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So the Trump administration has made an effort to limit "indirect" research costs, those research funds which institutions charge on top of a research grant to pay for expenses which cannot be attributed to an individual research project, for items like building maintenance, grant writing staff, and administrative staff. The new policy, effective February 10, 2025, caps the indirect cost rate at 15% for all NIH grants, both new and existing. People in my social circle are watching the court battle over this with baited breath. One of their institutions charges 55%, and another one charges 70% (which appears to be the legal maximum). From this perspective, 15% seems very very low, but it appears the average is around 27%.
I recently talked to some of my Korean researcher friends, and in Korea indirect costs are capped at 17% (and come out of the allocated grant money, so they are considered during grant proposal submission). Of that 17%, the institution even sets a few percent aside to give "miscellaneous funds" to Professors. My friend (a former Resident) said that these miscellaneous funds (which are completely unregulated) were critical to keeping medical professors on the job after an anti-corruption law banned them from taking "gifts" from patients: they were frequently spent on personal items, team dinners, and alcohol. In my experience they were used to purchase high-end computers for data analysis. But the point is that 17% leaves the institution with a surplus.
I'm left wondering if indirect costs in the US (now two to four times higher than those of Korea) are a result of perverse incentives. The NIH negotiates these after grants have been granted. If the US had counted these expenses against the grant value prior to grants being granted (as Korea does), would professors have been incentivized to lobby their institutions against administrative bloat?
I tried to find how these costs have changed over time, and it looks like they have risen by a few percent in the past decade, but every grantmaking agency has different numbers and it is a mess, with more variance between agencies than change over time.
I estimate public construction projects in a major Democratic city, which has plenty of bureaucracy baked in. Our general job costs (project managers, project-related office spaces, permits, etc.) usually comes out to about 12% of the total, assuming we actually want the job. Additional overhead/profit is usually another about 15-20% on top of it (note the profit part of that calculation, which theoretically shouldn't exist for nonprofit government grants).
I don't know how universities are run, but there's no reason I can think of that they should need 70% additional funds beyond the cost of the research itself unless the original grants include almost none of the actual funds. That's an extreme number.
One reason is maintaining the facilities and very expensive machines that hard science labs use, 70% extra makes sense for those
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The immediate question I have is how are Korean universities funded? My understanding is that research grant overhead is a significant chunk of the total funding of US universities. Do Korean universities get more funding for their general administration and capital costs from other sources?
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Irregardless of whether Trump broke the law, this Biden appointed judge (a black Lesbian, what a surprise) is making a fool of herself and the law by blocking this with her TRO (temporary restraining order).
Firstly, monetary damages cannot be irreperable harm, and this is a settled legal principle for hundreds of years. You don't need to cite any Supreme Court case because it's a core principle in common law, in every US court not just federal, and every lawyer and judge knows this. And without irreperable harm you can't have a TRO. https://www.law.cornell.edu/wex/irreparable_harm
Secondly, a TRO must have an end date. That's part of what makes a TRO temporary. So she clowned any illusion of being a real judge by writing this:
https://storage.courtlistener.com/recap/gov.uscourts.mad.280609/gov.uscourts.mad.280609.8.0_1.pdf
https://www.law.cornell.edu/rules/frcp/rule_65
Less sneering, please. Regardless of how you feel about the order, you should be civil about it.
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This is a general principle, but there are always exceptions. Most of these involve judgment-proof defendants. Say Fred and Sam are having a dispute over a driveway Sam uses to access his business. Fred puts up concrete barricades on the disputed right-of-way, denying access to Sam or any customers, preventing use of the business. Sam cannot operate his business and sues Fred for trespass. Sam may be able to calculate that he's losing $5,000/day in revenue while the barricades are up; under the rule, he wouldn't be entitled to a TRO. Except any court would grant him one, because if the case takes a year to resolve, it's unlikely that fred will be able to come up with $1.8 million in damages.
This example is based on a case I actually dealt with a couple years ago except the defendant wasn't some random guy but a railroad (it was a dispute over a crossing agreement). I was still able to get a TRO, not because there was any question of the railroad's ability to pay damages but because I convinced the judge that my client couldn't afford the mortgage and ongoing maintenance costs to the property without the property generating any revenue. Damages would be cold comfort if the property were foreclosed on and he were forced into bankruptcy.
Another case I was peripherally involved with during my time in oil and gas involved a contractual dispute between Warren Steel and a coal company whose name I can't remember. (This is a grossly oversimplified version) Warren had an ongoing contract with the company that required them to deliver coal to the mill a few times a week. They were way behind on payments and owed hundreds of thousands of dollars. The coal company said they weren't getting any more shipments until they paid what was overdue. Warren sued the coal company for breach of contract arguing that future deliveries weren't conditioned on payment for prior deliveries. From here it gets a bit complicated. The typical remedy here would be for Warren to buy coal on the spot market and collect the price difference from the breaching coal company. Warren argued that their financial position was precarious (there was no denying this based on their payment history) and that they would be unable to secure credit to buy at sharply inflated spot market prices. If the coal company didn't make their next scheduled shipment, they wouldn't be able to make any steel, would have to shut down the mill, and any hope of them remaining operational would be gone. the court issued the TRO and told the coal company to make the delivery. In any event, Warren Steel filed for bankruptcy a few days later.
And who could forget the man himself, Donald Trump. If you remember, last year he was on the wrong end of a nine-figure civil judgment, and was told that if he wanted to stay the judgment pending appeal he would have to post a bond of $450 million within 30 days. This is about as clear-cut as it gets—he had $450 million in assets. If he posted the bond and won the appeal, he'd get the money back. So what's the problem? He successfully argued that since no insurance company would take real estate as collateral, he would have to liquidate it at fire sale prices, causing irreparable harm. The judge agreed and reduced the bond to something an insurance company could manage.
Most court orders aren't written by the court. If I'm asking for a TRO, I have a copy of the order with me and I hand it to the judge to sign if she decides to grant it. In most cases, you're asking for the TRO in motions court early in the process before the case is listed for trial and assigned a judge.After that it has to go to calendar control for them to schedule a hearing for a preliminary injunction. By law that hearing has to be within 14 days, but the judge who's signing it doesn't know when that's going to be; the upshot is that we put the 14 day max in the order.
In this case, the judge who issued the TRO wrote the order herself after the hearing had already been scheduled. She's hearing arguments tomorrow, after which, she'll either lift the order entirely or grant an injunction. There was no reason to put a specific expiration date because it's implied that she's going to lift it after the hearing.
Am I alone in thinking this was pretty unfair to the coal company? I mean, there was clearly a serious risk that Warren wouldn't ever be able to pay, even upon bankruptcy liquidation, meaning the coal company was essentially being ordered to give them coal for free.
Like I said, this case was significantly more complicated than I made it out to be in the post. What the case actually turned on was a provision in the Uniform Commercial Code meant to address situations such as this. A complicating factor was that Warren wasn't even technically in arrears. The terms IIRC called for something like payment within 30 days plus escalating late fees after that, with breach not occurring until the bill was 6 months overdue. Warren had never once paid "on time" but had waited until the last minute and withheld the late fee. There was some argument about whether the coal company had waived that contract provision by accepting payment without protest, and the coal company was arguing that this was evidence that they were juggling their payments to see what they could get away with, and there were rumors of an impending bankruptcy, and that yes, an order requiring them to comply with the contract terms would essentially mean giving away something like $400,000 worth of coal for free.
The case boiled down to the UCC provision allowing the request for reasonable assurances of performance. The judge was sympathetic to the coal company, but he said that if they had concerns they could have requested reasonable assurances at any time, and that anticipatory repudiation of the contract wasn't proper. Then the argument became how long Warren had to provide the assurances and whether the coal company could suspend performance until it received assurances. This is where the whole irreparable harm thing came in, with Warren saying that if they didn't get the Friday shipment that over a thousand employees would be laid off by the end of the weekend and the mill would be idled indefinitely. The final ruling was that the coal company had to make the shipment but that Warren had to make reasonable assurance before the next shipment, and he would dismiss the breach of contract suit as soon as the shipment had been received.
In a general sense, no, it isn't fair, which is why the UCC has provisions for dealing with that kind of situation. If the coal company had concerns it could have asked for assurances a week prior. In any business transaction, there's always some chance that the other party isn't going to hold up his end of the bargain, and that's the risk you take doing any business. The coal company could have protected itself with a condition requiring prepayment back at the formation stage, but they didn't, even though Warren was only a few years removed from coming out of a previous bankruptcy. Up to this point, Warren had held up their end of the deal, just not in a way that inspired much confidence, and there were rumors that they were insolvent. Furthermore, if Warren had already filed for bankruptcy this question wouldn't have even come up, because suppliers have to keep honoring contracts during a bankruptcy.
How come they hadn't repudiated the contract if they didn't pay the late fees?
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Hmm point taken. You're definitely right about this.
Though for this particular case it seems that the motion for TRO wasn't well plead then, as they don't allege any concrete imminent harms such as losing your house or business. The motions all claim the possibility of disruptions to research operations as a result of the lost revenue, but stop short of pleading that it will happen. It's also especially dubious since these institutions are sitting on multi-billion-dollar endowments in the bank.
In this case I think an ex-parte TRO would be a stretch, because if that TRO needs to be turned into an injunction within 14 days, then $5,000 * 14 is only $70,000. Though since a PI still needs to show irreparable harm your point still stands. Well also I'm assuming this is state court so rule65 doesn't apply anyways.
I've never seen the order written like this, I've always seen an end date explicitly written. Since the hearing date is literally written in the paragraph above, it would be trivial to write it into the TRO order itself and save some legal ambiguity. What happens if the judge catches the rona and is out for a month? Does the illegal TRO stick until appeals smacks it down?
Also the federal government isn’t judgement proof unless they refuse to waive sovereign immunity
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I don't understand. Let's say I'm a biologist and applied for a $100k grant to study some kind of esoteric ligand discovery method and that was awarded. My university can then go to the NIH and say "yooo we need an extra $55k for indirect costs" and the NIH is like "bet, here's $155k"? But if it was awarded to a more prestigious university they might have said "yooo $70k extra actually" and the NIH would be like "say less, here's $170k"
A system like this seems like it would incentive administrative bloat. Is this really how it works?
It's included in the original grant amount. So you'd ask them for 155k, and the team at Prestigious University would ask for 170k for the same work, then the funder would theoretically take that into account when deciding where to spend their money. You also have to tell them how much is direct costs and how much is overheads, not just "we need 155k".
huh. I guess I would expect universities to compete to have the lowest indirect costs? is the market not that robust? can lots of grants only be practically fulfilled by one university? are the NIH funders just like "yolo not our money"
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I think operating institutions is much cheaper in Korea whereas doing research out of those institutions is only slightly cheaper.
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Physics professor Steve Hsu's take: https://x.com/hsu_steve/status/1889350047004848291
Steve Hsu is a weird guy.
I follow him on Twitter where he mostly posts about how great China is, despite living in the US and teaching at the University of Michigan. It's very black-pilling for the idea of assimilation.
He thinks every thing is a huge win for China because he loves China and wants them to defeat the US.
I do agree that he likes China, but I don’t think he wants it to defeat US. The way I read him is more like “if China defeats us, it will be deserved, because they’re doing a lot of right things, while we are just fumbling while being insanely overconfident about our abilities, and seriously underestimating China”.
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I think you misread Hsu's motives. He's almost always giving his honest read of a situation and saying where US policy is working against itself. For example, export restrictions on high-end microchips. He said this is just going to bootstrap Chinese chip manufacturing that otherwise would have had to compete with imports. Manufacturers in China have the same incentives as anyone else and until the ban consumed a whole lot of imported chips.
Now we have DeepSeek R1 that was partly trained on Huawei chips.
On a recent podcast he talked about learning of Trump's win while hiking a mountain in China. And he fist-pumped and celebrated as an American happy that his country was getting back on the right track. And then shortly after was soliciting for technical experts to fill roles in the adminstration.
Maybe I am reading him wrong.
For what it's worth, I largely agree with his China takes, just minus the triumphalism.
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He appears to be an unironic MAGA guy though. I suppose it's not contradictory if you believe a war between US and China isn't inevitable.
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Seems pretty uncharitable. Why do you think he wants China to defeat the US?
I doubt this is an assimilation story. Hsu's dad was born in pre-revolutionary China and Hsu's granddad was a KMT general, so he'd have little familial reason to hold red China in high regard. Hsu himself was born in Iowa and has worked exclusively in American institutions - if he really loved China so much he could certainly move there.
Yeah, it doesn't seem to make any sense. And yet that's the read I get from seeing hundreds of his tweets. I think people have stickier ethnic loyalties than we might want to admit.
That's why Scott's recent take about Rotherham landed kind of flat. His take was something like this:
"Americans are mad about white girls getting raped by Pakistani man in England. But these same Americans aren't mad about the even bigger problem of Pakistani children being raped by Pakistani men in Pakistan. I thought they cared about Pakistani rapists, but I guess not. So inconsistent."
To which the answer from everyone was sorta, "d'uh".
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Comes back to 'Bureaucracy Isn't Measured In Bureaucrats'. The overhead is a result of the regulations. The removal of overhead doesn't remove regulations.
What funding do woke movements need ? They're staffed by privileged upper class volunteers who're signed up in unemployable non-STEM programs. Wokeism works precisely because it needs no funding.
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When I was in college, several of the STEM professors brought up how many adjunct sociology professors their research grants were funding from the half-ish of the money that was "indirect". It was quite a few, because relatively little of tuition ends up paying for professors. I'm not saying this hypothetical couldn't happen, but that the reverse of it (STEM research is a cash cow for high-ranked multidisciplinary universities) has been true before.
Can you confirm this to be true ? It seems insane that funding money crosses department boundaries.
I don't know the financial details at play, but money is often very fungible. It could easily be "letting all the tuition funds pay for humanities" or something like that. Although I've also heard universities complain informally about earmarked gifts: rich benefactors want new named buildings, not expensive repairs to existing ones.
A common complaint with earmarked donations (& grants for that matter) in general: "buy the new shiny" is often far more attractive than "do the preventative maintenance to keep the previous workhorse running".
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Won’t we just switch to funding the lab directly instead of indirect taxation?
This provides insufficient opportunities for grift.
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