelley asked Lea whether the move was “simply moving money from one pot to another pot.” It was not, Lea replied. “The money is not being pocketed or being shifted somewhere else; it’s being plowed back into other research in a way that best fits NIH’s assessment of what will best serve the public health.”
Kelley then pointed to a post on X by the NIH, which asserted that the overhead cap would save $4 billion a year, and she asked Lea about the apparent discrepancy. “The tweet,” Lea responded, “is at best a misunderstanding of what the guidance does.”
On whether other remedies are available:
“There are 50,000 grants involving 300,000 researchers and more than 2,500 universities, medical schools, and research institutions across all 50 states. Are you proposing that each one of those file a lawsuit in the court of federal claims?”
Kelley posed that question to Lea, who argued that the plaintiffs protesting the cuts would have other avenues to recoup funding they’d lose under the cap. They could, for instance, sue the government for breach of contract under the Tucker Act. Doing so “is going to sound a lot more burdensome and objectionable” than it would be in reality, he said.
On the question of harm:
“Are you willing to agree that the plaintiffs will suffer harm?”
That question from Kelley to Lea came after lawyers for the plaintiffs listed ways that the indirect-cost cap would constitute “irreparable harm,” among them potential layoffs of staff members and pauses on clinical trials. “Not irreparable,” Lea responded, saying that the plaintiffs hadn’t demonstrated the immediate consequences of the cuts but rather described a “nonspecific aura of urgency.”
Having found “good cause” to extend the temporary restraining order, Kelley’s parting words to the Boston courtroom suggested that she’d have much to consider in deciding whether to issue an injunction. “I have a lot of work to do,” she said.
