Hi-
I write this still ignorant of whether the control of my beloved New
Jersey will lie in the pristine palm of a Democrat or Republican.  How
I tossed and turned all night, all neurons locked in anxious
anticipation!  Can my heart withstand another minute of torment from
government by the unknown??
Anyway.. I was asked to post the repsonses I received concerning the
recent NIH change from 4% to 3% for yearly recurring costs.  Most of
these have been sent to the group.  For me, the issue was settled
when an NIH grants person said that everyone gets 3% automatically.
See below.
Most of the responses:

In response to your recent posting on the listserve,
the cost of living change came out in the nih guide some
time ago.  my conversations with people at the nih has
been that even if people put the 4% in, they (the nih)
are going to cut it anyway.  I have been instructing investigators
with new submissions or competitive renewals to go in with 3 since
last spring.  I think that it simplifies things.  It's a pay now or
later sort of thing as far as I see.

When using the 3% rule (which happens every dozen years or so) don't
short change yourself by forgetting to add AND EXPLAIN anticipate
promotions, existing labor contract increases, etc. Our faculty got
flat monthly increases when going from assistant to associate and from
associate to full professorship.
If somebody is going up early, handle that carefully.

At NCI, our spreadsheets are calculated to only build in a 3% increase
for future years, so it does not make a difference if they submit the
budget with the 4%.  The PI will only get 3%.
Grants Management Specialist (NCI)

We have just completed submission of several noncompeting
continuations at NIH and this subject came up. All projects funded
with start dates on or after October 1, 1997 will be caluclated using
a 3% escalation factor. Multiyear awards with earlier start dates will
use the escalation factor approved when the initial award was made. In
the course of these discussions, I learned there is discussion at NIH
that the escalation factor may be set lower than 3%. I think that may
create problems in the future and suggested NIH consider establishing
2 escalation factors:  one for salaries, a second for everything else.
I think limiting salary increases to less than 3% will make it
difficult to hold on to good support personnel as well as result in
the % of salary of PIs recovered decrease through the life of a
project. *

We "suggest" 3% to PIs submitting grant applications and publish NIH's
intent in each issue of our newsletter and electronic mailings.  It
took 2 years and much abuse (of us) to convince PIs to cut back to 4%;
I don't want to go through it again. --

Charles Hathaway, Ph.D.
Grants Development
Research Foundation for Mental Hygiene
New York State Psychiatric Institute
722 W. 168th St.
New York, NY 10032
(212) 543-5807