Congress Locks In $48.7 Billion for NIH, Blocks Indirect Cost Cap
March 5, 2026 · 2 min read
Arthur Griffin
The FY2026 spending package signed into law in January gives the National Institutes of Health $48.7 billion in discretionary funding—a $415 million increase over FY2025 and a decisive rejection of the Trump administration's proposed 40% budget cut.
The Indirect Cost Fight Is Over—For Now
The most consequential provision for university-based researchers isn't the topline number. It's the explicit block on the administration's proposed 15% cap on indirect cost reimbursement rates.
Indirect costs—the funding covering lab facilities, equipment maintenance, compliance infrastructure, and research administration—typically run 50–65% of direct costs at major research universities. Capping them at 15% would have forced institutions to either absorb the shortfall or abandon entire research programs. The spending bill includes protective language across all relevant HHS agencies preserving negotiated rates.
For principal investigators writing NIH grants this spring, the message is straightforward: budget using your institution's established F&A rate. The cap is dead in FY2026 appropriations.
Flat Funding Still Means Hard Choices
The $415 million increase sounds substantial until inflation enters the picture. In real terms, NIH purchasing power remains essentially flat—continuing a decade-long trend that the biomedical research community warns is eroding U.S. competitiveness in life sciences.
Grant success rates hovered around 21% in FY2025. With no meaningful budget growth, competition for R01s and other investigator-initiated awards will remain fierce. Early-career researchers face particular pressure, though the bill maintains dedicated funding streams for new investigators.
What Grant Seekers Should Know
The same spending package preserves Pell Grants at $7,395 and funds the Institute of Education Sciences at $790 million—more than triple the administration's $261 million request—signaling bipartisan commitment to education research even as other discretionary programs face scrutiny.
For researchers navigating NIH's competitive landscape, Granted tracks open solicitations and deadline changes across all NIH institutes. Detailed analysis of how the FY2026 budget affects specific research programs and institutes is available on the Granted blog.