OMB Proposes Rules Establishing Political Oversight of Grants

The White House is advancing a sweeping rule change that would give administration officials more power over billions of dollars in federal grants. The regulations seek to codify that Trump officials have the right to keep doing what they started last year: canceling thousands of grants that they said didn’t align with the president’s priorities, and shooting down new ones for the same reason.

The proposed rules would set up a process for this political review, possibly helping insulate it from legal challenges that stymied the administration in the past. Among many other changes, the rules direct “senior appointees” at federal agencies to take charge of awarding and terminating new and existing research grants and other federal awards—a change that reflects an August executive order.

“Federal agencies must perform pre-issuance reviews to ensure that federal award proposals selected for funding are consistent with applicable law, federal agency priorities, and the national interest,” the proposed regulations say, adding that “federal agencies heads [sic] must designate one or more senior appointees” to review “all discretionary awards.”

The more than 400-page document, which research and higher ed advocacy groups say they are currently combing through, goes further than just implementing the August executive order, which raised alarms about political interference in science. The White House Office of Management and Budget told Inside Higher Ed the changes would allow the administration to curtail grants unaligned with Trump’s EOs and policies, adding that “grantees out of alignment may now be suspended or terminated.” Those grantees include universities whose researchers receive National Institutes of Health, National Science Foundation and other federal agency grants.

OMB added that the proposal, which is open for public comment for 45 days, ensures “spending will be aligned with current law, Executive Orders, and agency priorities.”

Jules Barbati-Dajches, an analyst for the Union of Concerned Scientists’ Center for Science and Democracy, said in an email to Inside Higher Ed that “placing political appointees in the position to review and determine funding would replace merit with loyalty to a political leader.”

The proposal also, according to OMB, bans “grants that push disparate impact liability theories, discriminatory event services, DEI [diversity, equity and inclusion], gender ideology” and “child sex mutilation”—the term the administration uses for gender-affirming care—while also prohibiting “agencies from excluding faith-based organizations and applicants.” The proposal also “wipes out Green New Scam grant requirements and a public sector worker preference in evaluating grant proposals,” while also forbidding “grants for voter registration campaigns, issue advocacy, or political activities.”

Sarah Spreitzer, vice president and chief of staff for government relations at the American Council on Education, said this regulation, known as “uniform guidance,” governs the grant-making process for the whole federal government.

“This is likely a historic document because this is the Trump administration trying to implement a lot of the things that they’ve been trying to do within the first year and a half around the federal science agencies,” Spreitzer said.

“This would clarify and strengthen their ability to terminate discretionary grants for discretionary reasons,” she said, and she’s concerned such authority could be politicized and run counter to the scientific peer-review process that’s traditionally been used to decide which research projects to fund.

She said ACE will comment during the public comment period, and she needs to review all 400-plus pages of the proposal. “I think the devil is going to be in the details,” she said.

The document does include one bright spot for research and higher ed advocacy groups: It doesn’t, as had been expected, cap indirect research cost reimbursement rates in federal grants at 15 percent. Multiple research funding agencies attempted to do that after Trump returned to the White House, only to be blocked by courts and Congress. OMB doesn’t want to hear about it during the public comment period.

“In consideration of this legislative and report language,” the proposal says, “OMB is not proposing updates to the indirect cost rate negotiation system through this document. OMB may consider issuing a request for information on this topic in the future, but commenters should not submit comments on the indirect cost rate negotiation system in response to this document. As no changes are proposed on that topic, OMB does not intend to consider or respond to any such comments in the final rule.”

Debbie Altenburg, vice president for research policy and advocacy at the Association of Public and Land-grant Universities, told Inside Higher Ed in an email, “We’re pleased the administration has recognized previously enacted appropriations legislation maintains the longstanding structure for reimbursement of indirect costs while the research community and policymakers advance alternative models.”

But Spreitzer noted that, while there’s not a cap on indirect cost rates, the changes would generally prohibit indirect cost funding from being spent on publishing articles in scientific journals. The rules would only allow funding of publication costs when “expressly required by statute or approved in advance by the Federal agency on a case-by-case basis.”

“Publication costs are not inherently necessary to carry out the core programmatic objectives of most Federal awards,” the OMB wrote in the proposal. “In many cases, such activities are discretionary, vary widely in scope and costs, and may serve institutional, professional, or reputational interests rather than the specific objectives of the federal program.”