When President Donald Trump won the plurality of the popular votes cast in the November election, he took that as a mandate from the nation to pursue his promises of overhauling the federal government and cutting overhead, a process sure to upend traditional norms.
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When President Donald Trump won the plurality of the popular votes cast in the November election, he took that as a mandate from the nation to pursue his promises of overhauling the federal government and cutting overhead, a process sure to upend traditional norms. After just over a month in office, Trump has been making good on those promises.
For those hoping for such a disruption following the election, this may be a welcome outcome, but the sudden policy changes are hitting home in the Central Massachusetts economy. The most direct hit so far is the attempt to cap indirect costs for new and existing National Institute of Health grants to 15%.
As the largest recipient of NIH funding in the region, UMass Chan Medical School in Worcester immediately raised the alarm bells over the funding cuts. The school receives about $150-$200 million annually in NIH funding to conduct biomedical and life sciences research, and the school – using all its funding sources – has spun off multiple companies based on its research and won two Nobel Prizes from that work. It’s a vital part of the state’s innovation economy, and substantial cuts in funding not only threaten the country’s lead in research and innovation, but it could dent the local economy as well. A judge temporarily blocked the attempted cut to NIH funding, but the fight is far from over.
At WBJ’s Economic Forecast & Central Mass Real Estate Forum on Feb. 11, keynote Mark Melnik said the proposed NIH cuts would be catastrophic for the entire state economy, especially combined with much tighter restrictions on H1-B visas. Melnik, the UMass Donahue Institute director of economic & public policy research, said the Massachusetts economy has largely completed its recovery from the impact of COVID-19, but the unknown impacts of sweeping policy changes emanating from Washington, D.C. cast the biggest uncertainty about the future of that economy.
Change is coming, and it's coming hard. Some of it might be good for the region’s economy, but this first spate of new spending guidelines is a big negative for the state and the region. UMass Chan and our state’s business, research, and political leaders should continue to fight the NIH cuts, but even if they are successful in keeping existing grants intact, the future flow of NIH grants seems far from certain. We’re for efficiency and cutting excesses in government spending. However, this kind of steep reduction, without warning, appears far too draconian a measure.
The Massachusetts economy is built on innovative new products, research breakthroughs, and the development of new and exciting industries. Now is the time for a new type of innovation: adapting to the rapidly changing role of the federal government in our businesses and communities. It’s important to be more efficient, while also fighting for what is right, but it’s also important to figure out ways to thrive during disruptive times.
This editorial is the opinion of the WBJ Editorial Board.
