> The NIH is simply requiring that at least 85% of the grant value goes to the actual grant recipients, rather than being siphoned off by the university for administration expenses.
That's not how any of this work. All of that money was already going to necessary expenditures, and "administrative expenses" is a crucial part of that.
What happened in these places to arrive at numbers like 69%, was a very thorough audit. The purpose of the audit is to allow the government to determine they are supposed to fund, and it's being bundled into an overhead number because its allows universities to take advantage of economies of scale, freeing researchers to do actual grant research.
But because our current leaders can't understand that, what's going to happen is all of the overhead costs (which again, are efficient) are going to be replaced with direct billing, which is highly inefficient. All of the money we save through sharing resources will now be siloed and duplicated needlessly. Instead of doing grant research, grant recipients will spend more time just doing compliance work instead of actual research.
Look at it this way:
A Harvard researcher asks the government for $100. They allocate an additional $69 on top of that for the university to spend on rent, utilities, legal, publishing, lab facilities, lab personnel, library services, tech support, etc. So the total grant is $169.
If the indirect rate is 0.15, the researcher isn't going to ask for $100 anymore, they're going to ask for at least $154, putting to total grant back to $169. But they're going to ask for more than this because they've lost the economy of scale of the old system. So now they have to pay for direct costs they never had to before - a 20% bump is not unreasonable.
So what just happened? The researcher only needed $100 to do their research. But now because government introduced inefficiencies into the system, the total grant goes up, and the real overhead rate is 100% instead of 69%.
By trying to save money you've actually cost everyone to have to spend more money, meaning total research is going to go down because total research spend isn't going to go up. Such efficient.