August 2025 Federal and Legislative Updates

Congress approves President’s recissions package

At the start of June, President Trump sent a recissions package to Congress including $9.4 billion of cuts towards public broadcasting and global aid. On June 12, the House passed the package sending it over to the Senate. In the Senate, a $400 million cut to PEPFAR, a global AIDS program, was removed from the package, bringing the total down to $9 billion. The package was passed in the early hours on Thursday, July 17 morning with a narrow vote. Since it was amended, the measure went back to the House, where they gave final approval of the package with a vote of 216-213.

Preliminary injunction issued in DOD indirect cost case

On July 18, Judge Brian E. Murphy of the U.S. District Court for the District of Massachusetts issued a preliminary injunction in a case brought by the Association of American Universities (AAU), the Association of Public and Land-grant Universities (APLU), and others challenging the Department of Defense’s (DOD) new policy capping indirect cost (F&A) rates at 15%. The injunction blocks DOD from enforcing the rate cap for awards issued on or after June 12, 2025, including the rejection of proposals from universities that use their federally negotiated rates instead of the 15% cap.

This decision, while not nationwide, applies to the universities that are plaintiffs in the case as well as members of AAU, APLU, and ACE, including when they are sub-grantees or collaborators. The injunction will remain in effect until the court issues a final ruling or a higher court intervenes. A hearing on summary judgment is scheduled for September 4, and the federal government is expected to appeal if the ruling favors the plaintiffs. APLU continues to track developments on its webpage covering legal challenges to similar indirect cost caps across multiple federal agencies. 

White House releases national AI action plan

The White House released its AI Action Plan on July 23, outlining the administration’s roadmap to position the U.S. as a global leader in artificial intelligence (AI). The plan is organized around three core pillars: accelerating AI innovation, building AI infrastructure, and leading in AI diplomacy and security. It was developed in response to more than 10,000 public comments submitted earlier this year.

Key recommendations include increased investment in foundational AI research — spanning theoretical, computational, and experimental approaches — as well as expanded support for AI-driven science and advanced manufacturing. The plan also highlights the importance of scaling resources through the National AI Research Resource, enhancing researcher access to data and high-performance computing, and improving education and training in AI-related fields. Additional actions involve updating the federal AI risk framework, refining export controls, and reducing regulatory barriers tied to data and energy infrastructure.

The action plan signals a broader federal commitment to shaping the future of AI policy, with related executive orders and a new national AI R&D strategy expected in the coming weeks.

Senator Tillis joins colleagues in letter to OMB to release held NIH funds

On July 24, a Republican group of senators, including Senator Thom Tillis (R-NC),  sent a letter to the White House Office of Management and Budget (OMB) urging the administration to release congressionally appropriated funds for the National Institutes of Health (NIH). The funding, authorized under the FY25 Full-Year Continuing Appropriations and Extensions Act, remains partially delayed, raising concerns across the research community.

The letter emphasizes the critical importance of timely NIH support for ongoing biomedical research efforts across the country. Delays could disrupt studies related to cancer, cardiovascular disease, and rare pediatric conditions, as well as affect thousands of research-related jobs and innovation pipelines. The Senators also underscored the need for transparency, scientific merit, and alignment with national priorities in NIH award decisions to ensure public trust and continued U.S. leadership in medical research. However the efforts to pause this funding by the administration have been scrapped.

Senate confirms Susan Monarez as CDC director

On July 29, the Senate confirmed Susan Monarez as the new director of the Centers for Disease Control and Prevention (CDC). Under a 2023 law requiring Senate confirmation for this role, she becomes the first CDC director to undergo the process and the first without a medical degree since the 1950s. Monarez, a microbiologist and immunologist holding a PhD from the University of Wisconsin–Madison, previously served as CDC’s acting director and deputy director of ARPA‑H, bringing extensive experience in infectious disease, biosecurity, and health innovation. During her Senate confirmation hearing, she reaffirmed support for vaccine safety and scientific rigor. She also emphasized her intent to restore public trust, modernize the CDC’s data infrastructure, and enhance disease preparedness and response.

FY26 appropriation – state of play

Through the month of August, both chambers of Congress will be in recess until they return after Labor Day. With the end of the fiscal year nearing on September 30, lawmakers will only have a couple of weeks to avoid a government shutdown. Prior to leaving for recess, both chambers were moving through the appropriations process.

On the House side, the chamber has passed both the Military-Construction-Veteran’s Affairs and Defense Appropriations bills. While those are the only two out of the 12 passed by the floor, the House Appropriations Committee has approved additional measures that are up for floor consideration.

On the Senate side, the chamber passed three appropriations bills before leaving for recess. They passed a package of the Military-Construction-VA and Agriculture-FDA appropriations bills and the Legislative Branch appropriations measure. Additionally, the Senate Appropriations committee advanced two key spending bills: Defense and Labor-Health and Human Services (HHS)-Education.

The Labor-HHS-Education bill:

• Provides $197 billion in discretionary funding, including $48.7 billion for the National Institutes of Health (NIH), which is a $400 million increase over FY25, and maintains funding for all 27 institutes and centers.
• Preserves $1.5 billion for the Advanced Research Projects Agency for Health (ARPA-H), despite a proposed cut in the President’s budget.
• Upholds language prohibiting changes to NIH’s facilities and administrative (F&A) reimbursement methodology and supports international research collaboration in critical areas like pediatric cancer and HIV.
• Provides the Centers for Disease Control and Prevention (CDC) with $9.096 billion — a $70 million (2.2%) decrease — while continuing $12.5 million in firearm injury prevention research at both the CDC and NIH.
• Funds the Agency for Healthcare Research and Quality at $345.4 million, down $23.6 million from FY25.
• Allocates the Health Resources and Services Administration with $1.383 billion for workforce programs.
• Provides the Department of Education with $79 billion, including $2 billion for Federal Student Aid and a maintained maximum Pell Grant award of $7,395 for the 2026–2027 academic year.  

The Defense Appropriations bill provides:

• $851.9 billion in discretionary funding.
• $171.3 billion for the procurement of weapon systems.
• $140.5 billion for research, development, and testing of platforms.

With these two bills passed, the full Senate Appropriations Committee has now advanced eight of the 12 annual appropriations bills. Given the limited number of legislative days in September, passing all 12 appropriations bills through regular order appears unlikely — making a continuing resolution the most probable path forward to avoid a government shutdown.