The Office of Management and Budget (OMB) has proposed a sweeping overhaul of the federal grantmaking process that could reshape how nearly $1 trillion in funding is distributed across 42 federal agencies. Stakeholders are currently weighing in through a formal comment period as they evaluate the potential impact on scientific innovation, infrastructure projects, and administrative burdens.
The proposed rule, which spans 412 pages, was published on Friday, May 29. According to the official notice, the OMB established a 45-day window for public input, a timeline that has drawn criticism from various organizations that requested an extension. The regulation is currently slated to take effect 80 days after the close of the comment period. Because the proposal touches upon a vast array of federal spending—ranging from public health and scientific research to local infrastructure like water systems, airports, and road construction—the breadth of the potential impact is significant, affecting both urban and rural jurisdictions regardless of political affiliation.
Administrative and Regulatory Hurdles
One of the primary concerns raised by critics of the proposal is the substantial increase in administrative overhead. Under the new guidelines, every reimbursement request would require written explanations, a shift that could complicate the financial operations of grant recipients. With federal agencies being downsized, many observers express concern that these additional documentation requirements could lead to delays in payments, potentially destabilizing programs that rely on consistent cash flow.
Furthermore, the proposal mandates increased auditing and accounting responsibilities for any organization employing contractors or workers. This includes strict compliance with E-Verify requirements and financial use regulations.
Impact on Scientific Innovation and Collaboration
The proposal has drawn specific scrutiny from the scientific community, particularly regarding the role of expert review. The new proposal would place sole power for approving, shaping, and terminating grants in the hands of OMB and other political appointees, while expert review is considered advisory and optional.
International collaboration is another area of concern. The proposed rules prohibit international collaborations and include restrictions on bilateral or multilateral collaborations, programs or activities (e.g., travel, research activities, technical assistance, and indirect costs of work) with “covered foreign countries or entities.” However, the definition of these entities remains vague and ill-defined and lacks a specific, vetted list, leaving the determination of restricted partners largely to the discretion of political decision-makers. This ambiguity creates a climate of uncertainty for researchers and businesses that rely on global scientific exchange to drive innovation. In the context of patent development, industry experts note that such uncertainty could also increase the risk and cost associated with patent filings, as the stability of the underlying research funding is no longer guaranteed.
Proposed Safeguards and Public Participation
In response to the proposal, some experts have called for standardized protections to ensure the integrity of the grantmaking process. Dr. Ron Manderscheid, a behavioral scientist, has advocated for a minimum set of mandatory measures to preserve the nonpartisan administration of funds. These include:
- Maintaining merit-based and objective review processes as the foundation of grantmaking.
- Requiring federal agencies to document and publicly justify any departure from established review recommendations.
- Limiting grant termination authority to clearly defined statutory, fiscal, or performance-related reasons.
- Ensuring that transparency requirements apply to both political decision-makers and the recipients of federal funds.
- Strengthening Congressional safeguards to protect the nonpartisan administration of federal financial assistance.
Separately, the National Institutes of Health (NIH) has issued a Request for Information (RFI) regarding a proposal to cap the number of simultaneous Research Project Grants held by a single principal investigator, suggesting a limit between two and four grants. The comment period for this specific NIH proposal is scheduled to remain open until August 3, 2026.
How to Submit Comments
The OMB is required to review all substantive comments submitted during the open docket period before implementing the rule. Interested parties may submit their feedback via the Federal Register docket. As of June 26, 2026, 67,437 comments have been filed. Organizations such as the American Public Health Association and Stand Up for Science have provided resources and tools to assist individuals in drafting and submitting their responses.
When preparing a comment, experts suggest being specific about which sections of the 412-page proposal are being addressed and providing personal examples of how the changes would impact specific programs or communities. All comments submitted to the Federal Register become part of the permanent public record, which may be used in future legal proceedings. The deadline for submitting comments on the OMB’s federal grantmaking proposal is July 13, 2026.