Congress passes NDAA
At the end of 2025, both chambers of Congress passed the National Defense Authorization Act (NDAA) of 2026. The bill authorizes a topline of around $901 billion for defense programs, which is $8 billion more than President Trump’s request that was reflected in the original House measure. It includes $855.7 billion for the Department of Defense, $34.3 billion for the Department of Energy’s national security programs, and $512.4 million for other defense-related activities.
NSF announces organizational realignment
On Monday, December 15, the National Science Foundation (NSF) announced an organizational realignment and released an updated organizational chart. According to the agency, the changes are intended to streamline internal structure, reduce management layers, and improve efficiency in staff engagement, proposal review, and award processing.
Federal court upholds ruling vacating NIH F&A cap
On January 5, the U.S. Court of Appeals for the First Circuit affirmed a decision by the U.S. District Court for the District of Massachusetts vacating the National Institutes of Health’s (NIH) policy to cap facilities and administrative (F&A) cost reimbursements at 15 percent. The court concluded that NIH’s attempt to impose the cap through supplemental guidance violated existing appropriations language enacted by Congress, as well as Department of Health and Human Services regulations.
The ruling stems from litigation initiated in February 2025 by the Association of Public and Land-grant Universities (APLU) — in partnership with the Association of American Universities (AAU) and the American Council on Education (ACE) — challenging NIH’s action to limit F&A reimbursements on research grants. UNC-Chapel Hill is a member of these national associations. While under review, the case was consolidated with similar challenges brought by other plaintiffs.
APLU, AAU, and ACE have also filed related lawsuits challenging proposed F&A reimbursement caps at the National Science Foundation, the Department of Defense, and the Department of Energy. The Department of Defense and Department of Energy cases remain pending before the First Circuit.
DoD issues research security memo
On January 8, the Department of Defense (DoD) released a memorandum from Emil Michael, under secretary of defense for research and engineering, updating the department’s approach to research security reviews for fundamental research assistance awards.
The memo outlines several actions aimed at strengthening research security while maintaining support for fundamental research, including:
- prohibiting fundamental research assistance awards to entities listed under Section 1260H of the National Defense Authorization Act, which identifies Chinese military companies operating in the United States;
- establishing a department-wide Fundamental Research Risk Review Repository to improve information collection and coordination across DoD components; and
- developing automated vetting and continuous monitoring tools, where practicable, to help detect and mitigate foreign influence risks.
The DoD indicated these steps are intended to enhance consistency, information sharing, and risk awareness across the research enterprise.
Lawmakers make progress on FY26 appropriations
The week of January 16, 2026, both chambers continued working on advancing FY26 appropriations measures as the expiration of the current continuing resolution (CR) nears on January 30, leaving lawmakers two more weeks to avoid a government shutdown.
The House passed a two-bill package late Wednesday, including the State-Foreign Operations and Financial Services measures with a vote of 341-79. The $76.3 billion package will fund the Treasury Department, IRS, State Department, and more. Specifically, the State-Foreign Operations bill provides about $50 billion, which is a significant increase from the Trump administration’s initial request.
The Financial Services bill cuts funding for the IRS by about $1 billion from current levels, but it keeps overall spending flat for the Treasury Department and other agencies. The Senate passed the appropriations minibus that the House passed in the previous week with a vote of 82-15, which included funding for the Departments of Justice, Interior, Energy, and Commerce.
Still left on the to-do list are the Defense, Labor-Health and Human Services (HHS)-Education, and Transportation-Housing and Urban Development (HUD) appropriations bills. These remaining measures make up the bulk of FY26 appropriations. Leaders have expressed that a package with these bills is expected to be released this weekend, teeing up House floor action next week, while the Senate is on a weeklong recess ahead of the final week of session before the expiration of the CR.
Carolina alumna, faculty member Nicole Kleinstreuer appointed to NIH
On January 14, Nicole Kleinstreuer was appointed to the NIH to serve as the deputy director for program coordination, planning, and strategic initiatives.
Kleinstreuer has been serving in an acting capacity of this role since April 16, 2025. An alumna and adjunct faculty member at UNC-Chapel Hill, she is a leader in developing innovative, human-relevant research strategies that improve public health protection. Prior to this role, she served as the director of the National Toxicology Program Interagency Center for the Evaluation of Alternative Toxicological Methods, the executive director of the Interagency Coordinating Committee on the Validation of Alternative Methods, and the U.S. national co-coordinator for the Organization for Economic Cooperation and Development Test Guidelines Program.