By Eyan Weissbluth
On July 13, the White House Office of Management and Budget closed the window for individuals and organizations to submit comments on its proposed revisions to the Regulation for Federal Financial Assistance (commonly known as the “Uniform Guidance”).
During the short 45-day comment period, OMB received nearly half a million comments on its proposed changes to how federal agencies administer financial assistance, including research grants. Organizations representing a vast range of interests and constituencies – including those well beyond the academic and other research sectors – submitted responses, warning that the proposal would destabilize the federal grantmaking process and dramatically increase administrative burdens for applicants. AAU also submitted a comment letter detailing how OMB’s proposal would harm America’s future economic and scientific competitiveness.
Taken together, these comments paint a troubling picture of how OMB’s proposal could undermine the effectiveness and stability of federal financial assistance, making it harder for nonprofits, states, and localities from carrying out their public service missions. Here are some major points of contention raised across sectors:
1. Expanded Federal Authority to Terminate Awards Midstream Without Appeal
Many organizations warned that OMB’s proposal would greatly expand the ability of federal agencies to terminate or modify awards midstream based on broad, undefined concepts rather than because of poor performance or noncompliance.
Organizations emphasized that the possibility of midstream grant cancellations would increase credit risk and unreimbursed costs for grantees; harm multi‑year research, infrastructure, community development, and clinical programs; and create an environment of fear that deters ambitious projects. Commenters also flagged that OMB’s proposal does not offer any means for organizations to appeal grant cancellations, raising due process concerns.
The National Sustainable Agriculture Coalition, for example, stated that “[r]ather than retaining the termination option as a last resort, this proposed rule would make it the norm. This all but guarantees uncertainty at best and chaos at worst for USDA-funded projects – particularly when projects span changing Administrations – penalizing farmers for shifts in national political leadership that are well beyond their control. Farmers and farmer-serving organizations depend on a stable business relationship with the USDA.”
Similarly, the Native American Finance Officers Association stated that “… a substantial portion of Tribal program funding flows through discretionary grants that would fall under the new termination framework. Broad agency discretion to terminate these awards based on shifting policy priorities, with no meaningful appeal rights, is antithetical to the federal trust responsibility.”
The Special Competitive Studies Project – a nonpartisan, nonprofit organization led by current and former industry and national defense leaders and focused on advancing America’s economic competitiveness, innovation capabilities, and strategic security – warned that the ability of federal agencies to cancel grants midstream would create a “degree of uncertainty [that] is poorly suited to scientific research,” which requires stable funding over long periods of time.
“Frontier research often requires multiyear commitments, specialized equipment, recruitment of highly skilled personnel, collaboration among multiple institutions, and contractual relationships with private-sector partners,” their comment letter said.
The organization also noted that the possibility of midstream grant cancellation could chill high-risk research, delay or abruptly end graduate training opportunities, disrupt public private collaboration, and weaken the U.S. innovation ecosystem – particularly in frontier technologies like AI, biotech, and semiconductors. This, they warned would make us less competitive against nations such as China.
The Information Technology and Innovation Foundation, a leading think tank on science and technology policy, warned that “OMB’s proposed rule risks undermining … [U.S.] leadership, eroding confidence in federal scientific research, and disincentivizing investment in research.” It added: “Unfortunately, this would come at a time when the U.S. scientific enterprise already faces significant challenges from China, which has rapidly increased its funding for R&D in key technology sectors.”
2. Increased Administrative and Compliance Burdens
Organizations also highlighted how OMB’s proposal would create numerous administrative burdens, significantly raising costs for all sorts of federal grant recipients.
Institutions such as county governments, school districts, small-business startups, tribal groups, and other small local entities are least able to absorb the costs of additional administrative and compliance burdens, which could reduce participation in federal programs and slow delivery of services and innovation.
The School Superintendents Association noted, for example, that “The proposed change to require subrecipients to submit written justifications for every payment request will significantly increase administrative burden on school districts.”
The National Association of Counties, which represents county governments across the United States, stated that “The proposed rule expands subaward and contractor classification to reach transfers to related or affiliated entities, and extends E-Verify participation to every contractor and subcontractor regardless of award size or risk. These expanded monitoring and verification obligations would be especially burdensome for rural counties with limited grants staff.”
The American Bankers Association, which represents banks nationwide, raised concerns that the “proposed changes could increase the administrative burden associated with ‘Community Development Financial Institution Fund’ [a federal program designed to revitalize economically depressed communities] participation, particularly for smaller institutions with limited compliance resources.”
3. Questions About OMB’s Legal Authority to Implement the Revisions
Multiple organizations questioned whether OMB has the legal authority to make many of the substantive changes it is proposing, especially changes that would effectively create new funding conditions or override sector‑specific statutes and rulemaking processes.
The National Council of Nonprofits wrote that “OMB’s view appears to be that when Congress authorized OMB’s Deputy Director to ‘establish financial management policies and requirements’ in order to ‘[p]rovide overall direction and leadership to the executive branch on financial management matters,’ it authorized OMB to issue whatever rules it sees fit to control every aspect of grantmaking at every agency. This is very badly mistaken.”
4. Prioritizing Political Considerations over Scientific and Technical Merit
Under OMB’s proposal, political appointees at agencies rather than nonpartisan professional staff would be responsible for making final grant funding decisions and evaluating proposals based on vague, undefined standards that seek to prioritize the “national interest” and “Gold Standard Science.”
Many groups warned that relying on political appointees to make final grant award decisions while reducing the weight given to the opinions of subject-matter experts with scientific and/or technical expertise would reduce the return on investment from public investments in grants – especially those involving scientific research.
Many patient groups expressed concern that prioritizing political considerations over the scientific and technical quality of grant proposals would undermine the research enterprise and diminish the likelihood of developing new cures and treatments for diseases such as cancer, diabetes, Alzheimer's disease, and heart disease.
United for Cures, a patient advocacy group committed to protecting biomedical research, noted in a statement: “One surefire way to jeopardize the development of breakthrough cures and treatments for millions of American families who urgently need them is to put politics at the center of it. OMB’s proposal would delay grants that have already cleared rigorous evaluation and upend a merit-based, competitive process. 95% of Americans believe that the [United States] must maintain our global leadership in medical research – this proposal flies in direct opposition of that and would cost lives and American leadership.”
The American Cancer Society Cancer Action Network stated that applicants would be “faced with the challenge of how to pursue research deemed of interest by one administration while not being in jeopardy of cancellation by the next administration which may have different interests. Such a policy would stymie long-term federal research as researchers would have no way of predicting the political interests of future administrations.”
5. Sidelining of Civil Rights, First Amendment Rights, and Equity
Several letters argued that OMB’s proposal could infringe upon basic American rights by allowing the federal government to punish disfavored viewpoints and making award decisions contingent on alignment with broad, ideological criteria such as “the President’s policy priorities,” “national interest,” or “anti‑American values.”
Civil rights groups, such as the National Housing Law Project, noted that the “proposed rule conflicts with civil rights and affirmative marketing requirements that are explicitly authorized by Congress.”
The comments generally noted that the proposal would undermine health equity, representative clinical trials, education access, proven intervention programs, and disparate-impact studies (analyses that determine whether facially neutral policies, algorithms, or practices unintentionally cause disproportionately adverse outcomes for protected groups).
6. Need for Clearer Standards and Phased Implementation
Across sectors, organizations called for clearer definitions and criteria; preservation of formula and statutory program integrity; assessments of the proposal’s impacts on technology competitiveness and the broader innovation ecosystem; and realistic implementation timelines.
The National Association of State Auditors, Comptrollers and Treasurers cautioned that “Auditors may be required to judge whether costs align with agency objectives or broader policy considerations without objective criteria. This could result in inconsistent and subjective questioned-cost determinations and may cause auditors to question costs conservatively. OMB should provide objective criteria, examples, and clear Federal agency responsibility for evaluating policy-based allowability issues.”
They argued that any final rule should be evidence‑based; administrable; and accompanied by notice, documentation requirements, cure periods, appeal mechanisms, safe harbors, and phased or delayed implementation to avoid disruption.
The breadth and volume of comments from scientific societies, health and civil rights advocates, financial institutions, local governments, schools, nonprofits, and others indicates that OMB’s proposed changes to Uniform Guidance could have drastic negative effects across multiple sectors of American society. For this reason, it is critical that OMB carefully consider each comment letter submitted and make significant changes before implementing new rules.
Eyan Weissbluth is intern at AAU.