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From: Joichi Ito
Sent: 7/7/2017 12:05:21 PM
To: Jeffrey Epstein [jeevacation@gmail.com]
Subject: Fwd: A message on the Trump Administration Proposal on Indirect Costs
Attachments: dkkolnphoaemodnh.png

Importance: High

FYI

Begin forwarded message:

From: "Maria T. Zuber" <
Subject: A message on the Trump Administration Proposal on Indirect Costs
Date: July 6, 2017 at 12:27:05 PM EDT
To: all-research@mit.edu
Cc: Suzanne Pettit < >, Paul Schierenbeck < >
Reply-To:

MIT Massachusetts Institute of Technology

Martin A. Schmidt, Provost
Maria T. Zuber, Vice President for Research

Dear colleagues,

We are writing to alert you to an issue that threatens all of MIT's federally funded research activities but that is often underappreciated.
We're referring to the Trump Administration's proposal to put a 10 percent cap on indirect cost reimbursements to universities by the
National Institutes of Health – an idea that is already beginning to be talked about for other federal agencies as well.

An article explaining indirect costs and why they are important to MIT can be found in the most recent Faculty
Newsletter: http://web.mit.edu/fnl/volume/295/zuber.html.

The Administration's proposed cuts to federal R&D agency budgets have rightly been met with consternation on campus. The indirect
cost cap proposal is actually an even graver danger because it is easier for the government to institute, and it would do far-reaching
damage that is harder to reverse. We need faculty and research staff to understand the devastating effects that capping indirect cost
would cause to MIT and other research institutions.

The indirect cost cap is easier to implement than a cut to the budget because the Administration can act unilaterally without
Congressional approval. The proposed agency budget cuts are already running into strong headwinds on both sides of the aisle in
Congress, and they cannot move forward without 60 votes in the U.S. Senate. The indirect cost cap, by contrast, does not attract the
same level of attention because it is not well understood, and the Administration can simply impose a cap – at a single agency, or at all
of them (since indirect cost reimbursement is fairly uniform across the government now).

What would a 10 percent cap mean for MIT? A 10 percent cap on all federal agencies would cost MIT around $100 million a year. To
put that in context, the financial crisis of 2008, where we saw a significant decline in endowment, required us to reduce spending by this
same order of magnitude. Fortunately, the recovery of the endowment was relatively quick, and we were able to recoup some of that
loss. In this case, the 10 percent cap is unlikely to be altered in the foreseeable future. Since this is a recurring cost, attempting to

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