NIH Fiscal Policy -- FY 2008: WTF!?

Jan 31 2008 Published by under NIH Budgets and Economics

From http://grants.nih.gov/grants/guide/notice-files/NOT-OD-08-036.html

The following NIH fiscal policies are instituted in FY2008:
Non-Competing Research Awards: The FY 2008 appropriation as specified in P.L. 110-161 provides NIH a 1 percent inflation allowance to NIH investments in research supported by research grants. Implementation requires a reduction to previously established commitments, based on a 3 percent inflation allowance. Accordingly, each Institute and Center (IC) will use its own discretion to allocate the adjustment among its non-competing research grants (modular and non-modular) to ensure compliance with the 1 percent inflation allowance provided in its FY 2008 committed level. Future year commitments will be adjusted accordingly, as consistent with the FY 2007 fiscal policy. This policy does not apply to Career Awards, SBIR/STTRs, and Ruth L. Kirschstein-National Research Service Award (NRSA) Individual Fellowships & Institutional Training Grants.

This is the section on non-competing awards, which have been taking severe cuts since the doubling of the NIH budget ended in 2003. Don't try to figure out what it means, yet. How did this work in past fiscal years?


First off, pretty much all R01 awards take a cut when the application gets funded. Let's take as an example a full modular R01 ($250,000 direct costs per year) that you asked for five years (total of $1,250,000. If you get four years duration at 80% that's $200,000 awarded to your institution for the first year, and a future years committment of $200,000 per year for the last three years.
For the past few years, non-competing awards (i.e., the second, thrid, and fourth year awards) have been cut between 2.5% and 3.0%. "Future years committment" is a technical term found in the official Grant Award document you receive from NIH. It sounds pretty damn solid, no? Well, the cut in a non-competing award is also applied to remaining future years committment. Not too solid.
Let's add up your total award for the entire grant (assume 2.75% cut per year): Year 1 = $200,000; Year 2 = $200,000 * 97.25% = $194,500; Year 3 = $194,500 * 97.25% = $189,151; Year 4 = $189,151 * 97.25% = 183,950. Total: $767,601. What was "approved" through peer review was a $1,250,000 grant, ended up through administrative cuts as only 61% of that. These kinds of cuts are less newsworthy than people not getting any grants or losing the only ones they had, but they are as much, if not more, destructive to the biomedical research enterprise.
Anyway, back to the immediate point, which is that the 2008 fiscal policy does not establish an explicit NIH-wide percentage cut on non-competing awards and future committments. Rather it leaves it to the discretion of the individual Institutes within NIH--neurological, heart, cancer, infectious disease, etc--subject only to what they refer to as an inflation allowance on previously established committments that has been cut from 3% to 1%.
I have no damn idea what exactly this means, so if any readers do, chime in! I just hope I get cut less than last year and the year before. So far, the cuts have been on a worsening annual trend, and I wanna know where I'm at for this fiscal year.
The day this notice was published, I e-mailed my program officer to ask him if he has any idea yet what our institute has in mind. He was not amused.

12 responses so far

  • whimple says:

    Why don't you ask your University to reimburse you for the year-over-year direct cost decreases out of their indirect costs? 🙂

  • PhysioProf says:

    Hey, that's a great idea! As long as I'm asking, I think I'll throw in an endowed chair, the parking space next to the Dean, and another 1000 square feet for my lab.
    If you have any other ideas, make sure you let me know soon, so I have time to incorporate them in my pitch.

  • whimple says:

    Oh wait, yes I remember now... it's because they couldn't care less whether you live or die and aren't the least bit interested in what your research is, so long as you keep bringing in the cash.

  • Orac says:

    Oh, great. My noncompeting renewal goes in in March...
    I'm with you. I just hope my budget gets cut less than 3% this year. Of course, salaries keep going up without fail. To pay it the money has to come out of the supply budget. Of course, at this rate my supply budget will soon be zero.

  • Lovely, Professor Ray-of-Sunshine.
    Just put in my non-competing renewal but no award letter yet for new project year - I thought I had read in the Cancer Letter that NCI was at least going to hold it to our usual 2.67% cut.
    So, I got cut 28% at award and, as you illustrate, cut another 2.67-3% annually, all while salaries were required by the institution to increase 4-6%. Not only do these compound cuts make doing the project a joy in year five, but then the budget for the competing renewal will be limited based on the final year award (not the original committed budget).
    Did any of you people get this stuff in grad school? I've gotta say that I have no formal training in doing 50% of the job duties required of a P.I. I am pretty good, however, at screaming and convulsing in the corner every month when I get my incomprehensible project reports from the Borg of accounting.

  • Orac says:

    Not only do these compound cuts make doing the project a joy in year five, but then the budget for the competing renewal will be limited based on the final year award (not the original committed budget).

    Which is why I'm seriously considering not renewing my R01 and trying to get a different one. I doubt I'll do it, but it's something to consider.
    One of the things that these continual cuts coupled with the mandated 4% a year increase in all salaries caused for me was finding that I would have literally zero money for supplies by year four. When my technician resigned a year ago, I decided not to replace him for 6 months in order to save money. Then, thanks to my lovely university, when it came time to finally try to replace him HR tried to foist "bumps" (people laid off elsewhere in the university) on me. Invariably these people had been around for 10 years or more and were technicians making a salary of $45,000 (plus 35% fringes, baby!). My thought was that, if I had to pay that much, I might as well get a postdoc--except that I don't have that much.

  • neurolover says:

    Fascinating. But, I don't completely understand. When you do your math, are you saying that you actually get 186K, instead of 200K, I mean, in raw dollars, unadjusted?
    Not knowing anything, I would have read the NIH description to mean that the amount would go up less, rather than that it would actually go down.
    The math is impossible, and it does get balanced irrationally.
    (You actually scream and convulse in the corner about your project reports? I let my alternate personality take care of them -- otherwise I'd go crazy (Oh, wait, having an alternate personality means I"m already crazy). They're another example of CYA by universities, no? get us to sign incomprehensible forms so that when they get in trouble, they can say that it's not their fault, even though the system would break if people didn't sign the incomprehensible forms.)

  • DrugMonkey says:

    "When you do your math, are you saying that you actually get 186K, instead of 200K, I mean, in raw dollars, unadjusted?"
    That's what he's saying.
    The NIH funding institute (NIDA, NIMH, NIGMS, etc) approves your grant which has, say, 5 years proposed at $200,000 per year. But they don't have to give you this amount, they can "adjust" it for any of a number of reasons.
    One of those reasons is "We want to keep the raw number of funded grants for our institute at a certain number. One way to do this is to lop a few percent off of all the grants we carry. Then we can use that money to fund new grants. And nobody* will be the wiser".
    *nobody that counts. read, Congressional interests which may keep track of how many grants one of the ICs has funded. your general media journalists, perhaps. not meaning the scientists who are supposed to actually get some science done with MagicShrinkoBudget...
    As PP points out, the really incredibly crappy part of this is that it iterates for each subsequent year of the grant. The next-year cuts are applied to the prior years' (already-cut) number.
    Great one PP.

  • PhysioProf says:

    NIH awardees have been so broken to this shit that it doesn't seem remarkable. I am always amused by the reactions of normal people when they hear about it.

  • revere says:

    It's a pretty bad situation for future scientific leadership, though. I'm expecting a 1.9% cut of my last year's Notice of Grant Award which in turn was 2% under the previous NGA so I've gotten cut year on year on top of inflation, etc. Not as bad as the year I took a 33% hit -- yes 33% on year 3 (I think; I've repressed it) and so did all the PIs on my rather large Program Project.
    The major point, though, is that young post docs can't get funded (avg. age of RO1 now is 43 y.o.) and neither can the mid levels coming up for tenure. Result: we are losing a generation of scientific leaders and Director Zerhouni is busy getting is resume ready for some academic slot next year and not paying attention.

  • DrugMonkey says:

    "we are losing a generation of scientific leaders and Director Zerhouni is busy getting is resume ready for some academic slot next year and not paying attention."
    I don't know that we can put this all on the Great Zerhouni. In the past year there has been blowhardery, yes, but also some real steps to improve things. the K99/R00 being one example, the rapid turn-around on review another. NIH can do more, and that's a theme I pursued last year on WP and will continue here. My point is that there are fixes that need to be put in place at the first point of contact, namely study section.
    but I'll also underline revere's point about scientific leadership. I think many people focus on the single-R01 level and assume hey, no biggie, if the boomers retire/die off we can just fund whoever is just coming out of postdoc'ing and we'll have a seamless replacement. What we'll be missing is the cohort of GenX'ers who have been preparing over 10-15 years as PIs and are ready to coordinate the big projects, centers and vast translational efforts. They'll be still trying to define their science, get operational stability, etc and won't have the interest or skills to step in to the Center Director* type positions.
    *Admittedly, I've had my criticisms of the big mechanisms. but they do have some positive aspects and they aren't going away any time soon

  • PhysioProf says:

    What we'll be missing is the cohort of GenX'ers who have been preparing over 10-15 years as PIs and are ready to coordinate the big projects, centers and vast translational efforts. They'll be still trying to define their science, get operational stability, etc and won't have the interest or skills to step in to the Center Director* type positions.

    Fuck 'em. This way there's more room for me

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