HOUSE OVERSIGHT 029430 recover this in the future through endowment payout would require on the order of an additional $26 in endowment. These indirect cost funds partially reimburse MIT for upkeep of research buildings and equipment, and literally keeping the lights and heating and cooling systems on. A portion of the money also pays administrative costs required to implement federal regulations and to provide staff who help apply for and monitor federal grants. A cap on indirect costs would directly affect research and researchers. If MIT failed to receive the federal funds needed to operate research infrastructure, we would need to limit the number of federal grants that the Institute accepts. It would be necessary to introduce a process analogous to under-recovery of foundation proposals to identify the indirect costs to support each federal grant. While we would seek other ways to raise revenues, we would also need to cut other expenditures (e.g., through layoffs, salary freezes, etc.), reduce the use of research facilities to cut operating costs, and/or to allow facilities to deteriorate. All of our peer institutions are considering similar steps. In short, a cut to indirect costs is a cut to research funding. And it's a cut that's more difficult to handle than a decision by a federal agency not to fund a particular project in a given year. The percentage of federal research funding that goes to indirect costs has remained relatively steady for decades, and there has been a federal cap on administrative costs since the 1990s. The Administration may hope that a proposed cap on indirect costs is seen as mitigating the impact of their proposed 22% reduction of the NIH budget. Although it may obscure this impact, in reality it will worsen it. The Administration is claiming that a cut to indirect costs will not cut research, but in truth without indirect cost recovery, academic institutions, including MIT, will not be able to afford to support curre