Upon returning from the August recess on September 2, the House Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies (LHHS) voted along party lines to advance its budget for fiscal year 2026 (FY26). This bill covers key federal agencies funding FABBS disciplines, including the National Institutes of Health (NIH), Advanced Research Projects Agency in Health (ARPA-H), and the Institute of Education Sciences (IES). The Subcommittee rejected President Donald Trump’s proposed cuts to both NIH and IES but supported his budget for ARPA-H. On September 9, the full House Appropriations Committee (HAC) approved the bill on a party-line vote—see coverage in the upcoming FABBS newsletter.
[Full text of the Bill] [Bill Report]
Funding Levels
The LHHS Subcommittee approved approximately $46.9 billion for NIH in FY26, a small increase from FY25 levels and a clear rejection of the 40 percent cut requested in the President’s Budget Request (PBR). Importantly, while the Committee “commends the innovative proposal in the Administration’s fiscal year 2026 budget request to comprehensively reorganize,” its FY26 budget recommendation “reflects the NIH structure under current law” (Report p. 90). Although the corresponding Senate bill directed NIH to look to the Scientific Management Review Board (SMRB) to lead discussions on restructuring, the House bill notes that this topic is under the jurisdiction of the House Energy & Commerce Committee. FABBS has worked with colleagues to advocate for Congressional leadership and oversight in a deliberative and informed process for any reorganization.
Most of NIH’s institutes and centers (ICs) received either flat funding or small increases from their fiscal year 2025 budgets. Of interest to FABBS members, the bill includes funding for the BRAIN Initiative as provided in the 21st Century Cures Act, including $97.5 million for the National Institute of Neurological Disorders and Stroke and $97.5 to the National Institute of Mental Health (NIMH). The House number is slightly below the Senate Appropriations Committee’s (SAC) recommendation of $47.2 billion.
As noted, the Subcommittee agreed with the Trump Administration’s budget for ARPA-H, appropriating $945 million for the agency. This is a nearly 40 percent cut from ARPA-H’s FY25 budget of $1.5 billion. In contrast, the SAC recommended flat funding for ARPA-H.
The Subcommittee also cut the IES budget, but not nearly as much as Trump recommended. The House LHHS bill appropriates $740 million for IES, down from $793 million in FY25 but much higher than the $261 million (67 percent cut) proposed by the Administration. This number includes $245 million for Research, Development, and Dissemination, which received no funding in the PBR. Unlike the Senate bill, the House bill gave no funding to Regional Educational Laboratories (RELs), arguing that they provide “duplicative” assistance. However, these programs are very popular with the states and may see funding in a final FY26 bill. The Subcommittee did give a $1 million increase to the National Center for Education Statistics (NCES).
| FY26 PBR | FY26 Senate | FY26 House | FY25 | |
| NIH | 27,500 | 47,200 | 46,900 | 46,800 |
| ARPA-H | 945 | 1,500 | 945 | 1,500 |
| IES | 261 | 793 | 740 | 793 |
[View FABBS Federal Funding Dashboard]
Report Language
Appropriations bills are accompanied by reports that play an essential role communicating Congressional direction and priorities to federal agencies. Although not legally binding, federal agencies take careful note of this guidance. Regarding the science agencies, report language covers operations and administration, but also encourages the agency to pursue research in certain areas of interest to Congress. For example, the LHHS Bill Report highlights specific areas of health research for which behavioral and brain sciences are critical, such as Alzheimer’s, cancer screening and prevention, impacts of technology and digital media on youth, and suicide prevention. Last month, FABBS held a deep dive for our members to discuss FY26 Senate appropriations report language.
FABBS members will be particularly interested to note that there is no language in the Bill Report to change the existing facilities and administrative (F&A) cost model. Instead, the HAC recognized the concerns about the current model but also acknowledged that institutions’ negotiated reimbursement rates are often much lower than their actual reimbursement rates, subtly suggesting that F&A rates are not as problematic as others, such as the Administration, might argue. Although the House report does not directly acknowledge the work of the Joint Associations Group (JAG) on Indirect Costs, it does recognize that stakeholders have taken up the task of developing new recommendations, “valuable contribution to the dialogue about the future of F&A rates” (Report p. 126). (See full report language below.)
While the LHHS Bill Report provides extensive guidance to NIH,less is provided to ARPA-H and IES. The HAC encourages ARPA-H to focus on research related to fall prevention (including risk factors and intervention), Lyme Disease, mental health, and vaccine development. At IES and NCES more specifically, the HAC wishes to see more research on legacy status in college admissions and the impact of school cellphone bans. Notably, the report instructs the IES Director to submit an operating plan to the HAC within 90 days of the bill’s enactment. IES has been led by an Acting Director, Matthew Soldner, since April 2024 and there is no indication that the Trump Administration will nominate anyone anytime soon. (President Joe Biden’s nominee for IES Director, Adam Gamoran, was never officially confirmed for the role.) IES has also been decimated by staffing cuts since Trump took office earlier this year and it is unclear how such an understaffed agency will be able to carry out these Congressional directives.
Next Steps
The new fiscal year starts October 1, and it is unclear whether a final appropriations bill—approved by both chambers of Congress and signed by Trump—will be ready in time. Typically, the final budget numbers are somewhere between what the House recommended and what the Senate recommended, but there are some areas of significant disagreement in the current bills. If a compromise cannot be reached, Congress would need to pass at least one continuing resolution (CR) to keep the government running and avoid a shutdown.
Full Report Language
Facilities and Administrative Costs.—The Committee is aware of the longstanding cost-sharing model for facilities and administrative (F&A) costs, or indirect costs, between the Federal government and research institutions, and that this cost-sharing has an important role in supporting NIH-funded research. The Committee is aware of concerns about high negotiated F&A rates and that if such rates were lower, Federal funding could support more biomedical research. The Committee is also aware of interests in making the current model more transparent and efficient, and better tailoring costs to different types of research, among other possible changes. Additionally, the Committee understands that research institutions’ effective—or actual—reimbursement rates may be quite lower than their negotiated rates. Three researchers analyzed this difference for about 350 research institutions that account for roughly 90 percent of NIH’s extramural funding, in ‘‘Indirect Cost Recovery in U.S. Innovation Policy: History, Evidence, and Avenues for Reform,’’ a National Bureau of Economic Research working paper issued in March 2025. They found that most institutions’ negotiated rates were between 50 and 70 percent, averaging 58 percent, while their effective rates tended to be between 25 and 45 percent and averaged 42 percent. They found that while negotiated rates have increased during the past several decades, effective rates have remained relatively constant. The Committee recognizes recent efforts by interested stakeholders to develop recommendations for a new F&A model and notes that such efforts are a valuable contribution to the dialogue about the future of F&A rates. (p. 126)
