#094 NIH & Sovereign Wealth Funds

Hash #94: NIH Funding Cuts and U.S. Sovereign Wealth Fund 

The National Institutes of Health (NIH) has recently implemented a policy capping indirect cost rates at 15% for all grants, a significant reduction from previously negotiated rates that often ranged between 25% to 70%. This change, effective February 10, 2025, has raised concerns among non-profit research institutions, as indirect costs are essential for covering expenses like facility maintenance, utilities, and administrative support. Critics argue that this cap could severely impact the financial viability of ongoing and future research projects, potentially hindering scientific progress. In response, 22 state attorneys general have filed lawsuits challenging the policy, leading to a temporary restraining order against its implementation.

In a related development, President Donald Trump has issued an executive order directing the Treasury and Commerce Departments to develop a plan for a U.S. sovereign wealth fund. Such funds are state-owned investment vehicles that invest in various assets to benefit the country's economy and citizens. The proposal aims to create a fund that could enhance the nation's financial stability and global economic influence. However, details regarding funding mechanisms, investment strategies, and governance structures remain sparse, and the initiative has sparked discussions about its potential risks and benefits.

AP News - Scientists warn Trump's medical research cuts...

Investopedia - Trump wants a Sovereign Wealth Fund. How would that work?

The Atlantic - A New Kind of Crisis for American Universities