WASHINGTON, DC – JULY 17, 2025: Russell Vought, Director of the Office of Management and Budget (OMB). (Photo by Anna Moneymaker/Getty Images)
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The White House Office of Management and Budget (OMB) is suggesting comprehensive amendments to its guidelines on evaluating, choosing, and supervising federal grants and cooperative agreements. These changes could significantly impact the nation’s scientific advancement, global standing, economy, health, infrastructure, and security. It is crucial for American businesses of all sizes to understand these provisions and communicate any concerns to OMB, the White House, and Congress.
Background
The initiative is driven by Russell Vought, President Trump’s OMB director, who advocates the “Unitary Executive theory.” He interprets Article II of the Constitution as granting the president total authority over federal agencies, civil servants, and the federal budget. Vought also played a significant role in Project 2025, writing a part of its summary report and developing a confidential “transition playbook” for swift implementation.
The preamble of OMB’s proposed rule highlights its objectives. Elizabeth Ginexi, an NIH program officer for 24 years, observes that it relies significantly on reports from the Heritage Foundation, partisan Senate documents, and White House fact sheets, rather than independent scientific or administrative evaluations. It portrays decades of peer-reviewed research on climate, public health, equity, and international cooperation as “woke,” “neo-Marxist,” “anti-American,” or “divisive ideology.” It also views the scientific community’s infrastructure, including conferences and publications, as unnecessary expenses to be reduced or cut.
Key Issues Of Concern
The following five sections of the proposed rule are particularly alarming:
§200.205 – Political appointees gain total control over grant awards
Historically, Congress has allocated funds to federal science agencies based on the premise that grants would be awarded through a merit-based, expert-review process that is “open, fair, reliable, and free of political influence, favoritism, or retaliation,” as stated by the nonpartisan Center on Budget and Policy Priorities.
The proposed rule transfers decision-making power from federal experts, grant review committees, and career administrative staff to political appointees who may lack expertise. Political appointees will be forbidden from deferring to peer reviewers or routinely approving their recommendations. Instead, grants must align with the President’s policy priorities. Proposals seen as promoting “anti-American values,” however loosely defined, can be dismissed outright.
Scientific facts are constant, regardless of political leadership. Replacing merit with political ideology risks promoting pseudoscience. The U.S.’s leadership in science and technology post-WWII will be compromised, affecting the nation’s competitiveness and the economy, quality of life, and national security.
§200.206 – Denial of funding based on organizational “affiliations”
This section allows for barring grant applicants linked to organizations that “advocate for the overthrow of the United States Government” or “undermine public safety or national security.” OMB’s broad definition of “anti-American activity” could lead to excluding applicants associated with mainstream environmental, public health, or civil rights groups.
§200.220 – Limits on international scientific collaboration
This provision would significantly disrupt international partnerships, which have been crucial for U.S. leadership in various fields.
§200.340 – Termination of active grants at any time, for any reason
This rule increases agency power to end active grants mid-term merely because a political appointee deems them “inconsistent with program goals or agency priorities.” No noncompliance or fraud needs to be proven. Agencies must provide only a brief written rationale that cannot be appealed.
If implemented, this provision could retroactively jeopardize successful long-term research and training programs. It could also enable officials to halt methodologically sound research with findings the President wishes to suppress. This contradicts the principles of a free society.
HOUSTON, TEXAS – Protesters hold signs as physicians, research scientists, administrators and students gather in the Houston Medical Center to speak out against proposed cuts in medical research funding. March 25, 2025 (Kirk Sides/Houston Chronicle via Getty Images)
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But Wait…There’s More
The proposed changes to CFR Part 200 apply to every federal grant to every recipient, including state and local government agencies and community nonprofits throughout the United States, its territories, and the District of Columbia.
Residing in Richmond, Virginia, I witnessed the potential implications when, on January 6, 2025, the city’s 101-year-old water plant failed during an ice storm. Water pressure dropped to zero for two days, and safe tap water was inaccessible for five. This affected residents, businesses, hospitals, schools, and other facilities across the city and a neighboring county. Virginia’s General Assembly had to delay its opening session.
Despite the disruption’s severity and costs, shortly after Trump resumed office, his administration suddenly revoked a $12 million FEMA grant intended for essential upgrades to Richmond’s water treatment plant. The grant was awarded in 2023 and was about to be disbursed. Instead, FEMA canceled it along with nearly a billion dollars in other “Building Resilient Infrastructure and Communities” (BRIC) grants, significantly impacting water treatment infrastructure projects nationwide.
In 2024, the federal government provided $1.1 trillion in grants to state and local governments supporting a wide range of programs, including Medicaid, transportation, nutrition for needy families, and Section 8 housing vouchers, as detailed by the Congressional Research Service. On average, federal grants account for 36 cents of every dollar states spend, according to Elizabeth Ginexi.
If adopted, OMB’s proposed rule would disrupt the collaboration between taxpayers, the federal government, states, and municipalities. By bypassing Congress, Vought aims to enhance President Trump’s power to favor jurisdictions and organizations aligned with his policies while penalizing those that are not. This approach aligns more with autocratic regimes than a constitutional republic like the United States.
In Conclusion:
As of now, OMB’s proposal has received over 70,000 public comments. While America’s scientific, academic, and non-profit communities have expressed strong opposition, commercial and financial businesses have remained largely silent, which could be a costly oversight. CEOs who overlook the benefits of research and innovation should consider the potential impacts that a water supply loss, a collapsing bridge or floodwall, or an epidemic might have on communities and their businesses.
The stakes are high, and time is limited. The deadline for submitting comments to OMB is next Monday, July 13, 2026, at 11:59 PM EDT. If the rule is finalized without Congressional intervention, it will take effect on October 1, 2026.
Throughout my career, I have led research projects funded by grants or contracts from five federal agencies and several national foundations. I have also held various leadership positions in academic medicine and spent seven years in the executive branch of the federal government. My views are my own and do not necessarily reflect those of these organizations and institutions.
