Tate tries con job on opposing new NIH cost rule

When you’re playing the big con, your mark can’t know he’s been taken even after he’s been taken. If a recent communiqué by Louisiana State University System Pres. William Tate IV about changing federal regulations about National Institutes of Health grants indicates anything, Tate shows he would excel at utilizing information asymmetrically to score a big payday for his organization.

Last week, the NIH issued new guidelines about how awardees could utilize its grants. It said, barring unusual circumstances to be worked out between NIH and the awardee, that it would typically set indirect costs awarded at a ceiling of 15 percent. Indirect costs are for facilities, or depreciation on buildings, equipment and capital improvements, interest on debt associated with certain buildings, equipment and capital improvements, and operations and maintenance expenses; and administration, or general administration and general expenses such as the director’s office, accounting, personnel, and all other types of expenditures not listed specifically under one of the subcategories of “facilities.”

Typically, past NIH awards to university researchers averaged 27-28 percent in indirect costs, but the new policy impacts all current grants for expenses henceforth starting this week and forward as well as for all new grants issued. And from the reaction from higher education, you would have thought the Earth had stopped turning on its axis.

Almost immediately a number of institutions started braying long and loudly about how it would imperil mankind having these fewer dollars. Interest groups representing schools with health research even won a restraining order, although the order can address only those grants currently awarded and expensing even if eventually the judiciary rules retroactive imposition as violating contracts. For any new grants, the NIH can apply the articulated standard.

Somewhat relatively late to the whining party was Tate, on behalf of the LSU System, and he regurgitated the same indignation seen elsewhere, tailored to the system. He wrote that this would impact $192 million in current grants, implying that the 15 percent rate was insufficient to allow these to go forward, in that it would mean $12 million fewer dollars available to the system. Having to follow this rule, he alleged, meant the state “could lose hundreds of research-active faculty members, graduate assistantships, and research administration jobs. This brain drain will have long-term consequences, pushing top talent out of the state and weakening the very foundation of biomedical progress.”

Worse, without these extra bucks, “patients face fewer options, and our country falls behind in its competitive standing in biomedicine.” Worst of all, “Lives depend on it.” The horror!

Except that Tate, nor his fellow squawkers, acknowledge a couple of inconvenient facts. First, they accept grants all the time with a 15 percent ceiling – and lower, even all the way to zero. That’s because very rarely do private awarders, typically philanthropic foundations, accept proposals with a higher rate than that. By contrast, some institutions lard up indirect NIH costs to over 60 percent. Reviewing the LSU System’s NIH grants just awarded in 2024, which number 179 worth $85.7 million, these have indirect costs of about $21.4 million, or around 25 percent.

If he wants to be honest and forthcoming about the issue, Tate needs to release data on every single health grant received in 2024 from private sources, including the portion of indirect costs. Then he needs to explain why in aggregate the indirect costs charged to the government probably are around twice proportionally than those the system charged to NIH. Better still, he needs to explain where those extra taxpayer dollars really are going, as there is persuasive evidence these get sucked away into shadowy spending on pet ideological agendas that appropriators never would countenance and that would outrage the public if it only knew.

And, backing his boss, the weak excuse that LSU Vice Pres. of Research and Economic Development Robert Twilley gives doesn’t cut the mustard, that indirect costs also cover administration the federal government asks universities to handle when granting funds for research. So, private granters don’t ask for the same? And it really costs twice as much on average to do this NIH vs. foundations? He expects the thinking public to believe this?

Second, as the Republican Pres. Donald Trump Administration stresses about the billions in savings from not giving away bonus bucks, it plans to have that money plowed back into research grants. So, consider negated in two ways Tate’s assertions that stripping these dollars somehow threatens research, if not the lives and health of mankind: the dollars aren’t necessary to that research, as proven by the fact that the same kind of research is performed under grants with fewer indirect dollars, and that these dollars will be plowed back into research that actually would improve chances of better health outcomes.

And universities would be more than glad to accept this arrangement. A survey three years ago of 82 (although there were a few whose policies couldn’t be verified) representing over five-eighths of all research dollars accumulated showed almost all would accept at least 15 percent and most would accept zero. Of course; it’s free money, so they are more than willing to put a little skin in the game if they must.

Simply, by omitting these facts in their screeds, Tate and his fellow squealers just want to keep the grifting going by trying to generate falsely outrage and panic. But you are getting conned by them if you don’t know that there’s no reason taxpayers should allow this shell game with their dollars to continue, the ending of which won’t in any way harm the quantity and quality of health research generated.