Summary of Key Changes in OMB’s Proposed Federal Financial Assistance Rule

Russell Vought is going to destroy American Science

Federal Register, May 29, 2026 | Docket OMB-2026-0034 | Comment Deadline: ~July 13, 2026

https://www.federalregister.gov/public-inspection/2026-10817/regulation-for-federal-financial-assistance

1. Political Appointees Take Control of Grant Awards (§200.205)

This is arguably the most consequential change in the rule. Senior political appointees, rather than career scientists or program officers, would now be required to conduct a “pre-issuance review” of every discretionary grant before it is awarded. These appointees are explicitly forbidden from deferring to peer reviewers or routinely ratifying their recommendations.

The criteria they must apply include blocking awards that touch on denial of “the sex binary in humans,” illegal immigration, or anything deemed to “promote anti-American values.” The rule also requires that discretionary awards must:

“...demonstrably advance the President’s policy priorities.”

In practice, this gives political appointees a veto over any science that conflicts with the current administration’s ideology.

2. Peer Review Is No Longer Binding (§200.205(d))

The rule explicitly states that peer review recommendations “remain advisory and are not ministerially ratified, routinely deferred to, or otherwise treated as de facto binding.” This directly dismantles the post-WWII system used by NIH, NSF, DOE, NASA, and nearly every science agency, in which independent expert peer review was the primary measure of scientific merit. Under this rule, a political appointee can simply override the scientific community’s judgment with no finding of cause.

3. “Gold Standard Science” as an Undefined Political Test (§200.205)

The rule repeatedly invokes a concept called “Gold Standard Science,” tied to Executive Order 14303 of May 23, 2025, without defining it in any concrete or measurable way. Under the proposed requirements:

• All grants must include benchmarks for compliance with “Gold Standard Science”

• Agencies must prioritize institutions that have “demonstrated success in implementing Gold Standard Science”

• Institutional prestige and historical reputation are explicitly deprioritized in favor of compliance with this undefined standard

Because the standard is never defined, the administration retains broad, unguided discretion to favor or disfavor institutions based on their political alignment.

4. Active Grants Can Be Terminated at Any Time, for Any Reason (§200.340)

The rule codifies and expands the authority to terminate active grants mid-award simply because they are “inconsistent with program goals or agency priorities.” Agencies need only provide a brief written rationale; no finding of noncompliance or fraud is required. This retroactively threatens ongoing multi-year research that researchers and institutions have built programs around.

OMB frames this as analogous to the “termination for convenience” clause used in federal contracts, but grants are fundamentally different instruments. Researchers take on staff, make commitments to participants, and design years-long projects around the presumption that a funded grant will run its course.

5. DEI, Gender Research, and Related Topics Banned as Grant Conditions (§200.300)

All federal award funds are prohibited from being used to “fund, promote, encourage, subsidize, or facilitate” any of the following:

• DEI or DEIA policies or practices

• “Gender ideology,” defined as any theory that “denies the biological reality of sex or the sex binary”

• Any assistance with gender transition for individuals under 19

These restrictions are embedded as mandatory grant conditions across all agencies and all programs. A university or research institution that conducts such research, even with entirely separate, non-federal funds, could face grant termination if the activity is found to conflict with award conditions.

6. Broad Prohibition on International Scientific Collaboration (§200.220)

A new government-wide rule prohibits the use of any federal funds, including indirect costs, for bilateral or multilateral collaboration with “covered foreign countries” or entities affiliated with them. The rule extends beyond China to all countries designated under broad sanctions lists, and covers travel, research activities, technical assistance, and indirect costs allocable to any such collaboration.

While legitimate national security concerns exist with certain foreign entities, this provision is sweeping enough to severely disrupt international partnerships that have been foundational to U.S. leadership in fields from climate science and astrophysics to genomics and epidemiology.

7. “Domestic-First” Framework for Research Awards (§200.202(e))

A new domestic-first framework requires that any international element in a federally funded R&D grant be affirmatively justified on a case-by-case basis by agency officials. Foreign entities cannot receive R&D awards at all except with written approval from a senior political appointee. International collaboration, currently standard practice across many scientific disciplines, would become presumptively disfavored.

8. Applicants Can Be Denied Based on Organizational “Affiliations” (§200.206)

The risk factors agencies may use to deny a grant application are expanded to include an applicant’s membership in or affiliation with organizations that “advocate for the overthrow of the United States Government” or “undermine public safety or national security.” Given the preamble’s expansive framing of what constitutes anti-American activity, this language could be used to disqualify researchers affiliated with civil rights, environmental, or public health advocacy organizations.

9. E-Verify Mandated for All Grant Recipients (§200.303)

All recipients and subrecipients of federal awards must enroll in and use the DHS E-Verify system for every employee and contractor working on a federal award. Any Final Nonconfirmation must be reported to the federal agency. This adds significant administrative burden to universities and research institutions and could jeopardize grants at institutions employing researchers from abroad.

10. OMB Claims Direct Binding Authority Over All Agencies

The rule restructures 2 CFR to make OMB’s guidance a directly binding regulation on all agencies, effective government-wide on a single date. This removes the previous system under which individual agencies had meaningful flexibility in adopting OMB guidance. It also eliminates the ability of individual science agencies to shield their communities from any of these changes through their own implementing rules.

Conference Attendance and Related Costs

11. Conference Attendance Now Requires Express Agency Pre-Approval (§200.432)

Under current rules, conference attendance related to the scientific work of a grant is a standard, routine allowable cost. The proposed rule eliminates that presumption entirely. The new text states:

“The costs for attending conferences are allowable only if participation in the conference is expressly approved by the Federal agency and included in the terms and conditions of the Federal award.”

This means every conference a researcher wishes to attend using grant funds must be pre-approved by the agency and written into the award at the time it is made. Conferences not anticipated when the award was issued cannot easily be added later, and the agency has full discretion to deny approval or simply decline to include any conferences in the terms at all.

Conferences are where scientists present results, receive peer critique, discover new approaches, and build the collaborations that advance their fields. Giving political appointees gatekeeper authority over conference attendance is a direct tool for isolating researchers from their professional communities.

12. Professional Memberships Require Prior Approval and Must Be “Necessary” (§200.454)

The proposed rule makes three significant changes to allowable membership and subscription costs:

• Professional society memberships are only allowable if they are necessary to fulfill the award requirements and receive prior written agency approval

• Subscriptions to professional, academic, and technical journals are made categorically unallowable

• Memberships in organizations whose primary purpose is lobbying or issue advocacy are unallowable

The journal subscription ban deserves particular attention. Researchers routinely use grant funds to access the scientific literature that is foundational to their work. At institutions with constrained library budgets, this could make it genuinely difficult to conduct research.

13. Publication Costs and Open Access Fees Presumptively Unallowable (§200.461)

The rule proposes that all journal publication costs, including article processing charges, open access fees, and similar fees, are unallowable by default. Exceptions would require either a specific statutory mandate or case-by-case agency pre-approval. The proposed regulatory text reads:

“Publication costs (including page charges, article processing charges (APCs), or similar fees such as open access fees for professional journal publications and other peer-reviewed publications) are unallowable under Federal awards.”

This directly conflicts with longstanding federal open access mandates, including the 2022 OSTP memorandum requiring that federally funded research be made publicly available. Peer-reviewed publication is the mechanism by which science is validated and shared. Making it financially prohibitive for federally funded researchers to publish their findings would effectively suppress the scientific record.

14. Public Communications and Outreach Severely Restricted (§200.421)

All public relations costs are proposed as unallowable except those explicitly required by statute. This would restrict researchers from communicating findings to the public or press. Combined with the issue advocacy prohibition below, it adds another layer of control over how federally funded science reaches the public.

15. New “Issue Advocacy” Prohibition (§200.450)

Federal grant funds could not be used for:

• Any messaging that promotes or opposes a “particular social, political, or public policy position unrelated to the statutory objectives” of the award

• Voter registration activities

• Attempting to influence any state executive branch agency on matters outside the precise scope of the award

Given that the rule’s preamble characterizes climate science, public health research, and equity research as “divisive ideologies,” this prohibition could be deployed to bar researchers from speaking publicly about their own federally funded findings on politically sensitive subjects.

Notices of Funding Opportunities: New Restrictions and Controls

16. Program Goals Must “Align with Administration Policies and Priorities” (§200.202)

Every new federal grant program, including science programs, must now be designed with goals that explicitly align with administration policies and priorities. This requirement is embedded directly in the regulatory text governing program design, meaning science agencies must structure their grant solicitations around the current administration’s political agenda rather than solely around scientific need, statutory mandate, or the advice of the scientific community.

17. Agency Heads Can Exempt Grant Competitions from Public Notice (§200.204)

A new exception allows a federal agency head, or their designee, to approve an exemption from the requirement to publicly post a funding opportunity on Grants.gov when “publicly announcing an opportunity would pose a risk to national security or is in the national interest of the United States.” While narrow national security carve-outs for classified defense research are legitimate, this language is considerably broader. “National interest” is a phrase this administration has used expansively, and it could justify conducting entire grant competitions outside public view.

18. Agencies Can Restrict Eligibility to Specific Nonprofit Categories (§200.202(d))

Agencies can now explicitly restrict grant eligibility to specific IRS nonprofit categories, for example limiting eligibility to 501(c)(3) organizations while excluding 501(c)(4) organizations. This could be used to exclude advocacy-affiliated scientific organizations or civil society groups that conduct or fund research.

19. OMB Gains Direct Oversight of Which Institutions Receive Grants

A new provision allows OMB to require agencies to submit reports identifying the specific recipients of federal awards over any given period. Combined with OMB’s new authority to require political alignment in program design, this gives the White House direct oversight and leverage over which institutions receive federal research funding. That function has historically been insulated from political interference, and with good reason.

Bottom Line

Since World War II, the United States built the world’s preeminent scientific enterprise on a straightforward principle: federal dollars should fund the best science, as determined by independent experts rather than politicians. Peer review, open competition, and institutional autonomy were the pillars of that system. This proposed rule dismantles all three, simultaneously, government-wide, and binding on every federal agency by October 1, 2026.

What OMB is proposing is not a reform of grants management. It is a complete political control apparatus layered over every stage of the federal science funding lifecycle.

• Before a competition opens, every program must be designed to align with the President’s policy priorities, not scientific need, statutory mandate, or expert consensus.

• When opportunities are announced, agencies can restrict who is eligible, and the agency head can exempt solicitations from public posting under a broad national interest exception.

• When applications are reviewed, political appointees must personally evaluate every discretionary grant. Peer review is explicitly reduced to advisory status. Appointees are forbidden from deferring to scientific experts.

• When awards are made, grants can be conditioned on compliance with an undefined “Gold Standard Science” standard, and institutions can be disqualified based on their affiliations or the political character of their prior work.

• During the research itself, scientists cannot attend conferences, join professional societies, subscribe to journals, or publish in peer-reviewed journals without express agency pre-approval. Each of those approvals can simply be withheld.

• At any moment, an active grant, including a multi-year award already mid-project, can be terminated because a political appointee decides it no longer aligns with agency priorities. No finding of misconduct is required.

• When results are ready to share, publication costs are presumptively unallowable, and any public communication that could be labeled issue advocacy on a sensitive topic puts the entire award at risk.

The rule is also notable for what it cites as justification. The preamble relies heavily on Heritage Foundation reports, partisan Senate committee documents, and White House fact sheets, rather than independent scientific or administrative assessments. It characterizes decades of peer-reviewed research on climate, public health, equity, and international collaboration as “woke,” “neo-Marxist,” “anti-American,” or “divisive ideology.” It treats the scientific community’s professional infrastructure, including conferences, journals, international partnerships, and open access publishing, as wasteful overhead to be controlled or eliminated.

Congress has repeatedly appropriated funds for science agencies with the expectation that those funds would be administered through merit-based, expert-driven processes insulated from political interference. This rule attempts to override that expectation administratively, without new legislation, by repurposing OMB’s grants management authority as a vehicle for political control of science.

The public comment period closes approximately July 13, 2026 (45 days from May 29 publication). Comments must be submitted to regulations.gov, Docket OMB-2026-0034.

Scientists, universities, scientific societies, patient advocacy organizations, state governments, and members of the public all have standing to comment. Given the scope of what is proposed, the breadth and volume of opposition in the formal record will matter both legally and politically.