MIT Vice President Warns of Trump Administration Indirect Cost Cap Impact on Federal Research Funding

From: Jcichi |: Sent: 7/7/2017 12:05:21 PM To: Jeffrey Epstein [jeevacation@gmail.com] Subject: Fwd: A message on the Trump Administration Proposal on Indirect Costs Attachments: dkkolnphoaemodnh.png Importance: — High FYI Begin forwarded message: From: "Maria T. Zuber" <P Subject: A message on the Trump Administration Proposal on Indirect Costs Date: July 6, 2017 at 12:27:05 PM EDT To: all-research@mit.edu Ce: Suzanne Pettit < >, Paul Schierenbeck i Reply-To: | l lit l I Massachusetts Institute of Technology Martin A. Schmidt, Provost Maria T. Zuber, Vice President for Research Dear colleagues, We are writing to alert you to an issue that threatens all of MIT’s federally funded research activities but that is often underappreciated. Werre referring to the Trump Administration’s proposal to put a 10 percent cap on indirect cost reimbursements to universities by the National Institutes of Health — an idea that is already beginning to be talked about for other federal agencies as well. An article explaining indirect costs and why they are important to MIT can be found in the most recent Faculty Newsletter: http://web.mit.edu/fnl/volume/295/zuber.html. The Administration’s proposed cuts to federal R&D agency budgets have rightly been met with consternation on campus. The indirect cost cap proposal is actually an even graver danger because it is easier for the government to institute, and it would do far-reaching damage that is harder to reverse. We need faculty and research staff to understand the devastating effects that capping indirect cost would cause to MIT and other research institutions. The indirect cost cap is easier to implement than a cut to the budget because the Administration can act unilaterally without Congressional approval. The proposed agency budget cuts are already running into strong headwinds on both sides of the aisle in Congress, and they cannot move forward without 60 votes in the U.S. Senate. The indirect cost cap, by contrast, does not attract the same level of attention because it is not well understood, and the Administration can simply impose a cap — at a single agency, or at all of them (since indirect cost reimbursement is fairly uniform across the government now). What would a 10 percent cap mean for MIT? A 10 percent cap on all federal agencies would cost MIT around $100 million a year. To put that in context, the financial crisis of 2008, where we saw a significant decline in endowment, required us to reduce spending by this same order of magnitude. Fortunately, the recovery of the endowment was relatively quick, and we were able to recoup some of that loss. In this case, the 10 percent cap is unlikely to be altered in the foreseeable future. Since this is a recurring cost, attempting to HOUSE_OVERSIGHT_029429