OMB's New Proposed Rule Will Turn Federal Grants Personalist and Partisan

At the end of May, the Office of Management and Budget (OMB) put forward a proposal for rules governing federal financial assistance, which includes almost all grant making in the United States including scientific research. OMB, which is run by the conservative machinator Russell Vought, has been a nexus of major Trump demolition jobs, including the immediate impoundment of scientific grants when Trump retook office in 2025. So scientific research in the United States was already on the run before this latest proposal.

The Trump administration hates America’s research institutions. The best guide to the sentiments of an administration are its budget priorities, and the budget priorities of the administration on scientific research are clear. Of course, the Trump administration hates most public services.

The proposal for scientific grants drew attention for two reasons: (1) it involves several ridiculous political moves that obviously stem from the Trump administration’s desire for centralized, loyalist control, and (2) it is an opportunity for public comment on this administration’s science policy.

Public comments on proposed rules are usually unremarkable. Usually a set of proposed rules will get a few dozen responses from industry and public sector stakeholders, lobbyists, and experts. Recently, a rule reforming the calculation of salaries to restrict H-1B visas garnered hundreds of individual responses; it wound up with 1,322 responses, which is an exceptionally high number.

When I started drafting this, about a week before comments closed, the number of public comments on the OMB proposal sat at nearly 100,000. On the Monday morning comments were due, it reached 292,157 comments, ultimately finishing at 341,699 before comments closed. This outpouring is the result of an effective organized effort by a range of organizations, from business coalitions to faculty unions at universities.

Unfortunately, this administration has shown little inclination to listen to the public. They will likely try to force the rule through with an effective date of October 1, though they do have a statutory obligation to read and respond to comments, which is why the volume and range of responses is important. With that said, I want to offer some observations on the rule, the state of American science funding, the damage we need to repair, and what a path forward might look like.

What does the proposed rule do?

You’ve probably seen some of the top line items: It gives control of scientific grantmaking to political appointees; it heavily restricts how grant money can be used; it creates a rationale for discriminating against researchers on the basis of protected political speech. All of these things are true, but I thought it might be useful to spell this out. 

The actual proposed rule is 400 or so pages (or 100 pages in the National Register’s compressed multi-column format). It’s a massive rules proposal that impacts dozens of federal agencies across the government. This is because so many different agencies have grant making procedures. Federal scientific funding is decentralized across departments. Health-related research is generally within the Department of Health and Human Services; economic research is generally within the Department of Commerce. There are different grant making agencies within these different departments, which all have distinct bureaucratic processes for evaluating, disbursing, and tracking grants. All of these processes are grounded in 2 CFR § 200, “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.”

That’s actually what the proposed rule is changing: It’s taking the broad range of different procedures across different agencies and saying, (a) grant making decisions are made by agency heads, and (b) they are subject to these criteria for evaluation, and (c) they have these procedural elements.

The most widely discussed elements of the proposed rule are (a) and (b), and I think simply explaining them is enough to illustrate why they’re dangerous.

The proposed change to 2 CFR § 200.305 specifies that pre-issuance review must be conducted by “senior appointees (or their designee),” and this refers invariably to the political appointees at the head of agencies. This change comes along with specifying a range of criteria for evaluating those reports, criteria largely drawn from Trump’s various executive orders, including anti-trans and anti-DEI orders. And the senior appointee clause alone is enough to raise concern. Historically, many institutions have grant review processes which go through subject matter experts or peer review processes set by the agency, but those are not escalated up to political appointees.

Advocates of the proposal will say that this is to maintain the integrity of the scientific process, the administration’s “Gold Star Science” pitch. But if integrity is the goal, subject matter experts actually should be the ones approving scientific research—in many cases that process developed specifically in order to reduce the involvement of political appointees in technical scientific research. Political appointees were generally separate as a matter of procedure, and focused on big-picture priorities within the administration, rather than the day-to-day grants.

As readers familiar with Project 2025 may already be aware, this separation is the explicit target of Vought’s broad theory of government control: reclassifying career government workers is a way to centralize power in the executive branch, by removing subject-matter experts who have served through multiple administrations, dismissing independent panels that were appointed through non-partisan processes, and the like. His use of Schedule F classification to slash bargaining rights is a part of this. So is the proposed rule centralizing grant approval with political appointees.

I mentioned the proposed rule also includes criteria for evaluating grants by those senior appointees. The first criterion, 2 CFR § 200.305(b)(1) in the revised text, “Discretionary awards must, where applicable, demonstrably advance the President’s policy priorities.” The second criterion is a laundry list of considerations related to whether a potential grantee or their research might be unduly woke, including (b)(2) “(ii) Denial by the recipient of the sex binary in humans or the notion that sex is a chosen or mutable characteristic, (iii) illegal immigration, or (iv) any other initiatives that compromise public safety or promote anti-American values.”

A large portion of the proposed rule includes these rambling statements on the anti-woke content of the rulemaking. The proposed revisions of 2 CFR § 200.300 and §§ 200.218-220 make the political agenda explicit. But honestly the nitty-gritty isn’t necessary there. OMB provides their own pseudo-history of grant-making in the executive summary:

Federal financial assistance programs, and the activities performed under Federal awards, have not always remained properly aligned with core purposes authorized by law, nor served the needs of the American public as intended. This lack of transparency, accountability, and proper oversight became increasingly clear between 2021 and 2024. Federal awards were often used during those years to promote a ‘woke’ policy agenda that did not reflect the values of the vast majority of the American public. For example, Federal programs and funding opportunities were designed to advance unlawful identity-based ‘Diversity, Equity, and Inclusion’ (DEI) policies and preferences across the country…

The passage cites Trump’s executive orders related to grantmaking and a Heritage Foundation study by David Ditch.

The transparent discrimination in the proposed rule will result in the government facing multi-million-dollar lawsuits, losing, and appealing—just as it did after its illegal impoundment of federal research spending. But these lawsuits themselves are a strain on American science funding as they delay and destabilize the course of American research.

For the purpose of “defunding the left,” the disruption of appropriations through impoundment, lengthy legal battles, and slowing appropriations is as good as cutting the funds outright. We know this because, despite lip service paid to the idea of efficiency, everyone involved in federal bureaucracy is aware that throwing a bunch of technically dense material to political appointees isn’t just a bureaucratic slowdown—it’s a de facto denial of grants, done through protraction of the procedure. We’ve already seen this with grant issuance in HHS, where political appointees have seized power from distributed, non-partisan bureaucratic institutions.

Procedure is the sledgehammer of nerds

Procedural mechanisms are both the place where the OMB proposal gets more destructive and where we, as people who at some point will have to consider how to build out of this pile of rubble, can draw some useful lessons.

Procedure is boring until it becomes a necessary bulwark against the authoritarian apparatus, and matters of procedure have been fundamental in opposing the Trump administration cuts to science funding. Ongoing lawsuits from labor groups, state Attorneys General, and universities often rely on procedural mechanisms both to score legal wins and to create information that shows the bad faith of the administration.

A core goal of the OMB rule making is to create a bunch of tools to quickly audit and cancel grants. The most pernicious such tool is in the revision of §200.340, which has the same ideological content and focus as §200.300, but also includes a mechanism for terminating grants. It is referred to throughout the proposal as the “discretionary termination rule.” The discretionary termination rule is basically Vought’s attempt to avoid the legal issues around arbitrary and capricious termination of grants, including terminating grants over the protected speech of the grantees.

To put it very bluntly, the rule is an attempt to give the widest possible power to political appointees to terminate grants without providing any rationale, because the prospect of the provided rationale being used in court is one of those areas where the administration keeps getting tripped up. So when administration officials get dragged into court for refusing to pay out an award, the proposed rule would shield them from having to provide an elaborate defense beyond simply stating that the research no longer aligns with their objectives. This change in the rule would violate any number of federal statutes, but that doesn’t bother this administration at all.

The rules make awards less valuable to awardees

One of the elements which has gotten some discussion among academic publishers and researchers, but been (in my opinion) slightly mis-framed is the concern regarding disallowance of subscriptions to journals, membership in professional organizations (proposed revisions to §200.454) and publishing expenses (proposed revisions to §200.461). In some cases, this has been framed as an attack on academic publishing as an industry, and there’s truth to that—but it’s an unsympathetic line among researchers because, honestly, there are some ways in which the academic publishing industry warrants attacking.

The problem here is that the revisions are not really attacking the publishing industry. They’re reducing the ability of researchers to pay for engagement in publishing, either as readers, with subscriptions, or as authors, with publishing fees.

My view, which I suspect I share with many academics, is this: Under ideal conditions, the cost to researchers to read and publish materials should be nothing. We want research to be widely available and accessible, and we want to make it easy for constructive contributions to be published.

The OMB proposal will make it much more expensive for researchers at every point in the process, and that is bad.

The road ahead, in a multi-polar world

America’s position as the undisputed leader in scientific research is gone. Many politicians and organizations dangle the possibility of reclaiming that position in front of the White House and Congress and the American public in the hope that they can motivate some enthusiasm for scientific funding or engagement with these problems.

Presently, estimates on scientific research put the U.S. more-or-less at parity with China—slightly behind on some issues and slightly ahead on others—and Europe is drawing a lot of scientific researchers leaving the U.S. with a concerted effort. But the present state of play isn’t the problem. The problem is that we’re going to spend (at least) the next two years with the White House hacking away wantonly at the infrastructure of American scientific research.

Three racecars might be running neck-and-neck, but if one is grinding against the barricade and another is accelerating, then they’re not at parity. In this metaphor—to be clear—the US is the car on the barricade. China might be accelerating, but assessment of Chinese scientific research is complicated and way outside of the scope of this discussion.

I consider myself a “liberal” rather than a “leftist” on issues of scientific research because of how I think American scientific research should work: Private sector and capital is effective at driving supply and diffusion of technology, but we need a robust public sector for all of the forms of research that can’t be straightforwardly connected to ROI (and to check the cases where the private sector gets high on its own capital supply).

WWII and the Cold War world order illustrated some of the advantages of liberal democracy for scientific research, and there’s a reason why many of the great political philosophers both liberal (J. S. Mill, Karl Popper) and democratic socialist (Rosa Luxemburg) aligned the success of scientific and technological research with the rights of workers and the broadest, most beneficial sense of social welfare.

Robust public research is both an economic engine and a font of public good. Some mechanisms in private enterprise have a role to play, when it comes to using economies of scale and competition as a way to drive production and the accessibility of certain goods. But industrial applications need a rich research environment to build this world.

This is the argument that I think we—the liberal-to-left community who are going to try to rebuild this part of our society—need to make with respect to the reconstruction of research infrastructure in America. Industry needs research, so it should pay a significant contribution to the conducting of research, through private donations and capital but also and especially in the form of taxes that build the critical infrastructure of this country. Corporate profits across the American economy are built on public investment, and corporate contributions to public infrastructure should reflect that.

Further, the collective welfare of the public depends importantly on robust research infrastructure maintained with federal funds and administered independently of political actors. In order to have safe air, food, and water, we need to monitor the quality of those things. In order to have access to cheap energy, we need to monitor changes in the global environment and invest systematically in both infrastructure and research. Such research cannot be steered by politicians in its day-to-day operation, because the politics of these areas are volatile. That’s why the bureaucratic bulwark matters, and why it needs to be defended.

Featured image is Front view of Eisenhower Executive Office Building, by Yuhan Zhang