In the first few months of the second Trump administration, the federal government has rapidly dismantled its longstanding support for scientific research and technology development. Since World War II, the United States has directed significant public resources toward research and development, particularly for academic institutions. These investments have shaped both U.S. and global innovation ecosystems.
U.S. taxpayers have received a large return on this public funding, with estimates suggesting that each dollar of investment in innovation yields $5 to $20 in societal benefits. These benefits not only include faster economic growth, more high-skilled jobs, and improved health outcomes, but also the birth of entire industries—from semiconductors and modern computing to biotechnology and clean energy. Federally funded research has led to transformative inventions like the internet, GPS, smartphone components, MRI machines, lifesaving drugs, CRISPR gene-editing therapies, and climate-resilient agriculture. This research has fueled a continuous pipeline of innovation that improves lives, strengthens U.S. competitiveness, and underpins the nation’s long-term security and prosperity.
Indeed, economic analyses suggest that the United States actually “massively underinvest[s] in science and innovation” when measured against the scale of societal and taxpayer benefits these investments yield.
Since January, this underinvestment has escalated into a crisis, marked by abrupt cancellations, stalled grant processes, and sweeping attempts to dismantle funding mechanisms for science and technology research across the country. The National Institutes of Health (NIH), the world’s largest biomedical research funder with nearly $40 billion in annual grant funding, has terminated or delayed over 2,000 grant awards. The National Science Foundation (NSF), a substantial sponsor of fundamental research in the nonmedical sciences with a nearly $10 billion budget, has awarded grant funding at half its usual rate. These headline numbers stem from a series of targeted policy moves by the administration, each now the subject of fast-moving litigation.
At least part of the Trump administration’s attack on research funding seems motivated by ideological disagreement with particular research agendas—as most clearly evidenced by the cancellation of grants on specific topics. But the administration has also used tools that seem intended to cripple the academic sector more broadly, such as cuts to reimbursement of “indirect” infrastructure costs (e.g. lab space, support personnel, computing infrastructure) or threats to withhold grant funding as leverage to try to force universities to adopt the administration’s understanding of viewpoint diversity. While courts have so far blocked many of these efforts, the stunning variety and volume of the attacks on U.S. research funding suggests that this onslaught will be an ongoing war rather than just a few battles. If the administration succeeds in achieving even a fraction of the cuts it intends, the costs for scientific progress—and the American public—could be profound.
Blacklisting Research Topics
One of the first flashpoints was the Trump administration’s cancellation of already-awarded research grants mentioning disfavored topics such as “DEI.” On January 20 and 21, a suite of executive orders directed agencies to terminate funding for all “equity-related” grants within 60 days, to “ensure grant funds do not promote gender ideology,” and to end “all ‘diversity,’ ‘equity,’ [etc.] programs, or activities.” Federal grantmaking agencies responded with form letters voiding grants as no longer serving “agency priorities.” According to the Grant Watch project, the NIH has cancelled well over $3 billion in grants, and the NSF has cancelled over $1 billion. Cuts at the NIH particularly targeted grants that mentioned race or gender, health equity, vaccine hesitancy, or misinformation. The NSF also has eliminated over 100 climate-related projects.
Numerous lawsuits quickly followed, resulting in some recent merits-related rulings. In a set of consolidated actions brought by 16 states and the American Public Health Association et al. against the NIH in April, Reagan-appointee Judge William Young (D. Mass.) ruled from the bench in June that the NIH’s explanations were “void and illegal” due to being “bereft of reasoning, virtually in their entirety,” and said, “I’ve never seen government racial discrimination like this.” He issued written findings of fact and rulings of law on July 2, finding that NIH’s disruption of grants was “breathtakingly arbitrary and capricious” under the Administrative Procedure Act (APA). The government has appealed to the First Circuit.
Meanwhile, in a class action filed by University of California researchers in early June, Judge Rita Lin (N.D. Cal.) granted a preliminary injunction on June 23 to two overlapping classes of UC researchers. First, she concluded that those whose grants were terminated for researching “blacklisted topics” were likely to succeed both in showing that the terminations were contrary to the agency’s enabling statutes and that they were illegal viewpoint discrimination under the First Amendment. She rejected the government’s argument that this was a form of government speech, and thus unconstrained by the First Amendment:
“Instead of seeking to define the limits of a government program advancing a government message when awarding new funding or creating new programs, the implementation of the Equity Termination Orders appears to be a concerted effort to penalize existing grants across the board for promoting forbidden views.”
Second, Judge Lin concluded that researchers whose grants were cancelled by form letter were likely to succeed in showing that termination without any “reasoned explanation” was arbitrary and capricious under the APA. A vague reference to “agency priorities” was insufficient. On July 2, Judge Lin ordered expedited discovery on whether class certification should be extended to 13 additional agencies beyond the NSF, Environmental Protection Agency (EPA), and National Endowment for the Humanities (NEH)—including the NIH, Centers for Disease Control and Prevention (CDC), and Department of Defense.
Cutting Indirect Costs
A second front in the administration’s efforts concerns indirect cost reimbursement, which are funds used to cover non-project-specific expenses like lab space, data and computing resources, and utility costs. As detailed by economists Pierre Azoulay, Daniel Gross, and Bhaven Sampat, since the establishment of the modern system of federal science and technology funding in WWII, grant recipients have received additional funding to cover indirect costs. Historically, NIH and other agencies have reimbursed institutions at negotiated rates, currently averaging above 50%. In February, the NIH stated that it would impose a flat indirect cost reimbursement rate of 15% on all grants.
The projected economic effects are enormous; one study estimates the cuts “would lead to about $16 billion in economic loss and around 68,000 lost jobs annually.” The cuts would also disproportionately impact the institutions most tied to patenting and drug development, potentially undermining the next generation of lifesaving therapies.
After suits were filed by three collections of plaintiffs—22 states, the Association of American Universities et al., and the Association of American Medical Colleges et al.—the new policy was enjoined on March 5 by Judge Angel Kelley (D. Mass.) for violating the APA and governing regulations. Judge Kelley stated that the NIH’s rate change notice was “conclusory,” “fail[ed] to demonstrate a rational connection between the facts and choice that was made,” and did not “recognize or consider the substantial reliance interests at issue.”
Similar 15% rate-cap policies by other grantmaking agencies drew similar legal challenges, and injunctions or temporary restraining orders (TROs) were issued against the DOE (May 15), DOD (June 17), and NSF (June 20) by three other District of Massachusetts judges.
The NIH indirect cost cases are now on appeal to the First Circuit. I filed an amicus brief with Azoulay, Gross, and Sampat, drawing on their empirical work to document the NIH’s failure to engage in reasoned decision making. For example, the NIH conflated negotiated rates (which exclude certain direct costs and are thus mechanically higher) with effective rates (the ratio of indirect costs to total direct costs, which have held steady for decades at around 35-45%). The case is set for expedited briefing and argument, and briefing was completed on July 2.
Other Attacks on Federal Research Funding
Terminating grants on politically disfavored research topics and attempting to cap indirect cost reimbursement are only two of many ways that the second Trump administration has undermined federal financial support for scientific research. To spotlight a few others:
First, the administration has threatened wholesale research-grant cancellation for institutions that do not comply with demands unrelated to those grants. For example, in February, a collection of states and physicians sued the administration for threatening to revoke research grants to institutions providing gender-affirming medical services, resulting in Judge Lauren King (W.D. Wash.) issuing a preliminary injunction—which the NIH reportedly ignored. More prominently, the administration has threatened the research funding of numerous universities—including Harvard, Columbia, Brown, Cornell, Northwestern, Penn, and Princeton—unless they address a litany of complaints related to protests against Israel’s war in Gaza, DEI initiatives, and viewpoint diversity. Related litigation includes lawsuits filed by Harvard and by the American Association of University Professors in the District of Massachusetts, in which motions for summary judgment were filed on June 2.
Second, cuts to achieve non-research-related political goals have had destabilizing and far-reaching effects on research. For example, dismantling USAID has not only stopped direct aid programs—which is likely to cause millions of deaths—but also has impacted agricultural research at land-grant universities, such as soybean research at the University of Illinois. Johns Hopkins University also lost over $800 million in USAID grants, largely for research programs related to global health. Numerous lawsuits have been filed to challenge the foreign aid freeze and shuttering of USAID. Similarly, the March 24 termination of over $11 billion in public health funding by the Department of Health and Human Services (HHS) threatened research related to mental health, addiction, and emerging health risks, resulting in a preliminary injunction from Judge Mary McElroy (D.R.I.). Other research-relevant cuts have been made at the DOE (e.g. $3.7 billion in clean energy demonstration projects), USDA ($3.1 billion in climate-smart farming grants), and NASA (closure of the Goddard Institute for Space Studies).
Third, the administration has taken numerous actions to delay or freeze grants, coupled with staffing cuts and agency disruptions. Grantmaking agencies have been repeatedly directed to freeze or delay funding. Staff layoffs and DOGE interference have impeded agencies’ ability to process grants. The NSF even lost its headquarters last month, without notice of where—or when—it will relocate. As a result of cumulative changes, the NSF is funding grants “at the slowest pace in at least 35 years,” and NIH had a 28% contraction in new grant funding.
Finally, and perhaps most significantly, the Trump administration’s proposed 2026 budget has staggering cuts for science and research agencies, including the NSF (57%), NIH (40%), CDC (53%), and NASA’s science budget (47%). The National Oceanic and Atmospheric Administration budget would be reduced by 30%, with $0 funding for climate research. Congress’s July 3 passage of Trump’s massive spending and tax-cut bill suggests that they may continue to fulfill Trump’s policy priorities.
This non-exhaustive (but exhausting) list catalogs some of the actions targeting direct federal funding for science and technology research. There are also many actions with substantial impacts on science beyond direct financing, including restricting immigration and suspending new student visa interviews, firing government scientists and scientific advisory committees, and removing science data from government websites. Journalists and commentators are struggling to keep up with the ever-evolving updates, and news sources such as Science and STAT have devoted entire sections to covering the Trump administration’s impact on science.
Long-Term Impacts
With this barrage of news and litigation updates, it is easy to lose sight of the big picture. Plaintiffs have succeeded in halting many specific Trump administration actions, such as for being insufficiently reasoned, viewpoint discriminatory, and undermining reliance interests. Many of these injunctions could well withstand the Supreme Court’s new limits on universal injunctions from Trump v. CASA given its preservation of APA remedies and other potential pathways.
But some cases may lose on appeal. And some may need to be refiled in the Court of Federal Claims after the Supreme Court’s April shadow-docket decision in Department of Education v. California. In that case, the Court stayed a TRO that had blocked the administration’s termination of education grants, reasoning that the district court lacked jurisdiction under the Tucker Act to order the government to pay money under the APA. The litigation over grant terminations could generally mirror the trajectory of the first Trump term’s travel-ban cases, in which the initial version was struck down by the courts, but a legally re-packaged version survived to achieve most of Trump’s policy objectives. Agencies can similarly re-issue grant terminations or indirect cost caps with lengthier rationales that are more likely to survive judicial scrutiny. For example, HHS has already issued guidance on ways to cancel grants that seem less likely to be overturned.
More importantly, these legal fights are focused on existing grants and short-term funding. There is nothing illegal about Congress—which seems largely beholden to Trump’s agenda—simply appropriating less funding for research in the future.
The academic and scientific communities are responding on two fronts: challenging unlawful agency actions in court and lobbying to preserve long-term federal investment. This ongoing engagement with the federal government on both fronts is critical to university missions. For most science and engineering researchers, the academic freedom to explore different ideas and engage in critical inquiry depends not only on the ability to openly publish results, but also on substantial financial support. And for now, the federal government remains the single largest funder of basic research.
To be sure, there is ongoing, reasoned debate about ways that science funding could be reformed. For example, in 2023, a group of scholars (including myself) convened by the USC-Brookings Schaeffer Initiative for Health Policy and partner organizations published an edited collection on “Building a Better NIH,” cataloging challenges with NIH support for biomedical research. And in their work on indirect cost reimbursement, Azoulay et al. evaluate numerous avenues for reforming the status quo. But it is hard to view the Trump administration’s sustained attacks on federal grant funding, denigration of scientific expertise, and proposed slashing of future science budgets as grounded in any reasonable view of the evidence.
Under a crabbed vision of “efficiency” that looks only at direct government expenditures and neglects long-term societal gains, science funding might seem costly. But, as discussed above, the evidence shows otherwise: U.S. taxpayers receive an enormous return on public investments in innovation. Preserving that support is not only efficient—it is essential to America’s scientific and economic leadership around the world.
