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**FEBRUARY 10, 2025**

On the Prospect website

Even Bankers Don't Want to Delete the CFPB [link removed]
Industry trade groups are alarmed that the Trump administration's illegal order to halt work at the consumer protection agency will cause chaos in consumer markets. BY DAVID DAYEN

Government by Malicious Autopilot [link removed]
The hostile takeover of federal IT systems is intended to use technology to reach preordained conclusions. BY DAVID DAYEN

Elon Musk's China Threat [link removed]
The shadow president has deep ties to the Chinese dictatorship, and it shows. The risk to national security is unimaginable. BY RYAN COOPER

[link removed] Vought Stops CFPB From Functioning With Illegal Order [link removed]
The budget director and acting head of the CFPB also tried to defund the agency, but found it was already funded through the fiscal year. BY DAVID DAYEN

Kuttner on TAP

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**** What Trump Could Learn From Hitler on NIH Funding

Even the F??hrer knew to support German science, and not just for war. Why is Trump trying to destroy America's great research universities?

On Friday, the National Institutes of Health announced [link removed] that it is capping the amount of overhead on all research grants to 15 percent. Overhead pays for everything from the cost of research labs to the expense of applying for grants to administrator salaries to the cost of filing patent applications.

The average overhead has been running at about 26 percent, and at some top research universities such as Harvard, Yale, and Johns Hopkins, it is over 60 percent [link removed]. The administration also plans to cut funding for the National Science Foundation by at least two-thirds.

NIH and NSF are a big part of why the U.S. is the world's leader in science and technology. In 2023, NIH distributed about $35 billion through about 50,000 grants to over 300,000 researchers. Nine billion of this was overhead. Shrinking overhead will reduce these universities' ability to conduct research.

Why is Trump doing this? Is this assault on NIH the war against the deep state on autopilot? Something very similar was in the Project 2025 blueprint. Is Trump trying to punish big research universities in blue states? Is it simple nihilism?

One source of Trump's wreckage of state support for science and technology is Elon Musk. When Musk and his small team of engineers working in a garage were inventing the first private space rocket, they found they could do it a lot more cheaply than NASA, which was hidebound by elaborate rules and specifications that added needless costs.

Just two years after Musk launched his first successful rocket into orbit in 2008, it was Barack Obama who ordered NASA to contract out rocket launches to Musk to save costs. For Musk, the takeaway was that science and technology doesn't need government.

But of course, it is government via NASA that ultimately pays for SpaceX. And biotech research is a whole other story from rocketry. It can't be done in a garage; it requires labs, teams of researchers, and careful clinical trials.

NIH and NSF grants aren't the deep state. The money doesn't stay in Washington; it goes out to finance research. And a lot of major research universities are in red or purple states.

Heather Cox Richardson reported [link removed] that eight Florida research universities will lose $165 million. Six in Ohio will lose $194 million; and four in Missouri will lose $212 million. And that doesn't count the cost of future lost grants that universities will lack the capacity to apply for.

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It's one thing to trash USAID. In the view Trump and Musk have tried to cement with the public, the benefits go to a bunch of foreigners, often in shithole countries, sometimes to promote DEI. (This of course is total BS. USAID mainly alleviates starvation and disease, and prevents China from dominating the Global South.)

But it's something else to destroy the world-class institutions that make America great, to coin a phrase. Even Hitler did not trash German science.

Hitler did seek to turn science to his own ends, to promote research on eugenics, new technologies for blitzkrieg war, sick medical experiments, and more efficient ways for the mass killing of Jews. Yet civilian German science, long a mark of German pride, also thrived. During the Nazi era, German scientists and engineers invented the first electron microscope, industrial-scale production of artificial fiber, pharmaceuticals such as advanced sulfa drugs, artificial rubber, and much more.

Trump, in short, is even more nihilist than Hitler.

WE AWAIT THE PUSHBACK. Surely university leaders as well as governors and private-sector research clients in red states are already in touch with their legislative representatives in Washington. Are Republican House and Senate members so thoroughly intimidated by Trump that they won't push back? We'll soon find out.

When OMB issued its first lunatic order pausing virtually all federal grants-in-aid, even before the illegal move was enjoined by two federal judges, OMB began walking the order back [link removed]. This was mainly because of massive pushback from red states. It would be surprising if something similar did not happen with the NIH order. Already, Republican Alabama Sen. Katie Britt is vowing to work [link removed] to restore NIH funding to the universities in her home state.

As for NSF, its funding will be part of the coming battle over budget reconciliation. Of all the things that Republican legislators will give up in the negotiations, it's hard to imagine them going to the mat with Democrats in order to cripple NSF.

As law professor Sam Bagenstos has reported, the NIH order is also probably illegal [link removed]. In 2017, during Trump's first administration when an assault on NIH was rumored, Congress attached a rider to the NIH appropriation requiring that NIH must not deviate from the formulas for indirect costs that were applied in the third quarter of FY2017.

As Bagenstos points out, the memo implementing the new policy also violates the Administrative Procedure Act, which requires a rulemaking and notice and comment for such a drastic change. Once again, there will be litigation and we will find out whether we can rely on the courts.

My informed hunch is that the 15 percent rule will be walked back first. Small-d democratic politics, battered but unbroken, to the rescue.

~ ROBERT KUTTNER

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