U.S. to Delay School Research Funds Cut

The Reagan Administration, seeking to defuse controversy over the proposed reduction of federal funds that pay for indirect overhead costs in university research, said Thursday that it would delay the budget-cutting rule.

Joseph Wright, deputy director of the Office of Management and Budget, said he would postpone implementation of the proposal from April until July to allow more discussions on the rule, which universities and other groups contend would unfairly strip them of millions of vital research dollars.

However, Wright underscored the Administration’s belief that administrative costs have escalated to unprecedented levels and, in many instances, are viewed by universities simply as a “pot of money” to pay for unrelated expenses, including commencement exercise costs.

‘Siphoning Off Funds’

“We are paying too much for overhead at the expense of additional research,” Wright said, adding that universities are “steadily siphoning off the funds available for direct research.”

Wright, appearing before the House Science and Technology subcommittee on research and technology, said that these disproportionate costs do not “match the priorities that this nation has placed in maintaining its worldwide scientific pre-eminence.”

The OMB official said that 31% of federal support for research was used to pay for university overhead costs in 1984, compared with 24% in 1974. This amounted to an increase of $400 million, he said.

“To put this issue into perspective, the National Institutes of Health spends as much on university overhead as it does on cancer research,” he said.

The Administration, seeking a $100-million reduction, has proposed to limit reimbursements for overhead by April 1 to 26% of the federal research funds a university receives. The limit would be lowered to 20% by April 1, 1987.

But the Administration’s proposal, which was published several weeks ago in the Federal Register, has drawn harsh criticism from academic and scientific groups.

Cooperation Seen in Peril

The cuts “would not only harm individual institutions but would violate the longstanding history of cooperation between the federal government and the universities,” said William H. Danforth, chancellor of Washington University in St. Louis.

“The proposed setting of caps is an arbitrary action that reduces indirect reimbursement in a discriminatory fashion and singles out universities unfairly,” said Raymond J. Clark, controller and associate treasurer at Princeton University.

Thomas E. Stelson, vice president for research at the Georgia Institute of Technology in Atlanta, said the present OMB proposal would seriously jeopardize his institution’s ability to continue as a major defense contractor. He said the caps proposed for the two years would deny the university $28.8 million for expenses related to government research programs.