This edition of AcademyHealth's Situation Report dives into the latest developments impacting research and health care funding. We explore the looming threat of a government shutdown, the positive news of an extended injunction blocking NIH funding cuts, and the proposed VA budget cuts. Additionally, learn about strategies to secure research funding through our exclusive AcademyHealth events.
In today’s issue:
- Government Shutdown Risks Increase
- Federal Judge Extends Block on NIH Funding Cuts
- VA Budget Cuts Put Research at Risk—Share New Infographic to Raise Awareness
- AcademyHealth Members-Only Events: Town Hall and Strategies for Securing Funding
Government Shutdown Risks Increase
Summary
As the deadline of March 14 approaches, there is significant uncertainty over how Congress will continue to fund government programs for fiscal year 2025. If Congress does not pass an extension of the current continuing resolution (CR), many government programs could be forced to shut down. The main issue is a power struggle between President Trump, Elon Musk's Department of Government Efficiency (DOGE), and Congress over control of federal spending. Despite legal requirements, DOGE has been unilaterally cutting federal programs and contracts without following the proper process, often claiming fraud without clear evidence. Democrats demand checks on DOGE's actions, but Republicans largely oppose these restrictions. Speaker Mike Johnson and President Trump support a long-term CR without limits on DOGE, a move Democrats argue could lead to reckless funding cuts. This stalemate increases the likelihood of a government shutdown at midnight on March 15.
Details
The crux of the clash is President Trump and Elon Musk’s Department of Government Efficiency (DOGE) process attempting to seize the power of the purse delegated in the Constitution to the Congress.
While Trump and Musk have claimed that the president has the authority to withhold money that Congress has decided should be spent, the Congressional Budget and Impoundment Control Act of 1974 placed very strict limits on the ability of the president to ignore federal appropriations through impoundment. An impoundment refers to the president or an executive agency withholding or delaying the spending of funds that Congress has already appropriated. This means that even though Congress has legally allocated money for a specific purpose, the executive branch decides not to use it, either temporarily or permanently. Under this law, the president must notify Congress if they intend to delay or cancel spending. Congress then has the authority to approve or reject the impoundment. If Congress does not approve within 45 days, the funds must be spent as originally intended.
Rather than follow these processes, Musk’s DOGE has been unilaterally freezing or terminating billions of dollars in federal contracts and programming that he and Trump disagree with under the guise of “fraud,” although it is unclear if any of the cuts have been fraudulent. The legal authority in which he has been doing this is legally suspect, as is the amount of cutting that he has undertaken. While Musk said that he has cut over $100 billion in federal spending, DOGE has repeatedly walked back the specific claims that it has made. From its start, the list of receipts DOGE publicized has been full of errors: for example, claims that confused billions with millions, triple-counting the same cancellation, or claimed credit for contracts that had ended years or even decades earlier. Current estimates are that DOGE has actually cut less than a tenth of what it claims.
Congressional Democrats are demanding some sort of guardrails to prevent DOGE from unilaterally zeroing out federally funded priorities. House Appropriations Chairman Tom Cole has called any limitations on DOGE a “non-starter” for Republicans, despite also publicly calling on DOGE to reconsider closing a National Weather Center in his district. For Democrats, the concern is that under the current CR, the Administration is stopping funding for numerous projects and agencies that are doing work that they do not politically agree with, and that by voting for another CR without changes they would be endorsing this “pick and choose” government funding process. In short, Democrats are looking at the impoundments currently being made by the Administration as outside of the legal process and saying that they do not believe that any budget bill signed into law will be faithfully executed.
House Speaker Mike Johnson and President Trump are calling for a CR for the remainder of the fiscal year without guardrails against DOGE. House Appropriations Ranking Member Rosa DeLauro (D-CT) has called this approach a “power grab” that would allow for more legally dubious impoundments. Senate Appropriations Ranking Member Patty Murray (D-WA) said that the CR would be a “a yearlong power grab that would help Elon take a chainsaw to programs that families rely on and agencies that keep our communities safe.” For his part, Musk has said that a shutdown “sounds great.” All of this sets the stage for a potential government shutdown at midnight March 15.
Government shutdowns harm research, but so does the uncertainty and backroom elimination of lawfully passed research funding as well as wide scale firing of the civil servants that make research, dissemination, and implementation possible. Despite court orders to resume research funding, the National Institutes of Health and other federal agencies have suspended research grant review panels, which have effectively continued the funding freeze. As we have written about in previous editions, the combination of disrupted grant processes, budgetary freezes, and capped indirect costs has resulted in financial instability at academic institutions, leading to tuition increases, hiring freezes and decreased graduate admissions. AcademyHealth is continuing to make the case to Congress about the importance of steady, predictable, and sufficient funding for health services research, including with our FY25 and FY26 AHRQ campaigns.
You can learn more about the status of federal appropriations at our member-only town hall on March 19 at 12:00 PM ET with President and CEO Aaron Carroll and Director of Advocacy Josh Caplan. Members can register here (you will be asked to login to your AcademyHealth profile before seeing registration options).
Federal Judge Extends Block on NIH Funding Cuts
A federal judge has issued a nationwide preliminary injunction blocking the Trump administration’s proposed 15 percent cap on NIH indirect cost reimbursements, signaling that the plaintiffs are likely to succeed in overturning the policy. The injunction halts the implementation of cuts that would have reduced funding for overhead expenses such as lab maintenance, utilities, and administrative support, which institutions argue are essential for sustaining biomedical research. The lawsuits, filed by 22 state attorneys general and major academic associations, claim that the policy was implemented unlawfully and would stifle scientific progress.
For health services researchers, this decision ensures continued funding stability for critical infrastructure that supports research, including data management, compliance, and interdisciplinary collaboration. Without these funds, universities had warned of hiring freezes, reduced graduate student admissions, and potential layoffs, all of which could have severely disrupted ongoing and future research projects. The judge’s ruling reinforces the necessity of indirect cost reimbursements in maintaining a robust research ecosystem.
While the injunction provides temporary relief, the legal battle is far from over, as the administration is expected to appeal. If the policy were ultimately upheld, it could force research institutions to absorb significant financial losses, potentially shifting costs onto researchers or limiting the scope of projects. The uncertainty surrounding the case also contributes to concerns about the U.S. research climate, with some scientists exploring opportunities abroad due to perceived hostility toward the scientific community.
VA Budget Cuts Put Research at Risk—Share New Infographic to Raise Awareness
The Trump administration's recent proposal to reduce the Department of Veterans Affairs (VA) budget by 22 percent has raised significant concerns among veterans, health care providers, and lawmakers.
The proposed VA budget cuts would drastically reduce access to health care services for veterans, potentially leading to 30 million fewer outpatient visits. This would limit critical services like wellness checks, cancer screenings, mental health support, and substance abuse treatment. Additionally, the cuts could result in the loss of 81,000 jobs within the Veterans Health Administration, leading to longer wait times, fewer medical staff, and reduced care quality. On the research side, over 370 ongoing clinical trials focused on conditions such as ALS, multiple sclerosis, and PTSD could be halted, delaying progress in treating these health issues. The loss of thousands of VA researchers would further hinder the advancement of medical science and the VA's capacity to innovate in veteran health care.
Lawmakers, including Senator Patty Murray (D-WA), have expressed strong opposition to the cuts. Senator Murray has written a letter decrying the dismissal of researchers and the disruption of ongoing studies. Congressional hearings and discussions are also underway to address the impact on VA research and prevent further cuts. Others have created share-able infographics to highlight the issue. We recommend sharing this infographic that outlines the potential consequences for veterans, the broader health care system, and future medical innovation.
AcademyHealth Members-Only Events: Town Hall and Strategies for Securing Funding
Join us for two exclusive opportunities designed to help overcome current challenges in the research community. On March 13, AcademyHealth members are invited to Securing Funding – Strategies for Researchers. This interactive webinar provides diverse perspectives on the funding process via a moderated discussion with a researcher, a private funder, and an experienced grant writer. Participants will also engage in breakout groups to tackle specific challenges and share strategies. Register here.
Then, on March 19 at 12:00 pm ET, join our members-only town hall with Aaron Carroll and Josh Caplan. This session will explore the latest policy and funding challenges. Learn how Medicaid cuts, federal funding freezes, and workforce reductions could impact your work, and gain advocacy strategies to navigate these shifts. This is your chance to engage with AcademyHealth leadership, ask questions, and connect with fellow members. Register for AcademyHealth Town Hall here.
Note, you must be logged in as a member to see available registration options for these events.
Previous Updates
This is the latest in a series of Situation Report updates from AcademyHealth. You can find prior issues here.
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