Judge temporarily halts slash in federal research spending that could force major cutbacks at WSU and UW

A federal judge on Monday blocked a directive to slash federal research funding to public universities and research centers throughout the country, a plan both the University of Washington and Washington State University say would have far-reaching effects on their programs and likely result in layoffs.

The order from Judge Angel Kelly of the United States District Court for the District of Massachusetts on Monday came hours after Washington Attorney General Nick Brown joined 21 other states in a lawsuit to block the National Institutes of Health plan. On Friday, the agency announced it would cap the reimbursement rate it provides for indirect costs at research institutions at 15%, which is far below the negotiated rate institutions previously agreed to.

“Within only a few hours of the lawsuit filed by our coalition of more than 20 attorneys general, a federal judge paused the President’s illegal cuts to NIH,” Brown said in a news release Monday. “The judge’s order preserves funding for the lifesaving and life-changing medical research happening in Washington state, and the jobs of the employees doing this vital work.”

Kelly has scheduled a hearing for Feb. 21, and has instructed the National Institutes of Health to provide regular updates to the court on the steps it has taken to ensure payments are disbursed properly.

According to the NIH, more than a quarter of the agency’s funds provided through almost 50,000 competitive grants in fiscal year 2023 paid for indirect costs, including for facilities and administration not directly tied to a specific project. Of the $35 billion the agency provided through grants, $26 billion went to direct costs for research, while $9 billion went to nondirect costs.

As it announced the new reimbursement rate Friday, the agency said it was “obligated to carefully steward grant awards to ensure taxpayer dollars are used in ways that benefit the American people and improve their quality of life,” and noted many private grants either do not provide reimbursement for indirect costs or do so at a 15% rate or less.

“The United States should have the best medical research in the world,” the NIH wrote. “It is accordingly vital to ensure that as many funds as possible go towards direct scientific research costs rather than administrative overhead.”

The 15% rate, the agency wrote, allows “grant recipients a reasonable and realistic recovery of indirect costs while helping NIH ensure that grant funds are, to the maximum extent possible, spent on furthering its mission.”

On Monday, Gov. Bob Ferguson said in the attorney general’s release the state “is a leader in cutting-edge scientific research. If the Trump Administration’s unlawful action is allowed to go forward, it would be disastrous for the important work happening at our research institutions.

“I will work with our Attorney General and experts at our universities to ensure these dollars are protected from unlawful federal overreach.”

According to the lawsuit, Washington State University previously negotiated an indirect cost rate of 53% for on-campus research and 26% for off-campus. The new 15% rate, the lawsuit states, would instantly cut over $5 million from WSU this year alone, “sending shockwaves throughout WSU, and significantly disrupting the substantial progress.”

T. Chris Riley-Tillman, provost and executive vice president at WSU, wrote in an email to university staff Monday afternoon that the “federal landscape is shifting rapidly,” and leadership would begin scenario planning to “encompass a range of possibilities, including potential hiring freezes, travel freezes, carry-forward reductions, and permanent reductions to core funding.”

“All options need to be discussed to ensure WSU’s ability to respond quickly and with agility,” Riley-Tillman wrote.

In the email, which was sent before a federal judge froze the executive order, Riley-Tillman wrote that “we will focus on and preserve our strengths – and we believe that scenario planning in advance of a time when fiscal realities may require contraction is the best way to engage our community in thinking about choices that may need to be made.”

Were the rate to take effect, the lawsuit states researchers “would likely be forced to significantly reduce or eliminate research animal colonies” at the Washington Animal Disease Diagnostic Laboratory.

“This loss would set WSU researchers back decades, endangering not just the livelihoods of the dozens of employees and staff at WSU who would likely have to be laid off or furloughed, but also denying the public at large the benefit of the critical research and real-time data that these facilities give, such as the regular testing of eggs, poultry, and milk for diseases (including avian influenza),” the filing states.

The university likely would also close some research facilities. The cuts, according to the lawsuit, would also decimate the Elson S. Floyd School of Medicine, “grinding to a halt their lifesaving research into Alzheimer’s disease, cancer, speech pathology, and substance abuse, endangering the viability of WSU’s clinical trials and the wellbeing of their patients, and severely hindering the ability of WSU to provide effective education to the next generation of doctors.”

According to the lawsuit, a 15% rate at the University of Washington “would instantly deprive UW of hundreds of millions of dollars it currently puts toward conducting the vital research and medical care contemplated by the NIH grant awards.”

The lawsuit states that the university “long relied” on the ability to negotiate reimbursement rates, and that “nothing could have prepared” the university for funding cuts. According to the lawsuit, the change would result in a loss between $90 and $110 million to UW Medicine.

“The impacts would be devastating not only to the many staff members and faculty who would likely lose their livelihood, but could also prove deadly,” the lawsuit states.

Monday’s lawsuit is the fourth Washington has brought or joined against the second Trump administration. Brown previously filed a suit in federal court to block the federal government’s attempt to end birthright citizenship and joined states throughout the country that sued after the White House attempted to freeze federal funding and grants.

Last week, Brown joined Minnesota and Oregon in a lawsuit to stop President Donald Trump’s executive order blocking funding to medical institutions that provide gender-affirming care to those under 19 years old.