A federal judge extended a temporary order blocking a National Institutes of Health (NIH) decision from taking effect after lawyers representing states and research institutions argued the NIH lacks the authority to unilaterally impose “unlawful cuts” of billions of dollars in negotiated research funding.
U.S. District Judge Angel Kelley extended the temporary restraining order Friday afternoon, which was set to expire on Monday, until she makes a final decision on the NIH’s plan to cap indirect cost rates. Indirect costs fund everything from shared scientific equipment to lab and facility construction and maintenance and are an “absolutely fundamental part of innovative science,” according to the University of Wisconsin-Madison.
Kelley said at the end of the hearing she would issue a ruling on a preliminary injunction “as quickly as I can.”
The showdown started when the NIH announced on Feb. 7 their plan to cap indirect cost rates at 15%, a sharp reduction from the current average rate and well below many major research institutions, including UW-Madison, whose rate ranges from 26% to 55.5%. The cap went into effect Feb. 10, though a lawsuit filed by 22 state attorneys general and heard by Kelley six hours later temporarily blocked the decision in their states. Kelly later expanded the temporary pause nationwide.
The NIH’s decision provoked a chorus of alarm from researchers who warned it would devastate universities and science. UW-Madison provided information to the lawsuit warning the decision would result in the loss of $65 million in 2025, with a comparable amount for following years. The university said the cuts would have an immediate impact and would “significantly disrupt” ongoing research on cell therapies to treat cancer and heart attacks and the quest to develop treatments and a cure for Alzheimer’s.
Sixteen attorneys general issued a joint statement before the hearing, contending the NIH’s cuts would force universities to reduce “groundbreaking” research efforts and imperil their ability to train future researchers and innovators.
“The Trump administration’s attempt to cut research funding at thousands of research institutions across the country is not only unlawful; it undermines public health, our economy and our competitiveness,” the statement said. “There are laws in place that protect this funding, and the president cannot simply toss those laws aside.”
During Friday's hearing, Kelley asked both sides to explain whether the reduction of funding would cause “irreparable harm” to universities. The NIH has argued the decision could stimulate research by eliminating what they view as overhead, while researchers warned the decision would set back science by years by forcing cuts to research.
Indirect cost rates — which vary between universities — are carefully negotiated with the federal government based on each institution's unique needs, and lawyers representing states and universities argued the NIH lacks the authority to unilaterally deviate from negotiated rates.
In several appropriations bills, including one from 2024, Congress specifically prohibited NIH from changing how indirect costs are determined. Trump had previously attempted to reduce the indirect cost rate for research institutions to a categorical 10% in 2017.
Gavin Escott is the campus news editor for the Daily Cardinal. He has covered protests, breaking news and written in-depth on Wisconsin politics and higher education. He is the former producer of the Cardinal Call podcast. Follow him on X at @gav_escott.
