April 6th, 2025
OVERVIEW
Last week was a culmination of across-the-board cuts totaling billions of dollars and tens of thousands of staff from agencies focused on health and safety, such as NIH, FDA, CDC, the Federal Emergency Management Agency and the National Oceanic and Atmospheric Administration. Many argue these cuts are hollowing out much-needed expertise. And the cuts were just extended to the Pentagon, where Elon Musk’s DOGE is planning to let go of 76,000 people.
TARIFFS
On April 2, President Trump announced a minimum 10% tariff on nearly all imports from 90 countries that are the U.S.'s trading partners, including to Canada, Mexico, Venezuela, plus larger tariffs on some individual countries such as Cambodia (49%) and Vietnam (46%). On top of China's 34% reciprocal tariff, imports from that nation will also face previously announced 20% tariffs—totaling a nearly 60% tariff for China. Some goods are exempted: steel/aluminum articles and autos/auto parts already subject to Section 232 tariffs; copper, pharmaceuticals, semiconductors, and lumber articles; bullion; and energy and certain minerals not available in the U.S.
As a result, global markets plunged with the Dow closing 2,200 points down and the Nasdaq entering bear market. Some countries announced they would levy retaliatory tariffs against the U.S. and some 50 countries have reached out to negotiate with the White House. Many experts are projecting a 60% chance of a recession due to the tariffs. Congress is concerned with Senator Ted Cruz (TX) warned that his fellow Republicans risk a “bloodbath” in the 2026 midterm elections if Trump’s “liberation day” tariffs cause a recession and trigger a full-blown trade war that would destroy jobs and the economy. Senators Chuck Grassley (R-IA) and Maria Cantwell (D-WA) introduced bipartisan legislation on April 3 to give Congress more power over placing tariffs on U.S. trading nations. It isn’t expected to pass, but is a symbolic pushback.
CUTS
Since March, NIH has sent hundreds of letters to researchers notifying them that their grant funding is being withdrawn because their projects “no longer effectuate agency priorities.” The only explanation provided is that the research projects are connected to “DEI,” “transgender issues,” “vaccine hesitancy,” or another topic that the president and his administration dislike. Despite this DOGE-led effort to be more efficient, the very grants being cut are significant sources of economic ROI—in 2024 alone, NIH’s grant program spurred more than $94 billion in profit. The cuts have disrupted ongoing biomedical studies at leading research institutions, threatening years of medical progress, and forced researchers to abandon studies, patients to be turned away, and programs to lose key personnel and some post-docs who are leaving the field of scientific research completely.
FIRINGS
Following through on their promise, on April 1 President Trump and Secretary Kennedy issued 10,000 more RIFs (reduction in force notifications) within HHS.
HEALTH
- PUT ON LEAVE: Jeanne Marrazzo, Director of the National Institute of Allergy and Infectious Diseases (NIAID), Diana Bianchi, Director of the National Institute of Child Health and Human Development (NICHD), Vence Bonham, Acting Director of the National Human Genome Research Institute (NHGRI); Shannon Zenk, Director of the National Institute of Nursing Research; and Emilio Pérez-Stable, Director of the National Institute on Minority Health and Health Disparities as well as other senior leaders
- FORCED OUT: Center for Biologics Evaluation and Research (CBER) Director Peter Marks, CBER Deputy Director at Julie Tierney, Office of New Drugs Director Peter Nagy, and the Tobacco Center Director Brian King, among others
- ELIMINATED: Entire offices of NICHD and NHGRI, and large parts of the NIH Communications, HR and Policy offices as well as the Center for Drug Evaluation and Research (CDER) communication team which manages databases on drug approvals and the drug shortages list
- CUT: The Brain Research Through Advancing Innovative Neurotechnologies (BRAIN Initiative) was cut by 20%
- RIF: Within FDA, scientists at the Center for Veterinary Medicines working on avian influenza, antimicrobial resistance, and food safety, as well as affiliates of drug and device centers were sent reduction in force letters. Within CDC, thousands of scientists working on injury prevention, birth defects, reproductive health, substance use, epilepsy, lead poisoning and environmental health, among many public health areas.
- REMAINS: FDA’s Oncology Center of Excellence and ARPA-H
DEFENSE
The DoD is also facing DOGE-based cuts: to reduce DoD civilian workforce by 5-8% which could impact 76,000 employees. Civilian employees at DoD received emails offering Elon Musk’s “fork in the road” buyout program if they resign between April 7 and 14. Also a hiring freeze is currently reducing workforce by ~6,000 per month.
Overall, agencies must create with DOGE then send a deregulatory plan to the White House Office of Management and Budget (OMB) by April 19. This is part of the execution of the February 19 Executive Order that specifically directed agency heads to work with “DOGE Team Leads” and OMB Director Russell Vought on a process of reviewing all regulations within 60 days. The agencies must identify all regulations that are unconstitutional or “raise serious constitutional difficulties, regulations that are based on unlawful delegations of legislative power or on anything other than the best reading of the underlying statutory authority or prohibition, that implicate matters of social, political, or economic significance that are not authorized by clear statutory authority,” as well as regulations that “significantly and unjustifiably” impede technological innovation, inflation reduction, economic development, or research and development and “that impose undue burdens on small business and impede private enterprise and entrepreneurship.” The order to submit deregulatory plans, on top of an earlier one requiring 10 rules be scrapped for every new rule issued, could dramatically scale back FDA’s and CMS’ regulatory plans. CMS plans to cut at least 300 agency employees and consolidate certain functions.
Also within HHS, Secretary Robert F. Kennedy Jr. has called for a new holistic approach to tackling chronic disease that looks beyond pharmaceuticals to also include nutrition and dietary supplements. He is working on a plan to reorganize FDA into five broad offices, with all of its product review divisions merged into one. This reorganization could cause seismic shifts in how quickly and effectively innovations are approved by the FDA, directly impacting industry and patients.
Lawsuits continue to challenge the grant cuts and RIF firings. Last week, the attorneys general from Arizona, California, Colorado, Delaware, Hawaii, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, Rhode Island, Washington, and Wisconsin filed a lawsuit arguing that the cuts go against congressionally mandated directives for NIH, including statutory requirements that the NIH Director work to improve research on LGBTQ+ health, expand research on women’s and reproductive health, and diversify the biomedical research workforce. Led by NY Attorney General Letitia James, this lawsuit won a court order temporarily blocking the Trump administration from slashing $11 billion in health funding for state and local governments.
As for the administration’s sudden cut to indirect costs cap to 15% for NIH grants, this was officially stopped by a federal judge in Massachusetts on April 2. The cap on funds would have applied to research money the government pays to universities and institutions to cover the expenses of facilities, utilities, laboratory equipment, and project support staff. The reduced rate was initially challenged on February 10 by 22 states and other academic membership organizations, arguing the cap will have destructive effects on research and walk back decades of progress made by the scientific community and that it violated the Administrative Procedure Act and was arbitrary and capricious, failing to follow notice-and-comment rulemaking procedures, and being impermissibly retroactive. The NIH claimed this was just moving to other funding areas and estimated the reduced rate would save the government at least $4 billion a year. An appeal is expected by the Trump administration.
In addition, on April 2, a federal judge in Maryland ordered the Trump administration to continue reinstating probationary federal employees who were fired from 20 federal agencies since the president took office earlier this year in another lawsuit by state AGs. Previously, on March 14, a coalition secured a court order reinstating federal workers subject to mass firings at 18 agencies. On March 5, a coalition of AGs won a court order stopping the Trump administration from withholding vital funding to NIH. Other lawsuits on his birthright EO stopped the administration while others on the Department of Education cuts and legality of DOGE are pending.
CMS
HHS decided to continue some of former President Biden’s Medicare policies and revise others in the Inflation Reduction Act in the Medicare Advantage and Part D Contract Year 2026 final rule that was released on April 4. But the rule scrapped a proposal by the Biden administration for CMS to cover anti-obesity drugs for weight loss. It also calls for 2026 consumer-friendly IRA provisions that eliminate beneficiary cost sharing for vaccines recommended by the Advisory Committee on Immunization Practices (ACIP) and that are covered under the Medicare Part D prescription drug benefit. It also continues for 2026 the IRA’s $35 limit on a one-month supply of covered insulin products for people with diabetes and the Medicare Prescription Payment Plan, which allows beneficiaries to pay for their covered medications in monthly installments during the coverage year.
MEASLES
U.S. measles cases rose 26% in one week alone with the total now reaching 607 in 21 states and includes two deaths. This is a 26% jump from a week ago. The Centers for Disease Control and Prevention (CDC) reported 124 new cases on April 4, with 97% of them in people who were not vaccinated. Secretary Kennedy plans to attend the funeral of the second person to die from the measles, an 8-year old girl who was not vaccinated and had no underlying conditions. He continues to state publicly that vaccination is a personal decision. With the HHS cuts, thousands of vaccine centers and programs throughout Texas, Arizona and hardest hit states have shut down. Part of the COVID response included increased funding for vaccine distribution but that no longer exists under Secretary Kennedy.
BUDGET
On Saturday, April 5 the Senate passed their budget resolution by 51 to 48 that included Republican Senators Collins and Paul opposing it after an overnight marathon of votes on amendments. The House passed their budget resolution on February 25 by a 217 to 215 party line vote.
The key components include extending Trump’s 2017 tax cuts for individuals and closely held businesses that expire at the end of 2025. It permits for $1.5 trillion in new tax cuts over a decade, and calls for a $5 trillion increase to the federal borrowing limit to avert the Treasury Department hitting the debt ceiling this summer. Of note, the Senate proposes $5.3 trillion tax cuts over 10 years while the House proposes $4.5 trillion over the same period. The Senate budget also calls for $150 billion in new funds for the military and $175 billion for immigration efforts, two priorities for Trump. The Senate version also includes $4 billion in spending cuts over a decade, which is much less than the $2 trillion cuts in the House version.
TAXES
Senate Finance Committee Chairman Mike Crapo (R-ID) said he has received 200 requests for tax cuts to include in the bill that they will craft following the resolution. Atop the list are eliminating taxes on tipped wages and overtime pay, plus a new deduction for car buyers and seniors. A group of House lawmakers have demanded an increase in the $10,000 cap on the state and local tax deduction (SALT), and most Senate Republicans back a repeal of the estate tax. Under consideration is a new income tax bracket for those earning $1 million or more and a repeal of the carried interest break used by the hedge fund and private equity industries. To make the numbers work, the budget also calls for using a gimmick to count the extension of Trump’s 2017 tax cuts — estimated to cost nearly $4 trillion — as $0 for official scoring purposes. The Senate parliamentarian must approve this budget side-step before the legislation goes for a final vote, a risky gambit that could force the GOP to forage for last minute tax cut offsets. Finally, Republicans agree on spending cuts in the legislation to include cutting food stamps, Pell Grants and renewable energy subsidies. The plan is to enact the final tax package sometime between May and August, and as long as legislation adheres to the rules detailed in the budget resolution, it can pass with just Republican votes.
FUTURE
Amid the chaos of tariffs, cuts, and firings, the FY2026 appropriations process is underway and Chairs Tom Cole (R-OK) and Susan Collins (R-ME) both want to get back to regular order, as the last time Congress completed all bills on time was in 1996. Each of the 435 Members in the House and 100 in the Senate are accepting submissions now. And with the DoD receiving a $6 billion increase while the non-domestic programs received a $13 billion cut in the FY2025 Continuing Resolution deal that funded all of government through the end of September, the DoD remains a great target for collaborations—whether in weapons, communications, power, health or any high-tech innovation. We will keep tracking and sharing updates.