Last Thursday, the House passed another bipartisan minibus, a legislative package combining three of the 12 federal appropriations bills, including the Labor, Health and Human Services, and Education (LHHS) spending measure. The agencies covered by this minibus are currently operating under a continuing resolution (CR) that expires January 30.
The LHHS bill is a win for the scientific community, given its funding levels for key federal health and science agencies as well as critical report language protecting those agencies from executive overreach.
Funding Levels
Most important for FABBS members, the LHHS bill covers funding for the National Institutes of Health (NIH), the Advanced Research Projects Agency for Health (ARPA-H), and the Institute of Education Sciences (IES).
In the minibus, the House appropriated $47.216 billion to NIH, a small increase of about $300 million over the fiscal year 25 (FY25) budget. Most institutes and centers (ICs) received flat funding, but some – such as the National Cancer Institute – did see increases in their budgets. Notably, the bill includes $195 million for the BRAIN Initiative, with the National Institute of Mental Health (NIMH) receiving an addition $2 million for this program. ARPA-H received flat funding of $1.5 billion while IES received $789 million, a small decrease from previous years’ budgets. These final numbers are much closer to the Senate’s initial budget proposals than the House’s.
[See FABBS Federal Funding Dashboard]
Report Language
The minibus also includes an accompanying joint explanatory statement for the LHHS bill which communicates congressional intent to the agencies covered. Federal agencies take careful note of this guidance. The report language covers operations and administration and also encourages the agencies to pursue research in certain areas of interest to Congress. This statement indicates the language in the House and Senate versions of the LHHS bill, passed last summer, holds in the current bill unless explicitly negated (see previous reporting on the Senate and House report language). Although the statement does not include any new language for ARPA-H or IES, there are several important sections regarding administrative issues at NIH.
New language instructs NIH to maintain practices that “ensure a pool of qualified, competitive applicants” when hiring new IC directors (p. 41-42; see full language below). Recently, FABBS has been in regular contact with key Senate offices regarding our concerns about the lack of transparency and rushed nature of the hiring process for the 15 current IC director vacancies. This new language suggests these offices have been listening and want to mitigate those concerns.
Additionally, the statement reiterates that NIH cannot change its indirect cost rates without approval from Congress (p. 41), something the agency tried to do early last year (i.e., by setting a 15 percent cap). It also places limits on multi-year funding (p. 42-43), reflecting concerns from the scientific community that this mechanism limits the total number of awards that NIH can make each year.
The statement does not address reorganization at NIH, nor does it say anything about restructuring the Department of Health and Human Services (HHS). The administration has taken steps to carve up several existing HHS offices and combine pieces of them into a new Administration for a Healthy America (AHA). However, all of these offices remain intact in this minibus. Several – including the Centers for Disease Control and Prevention (CDC), the Substance Abuse and Mental Health Services Administration (SAMHSA), and the Health Resources and Services Administration (HRSA) – maintain flat funding from FY25 while others – e.g., the Agency for Healthcare Research and Quality (AHRQ) – see small decreases.
Furthermore, both the explanatory statement and the minibus itself include significant language intended to curb some of the disruptive actions taken by HHS last year. First, the statement directs the HHS Secretary to consult with the Appropriations Committees before terminating any grants funded by the LHHS bill (p. 69). Second, the LHHS bill requires HHS to “support staffing levels necessary to fulfill its statutory responsibilities including carrying out programs, projects, and activities funded in this title of this Act in a timely manner” (p. 289). The bill also requires HHS to notify the Appropriations Committees of any plans to reorganize the department and allow for independent review of those plans.
Next Steps for LHHS
The LHHS bill is now part of a six-bill minibus awaiting final Senate approval. Although an initial vote was expected on Thursday, recent reporting suggests that the package may be held up due to Democrats’ strong opposition to funding for the Department of Homeland Security (DHS), which is also included in the minibus. Some Democratic Senators – including Senate Appropriations Vice Chair Patty Murray (D-WA) – have suggested removing the DHS bill from the minibus for a separate vote; this way, the remaining five bills – which have bipartisan support – could move through the chamber without issue. At press time, Republicans have not yet indicated how they will move forward.
Full Report Language – NIH
Institute and Center (IC) Directors.- The agreement directs NIH to maintain its longstanding practice of including external scientists and stakeholders with appropriate subject matter expertise and familiarity with the relevant ICs, as part of the agency's search to fill the current IC Director vacancies. The agreement supports allowing sufficient time for application submission to ensure a pool of qualified, competitive applicants. Until all vacancies are filled, the agreement directs NIH to brief the Committees on a quarterly basis on such efforts, including on the search committees and process, outreach to identify and encourage applications from a broad community, the anticipated time line for filling such vacancies, and steps to maintain leadership and program oversight continuity during any IC Director transitions. Finally, within 60 days of enactment of this Act, the agreement directs NIH to provide a comprehensive report on the approval process for IC Director hires, as well as internal guidance documents that address the appointment, reappointment, assessment, and termination of IC Directors. Such report shall include the approving authorities by agency, Department, and Office for the current IC Director vacancies, as well as previous IC Director searches that took place during fiscal years 2022-2026. (p. 41-42)
Indirect Cost Rates.- The agreement recognizes that indirect cost recovery has been essential for supporting research at universities, nonprofit laboratories, medical centers and other entities eligible for Federal research awards and is key to sustaining U.S. leadership in scientific research and technological innovation. The agreement acknowledges that there is room for improvement in the system used to identify and recover indirect cost rates under the Uniform Grant Guidance, particularly with respect to the need for greater transparency into these costs. Various models have been suggested to achieve these improvements, including the Financial Accountability in Research (FAIR) model advanced by the Joint Associations Group on Indirect Costs (JAG), which the Committees believe merit further consideration. Therefore, the agreement directs the departments and agencies funded in the Act to engage in discussions with the Committees on proposals to achieve these improvements, including on the FAIR model. Under this agreement, neither NIH, nor any other department or agency, may develop or implement any policy, guidance, or rule, including publication of a notice of proposed rulemaking, that would alter the manner in which negotiated indirect cost rates have been implemented and applied under NIH regulations, as those regulations were in effect during the third quarter of fiscal year 2017. (p. 41)
Multi-Year Funding.- The agreement notes that the fiscal year 2026 budget submission states that in fiscal year 2026 NIH proposes to continue a fiscal year 2025 policy to reserve half of the agency's budget allocation for competing RPGs for awards that fully fund their outyear commitments as part of the initial grant obligation. The agreement notes strong concern about the impact of this policy on application success rates and the consequent reduction in the number of grants NIH can fund; including on the impact for institutions who receive only a few NIH grants. The agreement includes a general provision to limit the amount of funds that can be obligated for awards that fully fund out-year commitments and directs NIH to fund as many new awards as possible based on meritorious applications. The agreement urges Institutes· and Centers that receive funding increases in fiscal year 2026 to obligate additional funds to support new and competing research project grants. The agreement directs NIH to submit the report under this heading in Senate Report 119-55. Additionally, NIH is directed to provide the Committees with an analysis of the types of research funded by this model in fiscal year 2025, and the selection criteria to identify grants to be funded by the multi-year approach. Throughout fiscal year 2026, NIH is directed to brief the Committees no less than monthly on the status of grant announcements, applications, awards, continuations, terminations or cancelations. Such briefing shall include a report on grant awards by Institute or Center that fund more than the current year of performance. (p. 42-43)
