Podcast Summary – Statecraft with Santi Ruiz
Episode Overview
Episode Title: What’s Wrong with NIH Grants?
Date: January 9, 2026
Host: Santi Ruiz
Guest: Dr. Mike Lauer (Former Deputy Director for Extramural Research, NIH)
Theme:
This episode examines the structural, historical, and practical problems of NIH extramural grant funding. Dr. Mike Lauer offers a deep-dive critique on why the NIH system is “fundamentally broken,” exploring historic roots, systemic flaws, the consequences for American science, and possible alternatives.
Key Discussion Points & Insights
1. Role and Structure of NIH Extramural Research
- Definition: “Extramural” funding refers to the majority (85-90%) of NIH’s budget: grants awarded to researchers and institutions outside NIH.
- Scale: About 40,000 research project grants (RPG or “R grants”) were awarded in 2024, averaging ~$600,000 each, out of a total $48 billion NIH budget. RPGs constitute the majority of NIH’s grantmaking.
- Admin Complexity: System relies on tens of thousands of external reviewers and thousands of internal program staff. As Dr. Lauer puts it:
"There's no one person who's making the decisions about all those grants. We had a very elaborate system." (01:19)
2. Historical Evolution of the Grant System
- Origins: NIH’s grant approach is deeply influenced by the Rockefeller Foundation’s pre-WWII model—small, project-based grants, rather than large institutional support.
- Accidental Beginning: NIH grants began after WWII almost by accident, then became formalized by Congressional approval after initial success:
"...they found themselves with some extra money... sent out a letter to university deans... That was the beginning of the NIH grant program. It did not start with an act of Congress. It started because of a series of accidents." (12:03–13:29)
- Bureaucratization: In the 1960s, Congressional demands for more oversight led to an explosion of paperwork and regulation.
3. Systemic Flaws: The Hypercompetitive “Soft Money” Trap
- Hypercompetition: The funding rate for grants dropped from 60% in the 1950s to 10% in 2025.
- Soft Money System: Scientists are often forced by universities onto “soft money” positions where salary and even employment depend on winning grants:
“Your university... basically says to you it is up to you to get your salary... by applying for grant money from the federal government. And... every time you ask for funding is on the order of 10 to 20%.” (05:45) "The system, which was originally designed to be competitive, has become hyper competitive. There is too much competition going on, so much so that it is actually dangerous and corrosive to the system." (03:07)
- Impact: High stress, less time for creativity, focus shifts from science to grant acquisition, administrative burden increases.
- Survey Evidence: Scientists spend approx. 45% of their time on administrative bureaucracy (19:40).
- Talent Pool Consequences: Fewer US trainees opt for biomedical science; system increasingly filled by international students and postdocs.
4. Paperwork & Bureaucracy – Where Time Goes
- Burdensome Applications: Typical grant applications run 100–150 pages (some over 1,000); only about 12 pages are the actual science.
- Remainder: Administrative details: facilities, compliance, biographical info, animal/human subject protections, etc.
- Cause: Layering of federal statutes and Congressional expectations since the 1960s.
- Little Leeway to Simplify:
"For the most part, the degree of leverage is relatively small because it's congressionally directed." (22:08)
5. Policy Incentives and Perverse Effects
- Overproduction of Scientists: University incentives coupled with grant rules drive perpetual hiring of faculty, graduate students, and postdocs—even if academic jobs are scarce.
- Indirect/Overhead Costs: Universities benefit financially the more grant-funded faculty and trainees they have.
"Universities are incentivized to hire people that they do not have the resources to support." (29:05)
- Project-Based Funding Limitations: Science is unpredictable; project-specific grants force “astrologizing” about multi-year outcomes rather than adaptive, discovery-driven science (26:21).
6. Block Grants & Alternate Models (“X Labs”)
- Block Grant Proposal: Instead of many small project grants, provide large, flexible block grants to institutions—letting them allocate funds internally and supporting longer-term, riskier, and larger-scale projects.
- Accountability: Retrospective review, financial audits, and holding institutions accountable for producing “hits” in science portfolios, not individual deliverables.
- Benefits: Frees scientists from bureaucracy, supports breakthrough science, enables institutional strategic planning:
"What you want is both—accountability and transparency... and the expertise of scientists." (37:15) "A block grant system... enables actually a wide diversity of work to be funded." (47:50)
- Drawback to Piecemeal Change: If not scaled adequately, block grants won’t relieve grant-writing burdens.
7. The Institutes and Centers (ICs) – Internal NIH Fragmentation
- 27 Institutes and Centers: Each with its own culture, rules, and priorities.
- Variation: Funding rates and policies can vary widely across ICs, leading to inequalities and complexity:
"It's a remarkably fragmented agency with each unit doing their own thing." (51:21)
- Lobbying and Advocacy: Disease-focused institutes (e.g., NCI) benefit from advocacy, historically growing larger via political action.
- Leadership Advice: Transitioning from academia to government requires learning a new culture—avoiding direct lobbying, staying out of individual grant disputes, and focusing on public mission (59:29–61:33).
8. Intramural vs. Extramural Research
- Intramural: In-house NIH science, long-term, stable funding, and greater risk-taking potential. Staff undergo retrospective review.
- Extramural: External funding to universities/researchers, more vulnerable to short-termism and administrative drag.
- Anecdote: COVID and RSV vaccine work at NIH could not have been done via standard extramural grants due to the risk-taking and time horizon required (65:40).
9. Aging of the Science Workforce
- Higher Age at First Award: Scientists now receive their first major grant typically in their mid-40s.
- Causes: Hypercompetition, glut of senior scientists (post-mandatory retirement), lack of turnover, crowded field.
- Implication: Barriers to young investigators, risk-aversion, and calcification of research leadership.
10. Open Questions & Unresolved Policy Choices
- What should public science funding achieve? Fundamental questions on balance of basic/applied science, structure of oversight, and who decides remain unsettled.
- Longstanding Tension: Politician-controlled vs. technocrat/scientist-controlled funding structures.
Notable Quotes & Key Timestamps
On systemic problems:
“The system of funding science is fundamentally broken. In some respects, it's been an unmitigated disaster. It was a house of cards, and it's not surprising that it's now falling apart.” —Mike Lauer (03:07)
On the soft money system:
“Your assumption would be that as long as you did high quality work, your employer would continue to pay you. That is not what it's like in science... your university... basically says to you it is up to you to get your salary.” —Mike Lauer (05:45)
On excessive administration and paperwork:
“Scientists are spending about 45% of their time related to federally funded research on administrative issues... not doing actual science.” —Mike Lauer (19:40)
On the roots of the current model:
“[The block grant model] did not start with an act of Congress. It started because of a series of accidents.” —Mike Lauer (13:29)
On perverse institutional incentives:
“Universities are incentivized to hire people that they do not have the resources to support... [and to have] more graduate students and more postdocs, irrespective of whether or not they have any hope of getting an academic job.” —Mike Lauer (29:05)
On block grant solutions:
“I think the key to having something like this be successful is that it's got to be big enough. It cannot be too small so that it is essentially set up for failure... the whole idea is that their sole incentive should be to do great science.” —Mike Lauer (43:45)
On the difference between science and project management:
“Science is fundamentally different than say, remodeling a kitchen. ... By definition, it's incompletely specified.” —Mike Lauer (26:21)
On Institute/Center fragmentation:
“I used to say that I work for the National Institutes of Health. The key word is the second word institutes, and the key letter is the S that comes at the end... It's a remarkably fragmented agency.” —Mike Lauer (51:01–51:21)
Suggested Listening Guide (Timestamps)
- [03:07] – Systemic problems and history of grant system
- [05:45] – The burden of "soft money" and the rat race for funding
- [10:42] – Scale and breakdown of NIH grant funding
- [12:03] – Post-WWII origins and Rockefeller model inheritance
- [16:52] – How paperwork and regulation ballooned
- [19:40] – Breakdown of the administrative burden on researchers
- [26:21] – Problems with project-based funding and perverse incentives
- [29:05] – How institutional and grant rules feed overproduction of scientists
- [43:45] – Block grant/X Lab concepts and design
- [51:01] – NIH’s internal fragmentation and its implications
- [65:40] – Intramural vs. extramural research and lessons from COVID vaccine development
- [69:10] – Aging of grant recipients and barriers to younger scientists
Tone and Style
The episode combines historical insight, blunt critique, and practical, wonky detail. Dr. Lauer is forthright and passionate, often using metaphors (“investment portfolios,” “house of cards”) and candid language (“absolutely nuts,” “set up for failure”). Santi Ruiz encourages clarity, defines jargon for general listeners, and steers the conversation back to practical implications for science and policy.
For a visual breakdown and further reading, see the annotated transcript and charts at www.statecraft.pub.