Kate Price
Kate Price, RN, MPH, is the Director of the Healthcare Practice at McAllister & Quinn, a federal grants and strategic consulting firm. She provides critical research support, identifies funding opportunities, and produces legislative analyses to advance client strategies.
Alec Simantov
In his current role as a Director, Alec leverages his expertise on the Federal budget and Congressional appropriations to provide strategic oversight on policy and legislative developments. Alec also co-leads internal content and knowledge management to shape the growth and development of the practice, including the advancement of the practice’s strategic intelligence function.
Citing Research and Innovation Priorities, Congress Pushes Back on Trump Administration’s NIH Budget Proposal
On February 3, 2026, the President signed the final “minibus” appropriations package to fund the federal government for the remainder of fiscal year 2026 (FY26). The package includes funding for the Departments of Labor, Health and Human Services (HHS), and Education. The law establishes final FY26 funding levels for the National Institutes of Health (NIH).
Citing research and innovation priorities, Congress pushed back on the Trump administration’s NIH budget proposal, setting NIH funding at $47.22 billion for FY26, representing a $216 million increase over FY25. This administration’s request would have cut NIH topline funding by nearly 40 percent—an approach widely criticized by researchers, medical associations, higher education groups, and many members of Congress as harmful to U.S. biomedical research and innovation.
The bill also holds funding for the Advanced Research Projects Agency for Health (ARPA‑H) steady at $1.5 billion, maintaining its FY25 funding level.
NIH Institutes Gain Budget Increases as Congress Rejects Cuts
Across NIH’s Institutes and Centers (ICs), Congress broadly rejected proposed funding reductions from the administration reinforcing bipartisan support for biomedical research. Lawmakers also rejected the administration’s proposed reorganization of NIH, which would have consolidated, relocated, or eliminated multiple ICs. The law funds all 27 NIH ICs as currently structured in statute, sending a strong signal in favor of institutional stability and continuity.
Several ICs received funding increases including:
Indirect Cost Rates (ICRs) and Forward Funding Policy
The law also addresses ongoing concerns related to indirect cost rates (ICRs). In 2025, the Trump administration attempted to cap indirect costs across several agencies, including NIH, at 15 percent. NIH currently negotiates indirect cost rates on an institutional basis and can only alter an institution’s rate through negotiation, a directive that Congress has included in each NIH funding bill since FY18. Legal challenges quickly followed, and litigation remains ongoing; most recently, a federal appeals court upheld an injunction blocking implementation of the cap. Congress reinforced their opposition to the 15 percent cap in the bill by including explicit guardrails, stating that no federal agency—including NIH—may develop or implement any policy, guidance, or rule that would alter how negotiated indirect cost rates are currently applied.
Recognizing that maintaining the high ICRs of some institutions is not sustainable long-term, the House and Senate appropriations committees also directed NIH to continue discussions on potential improvements to the current system, including exploration of the proposed FAIR Model , an alternative approach to indirect cost funding developed by the Joint Associations Group (JAG).
Congress also included specific language to restrict the amount of forward-funded awards that can be made, and directs NIH to fund as many new awards as possible, additionally requesting that NIH to provide a report to Congress on what research was funded via this model in FY25, and the selection criteria for multi-year grants in FY26.
What Happens Now?
Now that the bill is law, the agencies affected by the brief shutdown (including NIH) are reopen and can begin ramping up activities including the releasing of new NOFOs and the resumption of review panels. NIH must now work to obligate all remaining FY26 funding before it expires on October 1, 2026. Applicants should be prepared for potentially compressed timelines for the remainder of the fiscal year.