OMB Proposes Rule Giving Political Appointees Veto Power Over $1 Trillion in Federal Research Grants

What the Rule Actually Says

On May 29, 2026, the Office of Management and Budget published a 412-page proposed revision to federal financial assistance rules. The document runs on bureaucratic language, but the core mechanism is straightforward: political appointees would gain authority to review and veto any federal grant, at any point, for any reason.

The proposal covers more than $1 trillion in grants across 42 federal agencies, including the National Institutes of Health, the National Science Foundation, the Department of Education, Veterans Affairs, and Housing and Urban Development.

All grant recipients would be required to align their work with "the President's policy priorities." Research involving DEI programming or what the document calls "gender ideology" would be disqualified. Scientists could not collaborate with colleagues in many foreign countries, could not attend conferences without preapproval, and could not use grant funds to publish their findings for public access.

For applicants who can't meet those conditions, the proposal says they are welcome to find funding elsewhere.

What's Actually at Stake

Federal grants pay for the bulk of scientific research conducted at American universities. That includes vaccine development, disease surveillance, natural hazard studies, cancer research, and basic science that underpins private-sector innovation years down the line.

Colette Delawalla, founder and CEO of Stand Up for Science, told The Verge that if the rule takes effect, science in the US "will stop. It won't exist anymore."

The mechanism is real. Granting a political appointee unconditional veto authority over any grant means no researcher can plan work, secure lab staff, or commit to multi-year studies with any confidence the funding survives a change in whoever holds the reviewing post.

The Strongest Argument for the Rule

The administration's stated rationale deserves a fair hearing. Conservatives have long argued, with some documented basis, that federal grant agencies have funded ideologically driven research with unclear public benefit, and that peer review within academia tends to favor projects aligned with prevailing progressive orthodoxy. The argument is that political accountability should exist over how taxpayer money is spent, since elected officials, not university grant committees, answer to voters.

Congress appropriates the money. Taxpayers fund it. The question of whether federal science agencies have operated without adequate accountability is a legitimate policy debate.

The specific mechanism in this proposal does not create accountability. It creates discretion. Unlimited, unreviewable, after-the-fact political veto power is not an audit system. It produces unpredictability rather than oversight. Delawalla put it directly: "Saying that the NIH or NSF or whoever has been funding neo-Marxist things, that's not evidence. That's not a reason. That's nonsense."

An accountability regime would set clear, public criteria for what grants qualify, apply them uniformly, and publish rejections with stated reasons. This proposal does none of that.

Who Gets Hit Beyond Scientists

The rule doesn't stop at university laboratories. It sweeps across agencies that touch ordinary Americans who have never heard of an NIH R01 grant.

Veterans Affairs receives federal financial assistance. So does housing. So do education programs. Community health centers, rural hospitals, and social services organizations that receive federal funding would all fall under the same political review requirement. According to The Verge's reporting, the rule's reach means every community in the country has exposure here, not just researchers with PhDs.

What Happens Next

The comment period closes July 13, 2026. Under administrative law, OMB must read and substantively address all public comments before finalizing a rule of this type, which means organized, detailed responses from affected institutions carry legal weight.

There is a second path. If Congress submits a formal objection, the rule could be blocked before it takes effect. That requires members of Congress to act, which is not guaranteed given the current political environment on Capitol Hill.

Neither path is fast or certain. Universities, hospital systems, scientific societies, and veterans organizations have roughly two weeks to file comments that put specific documented objections into the administrative record. Whether the volume and quality of those comments forces a meaningful revision, or whether the rule moves to finalization largely intact, remains unclear.