NIH Operations Under the Sequester


This morning I sent a letter to the signing officials at NIH-funded institutions about the sequestration order signed by the President on Friday. We have posted the letter on the Office of Extramural Research website and I am copying it here for your information.

As we noted in the recent Guide Notice, NIH institutes and centers (ICs) will announce their respective approaches to meeting the new budget level at a later date. Links to these announcements will be available on the NIH extramural financial operations page.

I will keep you informed as events progress.

 Dear NIH Signing Official,

As you are likely aware, in accordance with the Budget Control Act of 2011, a series of spending cuts, called sequestration, will cancel approximately $85 billion in budgetary resources across the Federal government for the remainder of the Federal fiscal year.  As a partner with you in accomplishing the NIH mission, we are writing to provide you with information about what this reduction means for the funds provided to your organization.

At this time, the Department of Health and Human Services and NIH are taking every step to mitigate the effects of these cuts, but based on our initial analysis, it is possible that your grants or cooperative agreement awards may be affected.  Examples of this impact could include: not issuing continuation awards, or negotiating a reduction in the scope of your awards to meet the constraints imposed by sequestration.  Additionally, plans for new grants or cooperative agreements may be re-scoped, delayed, or canceled depending on the nature of the work and the availability of resources.

To the extent that fiscal year 2013 funds for your grants or cooperative agreement are affected due to these budget cuts, you will be contacted by the appropriate Grant Management Officer with additional details at a later point.  Please note that these budget cuts do not affect grant or cooperative agreement awards made with fiscal year 2012 resources.

Thank you for your continued partnership with the Department of Health and Human Services and NIH, and for your cooperation as we work together to manage these circumstances.

Sally Rockey, Ph.D.
Deputy Director for Extramural Research
National Institutes of Health


  1. I am surprised that the NIH did not have a well-defined plan in advance of these expected budgetary cuts. I understand that they may be corrected in the budget discussion taking place right now, but a clear outline of the devastating consequences of these reductions would have been helpful for grantees, prospective applicants and politicians.
    In fact, rather than repeatedly trumpeting how wonderful the NIH has been at maintaining success rates, this message would have transmitted the dismay of the scientific community to our representatives and the public in general in a much more faithful manner.
    It will be also interesting to see how some intramural programs that are not at the level of peer-reviewed RO1s are affected, rather than charging the extramural community with the weight of this burden.

    1. If you had an R01 grant you might have noticed that you only got 90% of your promised award for 2013. Consider this preemptive cut as planning. As an answer to your other question see my answer below.

      And PS, it is illegal for Federal Employees to lobby Congress in any way. You should be the one transmitting your dismay to Congress. You need to stop depending on others to do what you should have been doing for the past few years.

  2. It sounds as if the budget cuts due to sequestration are only for the extramural investigators and the intramural labs will not share the burden. Is this true?

    1. The Office of Extramural Research has no relationship to the Intramural Program at NIH. SR can only write letters concerning the Extramural Program. And, yes if it makes you feel better the Intramural Program is getting cut by the sequester to the same degree as the extramural program.

  3. It is really unfortunate to see that the US Senate CR Bill (as of March 11, 2013) shows NSF receiving an INCREASE in their 2013 budget over what they received in 2012, while NIH….Only $71 million replaced from the 1.5 billion cut due to sequestration. This is a drop in the bucket and I cannot tell you how disappointed I am in our leadership at NIH to let something like this happen.

  4. As a graduate student mentor, I am finding it difficult to convince my students that “everything will be OK in the future.” Unfortunately, the current attitudes towards science in Congress combined with the very low funding rates in most NIH institutes have discouraged not only many prospective graduate students, but also many junior faculty as well. I am growing more and more concerned that we can continue to attract the “best and brightest” if what they see is precarious Congressional support for science funding and extremely low paylines at NIH. As established investigators, what can we say to encourage our younger colleagues when we ourselves face loss of funding?

  5. Dear Sally,
    I apologize for the somewhat personal attacks above – the “shoot the messenger” reaction is as old as human history. To the specifics, however, I wonder how the budget cutting decisions will be made. I understand that Institutes have great latitude, but a rational common modality would be advisable – whether it is a sliding scale prorated to the initial score, or inversely proportional to the age of the grant (as more people’s employment may depend on a more established grant than a newer one), it would be good to know that there is a method to this absolute madness imposed by our unknowing, uncaring and misguided congress. The possibilities mentioned in your letter to the signing officials are so broad and ill defined that they must have unnecessarily irritated and frankly scared the colleagues who wrote, and the multitudes who did not. We are scientists, please give us facts, data and formulas, and we will understand and plan accordingly.
    Thanks for your continued efforts to keep us informed.

  6. My R01 grant was cut to about 90% for all 5 years. Does this mean there will not be further cuts because of the sequester? Are carryover funds in danger of being cut?

    1. As described in the post, NIH institutes and centers (ICs) are annnouncing their respective approaches to meeting the new budget level; links to the IC’s announcements will be available via the NIH extramural financial operations page, questions on funding of individual grants should be directed to the appropriate funding institute or center.

  7. The endpoint indicator of success of the NIH extramural program should be the status of US biomedical community, primarily residing in the US Medical Schools. An increasing number of established investigators are losing their grants, at a time when medical schools and clinical departments have decreasing revenues from other sources (clinical revenues etc.) that allowed in the past the creation of bridge-funding mechanisms. Young investigators find it extremely difficult to enter into a research career and many are just dropping out, looking for other things. I have been funded by NIH continually since 1977 and I am in charge of a large department of Pathology in a School of Medicine. NIH has maintained an “all-or’none” funding style since at least 1977, in which investigators receive a grant or nothing at all, based on study section scores. This has been an inflexible approach, justified by a self-appointed mission of NIH extramural to just support “excellence”. Excellence is hard to define and many excellent investigators are currently being abandoned or choosing not to enter the research careers they had imagined and dreamed of. In the times of tight finances coming upon us, NIH should adopt a “gradient” system of funding and move away from the “all-or-none” approach of today. The approach should be to guarantee some degree of funding for up to the 35th percentile of study section scores, under which some grants would be receiving all money requested, and then, in a gradient scheme, going down to only half of the indirect, to no indirect, to only half the requested salaries, to only supplies and reagents, etc. This would bring back some stability to the academic biomedical community, currently in turmoil. None of the grant schemes I outlined would be refused by the schools of medicine or by the investigators. They are much better choices than no funding whatsoever, with the consequences of lost careers or gradually reduced salaries (as much as 10% per year) to the basic science investigators who do not achieve a high percent of salaries from their NIH grants. Bargaining with the manufacturers of biomedical supplies (antibodies being a good example) to provide some bulk discounts to NIH investigators would also help. The modular (under $250K) budgets have also made it impossible for the study sections to do what they were in the past able to do, namely cutting down the grant award so that only part of the grant (the best part) could be done in a funding of limited time period, etc. The current scheme of the “all-or-none” funding” has only helped NIH extramural accountants to make budgets in an easier way. Yet at the same time it has resulted in a situation of maximal instability in the biomedical research community. I believe that it is time to abandon the existing scheme of “all-or-none” funding and pursue creative approaches of spreading funding into larger number of biomedical investigators, with grants of multiple schemes of decreasing award value. This would sustain the endangered livelihood of many laboratories which, year after year, are closing down in increasing numbers in US medical schools, while the worst is yet to come.

    1. I fully agree with Dr. Michalopoulos: the all or none system of awards is damaging and punitive, especially to those labs who exist on a single RO1, and losing that one grant can close the lab, for good.

      However, the main issue that I do not see addressed in this decision to cut budgets is reigning in the indirect costs charged by institutions. While cutting the total amount of the grant does somewhat affect the institutional allowance, it disproportionately affects the investigator – cutting my modular budget by 20% means I have to cut down on salary, and lay off talented post-docs or technicians, however, this cut the indirect rates is a “drop in the bucket” for the institution.

      Some solutions: 1. cap indirect costs at 40-50% of direct costs, with restrictions so that institutions receiving the 50% indirect rates would be located in the parts of the country where the operating costs are highest. 2. Restrict indirect rates on subsequent grants, as in many cases, the lab space and administrative costs do not double when an investigator goes from one RO1 to two (or more).

  8. I do agree with Dr. Sadler on the need to control the excesses of indirect dollar allocation to the same lab with multiple grants. In an email above I advocated for a “gradient funding” approach, in which progressively less $$ are allocated to a grant based on its location in the spectrum of percentile scores awarded by the study section The objective of this would be to extend funding for up to the 35th percentile. Allocation of supplies and reagents alone without indirects for grants in the 25-35th percentile would be a much more acceptable solution to any investigator, in preference to no funding. I believe that the absence of indirects for that category of funding would not diminish the acceptability of these grants by the schools of medicine and by the investigators. There are multiple sources of research support from private funding and scientific societies or philanthropy which carry no indirect costs at all. I have not witnessed any such grant being returned to its source for that reason.

  9. The 10% that has been cut from each of my 3 R01s – there’s a name for it: we call it “the supply budget”. That or fire people.

    For my entire 15-year PI career NIH has been funding projects at less than it costs to do them. It’s always a struggle to make up the difference, but now labs are dropping like flies. This must be what it’s like to be in a dying industry. NIH-funded science seems to be following the path of the vinyl record.

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