OMB published proposed rule subjecting all federal grants to political-appointee review and requiring recipients to advance the president's priorities

On May 29, 2026, OMB published a notice of proposed rulemaking in the Federal Register that would revise the government-wide Guidance for Federal Financial Assistance under 2 CFR Subtitle A. The proposed rule would require every federal grant recipient to "demonstrably advance the president's policy priorities" as a condition of award, replacing the existing framework — under which Congress appropriates funds for specific statutory purposes adjudicated by subject-matter experts — with one in which senior political appointees conduct pre-issuance reviews of all grants. Peer review panels would become advisory only. The rule would also grant political appointees authority to terminate any federal award "at any point and for any reason" if the agency determines it no longer advances the administration's priorities or "national interest," regardless of the congressional purpose for which funds were appropriated.

The proposed rule further embeds cross-cutting prohibitions into all federal awards: grantees would be barred from DEI-related activities, "gender ideology," and disparate-impact liability theories, and from collaborating with covered foreign entities. Allowable costs for publication, conferences, memberships, and public communications would be significantly narrowed. The rule specifies a planned effective date of October 1, 2026, with a public comment period open through July 13, 2026. The rule, if finalized, would codify government-wide what the administration had previously imposed agency-by-agency through executive orders and individual grant-program rewrites.

Updates

2026-06-30 — Vought defended rule before House Appropriations Committee [2]

OMB Director Russell Vought appeared before the House Appropriations Committee on June 30, 2026 to defend the proposed rule. Democratic members called it "an attempt to subject all federal funding to a political litmus test."

2026-07-14 — Rule drew mass public opposition as comment period closed [3, 4]

As the public comment period closed, the proposed rule drew broad opposition. OMB received at least 300,000 public comments, and higher-education, scientific, and public-health organizations urged that it be withdrawn. The American Council on Education, representing roughly 50 groups, said the rule would "transform existing legal requirements into instruments for partisan purposes." Every Senate Democrat signed a July 1, 2026 letter to OMB Director Russell Vought demanding the regulations be withdrawn, and Senate Appropriations Chair Susan Collins warned the rule would "undermine scientific and biomedical research." Legal advocacy groups including Democracy Forward said the comments laid the groundwork for future litigation.

2026-07-17 — Federal judge barred retroactive use of OMB's grant-termination clause [5, 6]

U.S. District Judge Indira Talwani ruled for 23 Democratic-led states and the District of Columbia, holding that OMB's existing termination clause does not permit agencies to cancel grants based on program goals or priorities identified after the grants were awarded, and that the administration's broader interpretation had no basis in law. The ruling addresses the same OMB grant-politicization push underlying the pending rule and the funding cuts it would formalize.

2026-07-16 — Brandeis disability-parenting research center reported facing closure after NIDILRR grant removed from Grants.gov [7, 8]

Brandeis University's National Research Center for Parents with Disabilities — the only U.S. research center dedicated to disabled parents — reported that its federal grant through the National Institute on Disability, Independent Living, and Rehabilitation Research had been removed from the Grants.gov portal, leaving the center unable to apply for the renewal it would need to continue operating. The center's $2.5 million five-year grant, administered through the Administration for Community Living, was among at least 36 ACL and NIDILRR awards worth more than $6.5 million removed from the federal grants portal in 2026. Funding runs out August 31, 2026; without restoration, the center is expected to close. HHS did not respond to requests for comment on whether the grant was permanently cancelled or why.