Inside (the Beltway) Scoop

By: Ellen Kuo
Thursday, January 22, 2026
House Appropriators Continue Work on Two Minibuses for Fiscal Year 2026

On Tuesday, January 20, the House Appropriations Committee released a fiscal year (FY) four-bill minibus, which includes the Labor-Health, Human Services and Related Agencies (LHHS) spending bill along with Transportation-HUD, Defense, and Homeland Security. The National Institutes of Health (NIH) is provided $47.2 billion, excluding the $1.5 billion provided to the Advanced Research Projects Agency for Health (ARPA-H). The NIH funding level represents a $415 million increase for biomedical research compared to FY 2025 and flat funding for ARPA-H. It is also a rejection of the administration’s proposed 40 percent cut for NIH. The House is in session this week and could cancel the last week of January, which is currently planned as an in-district work period, to buy more time to pass the LHHS-Transportation-Defense minibus bill on the floor. The Senate is in recess the week of January 19, but could take up the minibus when they return the last week of January. 

The LHHS bill addresses the issue of multi-year funding in section 240 by limiting the amount of funds that can be obligated for awards that fully fund out-year commitments and directs NIH to fund as many new awards as possible based on meritorious applications. Additionally, NIH is directed to provide an analysis of the types of research funded by this model in fiscal year 2025 and the selection criteria to identify grants to be funded by the multi-year approach. Throughout fiscal year 2026, NIH is directed to brief the Committees no less than monthly on the status of grant announcements, applications, awards, continuations, terminations, or cancellations. Such briefing shall include a report on grant awards by the Institute or Center that fund more than the current year of performance.

In the LHHS bill text section, 224 states that deviations from negotiated rates shall continue to apply for the NIH in the same manner as applied in the third quarter of FY 2017, and prevents the Department of Health and Human Services or any agency from developing or implementing a modified approach. In the explanatory statement, there is a recognition of the various models to improve indirect costs transparency and direction that neither NIH or any other department may develop a policy, guidance, or rule, including publication of a notice of proposed rulemaking, that would alter the manner in which negotiated indirect cost rates have been implemented and applied under NIH regulations, as those regulations were in effect during the third quarter of fiscal year 2017. 

Primate research centers are provided $30 million to remodel, renovate, or alter existing research facilities or construct new research facilities for non-human primate resource infrastructure, as authorized under 42 U.S.C. section 283 (k).

On Monday, January 5, the House and Senate Appropriations Committee released the bill text and explanatory statements for a 3-bill minibus spending package, H.R. 6938, which included the Commerce, Justice, Science (CJS), Energy and Water (E&W), and Interior spending bills. This package passed the House on January 8 by a vote of 397-28. The Senate passed it 82-15, and the president is expected to sign the bill. 

While the administration attempted to cut the National Science Foundation (NSF) by $5.16 billion or 57 percent from FY 2025 enacted, and the Department of Energy Office of Science by $1.1 billion or 13 percent, these cuts were rejected in the bicameral, bipartisan compromise for these FY 2026 funding bills.

For NSF, the agency is provided $8.750 billion, which is an overall total loss of $310,000 million or a 3.4 percent reduction from the FY 25 enacted level of $9.06 billion. Reviewing the breakdown for NSF, Research and Related Activities remain at the status quo from FY 2025. There is $251 million for Major Research Equipment, but Emergency funding under this heading saw a removal of $234 million. This leaves an overall increase of $17 million. STEM education lost $233,750 million, and Agency Operations lost $93 million. NSF’s Inspector General office lost $250,000, but the National Science Board remains the same as FY 25 enacted.

There is also language in the explanatory statement for the CJS bill that says any department or agency that submits a reprogramming request and doesn’t receive an identical response shall be responsible for reconciling the differences between the two bodies. If reconciliation is not possible, the items in disagreement shall be considered unapproved.

Congress provided $8.4 billion in total resources for the Office of Science, which supports scientific research at the Department of Energy’s national labs. This is $160 million or a 1.9 percent increase above the FY 2025 enacted level for this office and demonstrates Congress’ desire to support the office at the highest mark between the two chambers while avoiding the administration’s proposed cut of $1.1 billion or 13 percent to the Office of Science.

In the CJS and E&W bills, there is language requiring NSF, the Department of Energy, the Department of Commerce, and the National Aeronautics and Space Administration to continue to apply negotiated indirect cost rates to the same extent as negotiated indirect cost rates were applied in FY 2024. 

In another positive development for indirect cost rates,  the U.S. Court of Appeals for the First Circuit unanimously affirmed on January 5, 2026 that the administration, the Department of Health and Human Services, and NIH could not impose a uniform 15 percent rate on indirect cost reimbursement funding across all NIH grants for indirect costs in lieu of a separately negotiated rate for indirect costs in every grant. This type of funding supports cutting-edge medical and public health research at various research institutions as originally proposed under Supplemental Guidance to the 2024 NIH Grants Policy Statement, Notice Number NOT-OD-25-068.

In the Energy and Water bill explanatory statement, there is additional language regarding indirect cost rates that acknowledges there is room for improvement in the system used to identify and recover indirect cost rates under the Uniform Guidance, particularly with respect to the need for greater transparency into this cost. Various models have been suggested to achieve these improvements, including the Financial Accountability in Research or FAIR model advanced by the Joint Associations Group, which the committees believe merit further consideration. There is also language regarding the Office of Science mission and workforce development calling for a workforce that maintains mission focus and requires a briefing on its strategy to preserve and strengthen scientific and technological leadership and how to cultivate the existing STEM workforce, strengthen national laboratories and user facilities.