Why Business Should Oppose OMB’s Plan To Politicize Grantmaking
The White House Office of Management and Budget (OMB) is currently proposing significant changes to its guidance on how government agencies assess, select, and oversee federal grants and cooperative agreements. These changes have the potential to negatively impact various aspects of our nation, including scientific progress, global competitiveness, economy, health, infrastructure, and national security. It is crucial for American businesses, both large and small, to familiarize themselves with these proposed changes and voice their concerns to OMB, the White House, and Congress.
Background:
The driving force behind these proposed changes is Russell Vought, the current Director of OMB under President Trump. Vought is a proponent of the “Unitary Executive theory,” which posits that all executive power is vested directly in the president, giving them absolute control over federal agencies, civil servants, and the federal budget. Vought was also involved in Project 2025, where he played a key role in shaping its policies and implementation strategies.
Key Issues of Concern:
Several sections of the proposed rule have raised concerns among experts and stakeholders. These include:
§200.205 – Grants political appointees total control over grant awards, potentially leading to decisions based on political ideology rather than merit.
§200.206 – Allows grant applicants to be denied funding based on organizational affiliations, which could have far-reaching implications.
§200.220 – Broadly prohibits international scientific collaboration, disrupting partnerships crucial to U.S. leadership.
§200.340 – Allows active grants to be terminated at any time, for any reason, without the need for compliance or fraud findings.
Impact on Communities:
The proposed changes to CFR Part 200 would affect every federal grant recipient, including state and local government agencies and community nonprofits. An example of the potential impact is seen in a scenario where a FEMA grant for upgrading a water treatment plant in Richmond, Virginia, was abruptly canceled by the Trump administration, leading to severe consequences for the community.
Conclusion:
The proposed changes have received over 70,000 public comments, with strong opposition from scientific, academic, and nonprofit communities. However, commercial and financial businesses have largely remained silent. It is crucial for all stakeholders to voice their concerns before the comment period closes on July 13, 2026. Failure to intervene could result in the implementation of these changes on October 1, 2026, with far-reaching consequences for the nation.
As someone with experience in research, academia, and government, I urge all stakeholders to actively engage in this process and protect the integrity of federal grant programs.
