This new OMB Rule Is Bigger Than Science. Much Bigger.

This image was generated by Google AI (Gemini)

When I published my summary of OMB’s proposed Federal Financial Assistance rule last week, I was writing from my lane. I spent 22 years as an NIH Program Official overseeing federally funded science. I know firsthand how real and severe that damage to science funding would be, and it deserved to be named clearly.

I want to widen the lens now, because the more I have dug into this rule, the more I realize that scientists are not the only ones who should be alarmed. Not even close.

2 CFR Part 200, the regulation being rewritten here, is not the science grants regulation. It is the universal legal framework governing every federal grant to every recipient across every agency in the federal government. When OMB rewrites it, they are rewriting the rules for all of it.

According to the Congressional Research Service, in FY2024 the federal government sent $1.1 trillion in grants to state and local governments. That money is what funds:

• Medicaid — more than $600 billion, with the federal government covering between 50 and 77 cents of every dollar states spend on health care for their most vulnerable residents

• Transportation — $95 billion for highways, bridges, transit systems, airports, and ports

• Education — $65 billion for Title I schools, special education, Head Start, and workforce training

• Food assistance — $51 billion

• and much more

Every single one of those programs operates under 2 CFR Part 200. Every one of them is now subject to the same provisions I described last week.

Consider what that means in practice. Political appointees who can override expert judgment and block science grants that don’t advance the President’s priorities would have that same power over transportation awards, and housing funds, not just NIH applications. Any active grant could be canceled mid-project because it no longer serves ‘the national interest.’ A highway already under construction. A tribal health program mid-delivery. A city still rebuilding from a flood. And every new grant program must align with administration priorities before a single application is even solicited. Entire categories of funding can be quietly discontinued without a public announcement or a vote.

Federal grants are not peripheral to how states and communities function. They represent, on average, 36 cents of every dollar a state spends. This rule puts that entire financial partnership between the federal government and the states under political control, without an act of Congress, effective October 1, 2026.

A scientist reading my last post understood immediately why they should be worried. These professionals should also be concerned:

• The county engineer overseeing a federally funded bridge.

• The housing authority director managing Section 8 vouchers.

• The rural hospital administrator whose Medicaid reimbursements depend on stable federal grant terms.

• The Head Start center manager operating preschools with teachers hired, children enrolled, and parents depending on them for the childcare that lets them go to work.

• The school principal whose Title I funding supports her lowest-income students.

This rule touches all of them.

If you found my original post worth sharing, I hope you will share this one too, especially with people outside the scientific community who may not yet know this is coming. The comment period is open now and closes July 13, 2026.

Submit your comment in opposition here: https://www.regulations.gov/document/OMB-2026-0034-0001

You do not need to be an expert. You need to describe, in your own words, how your community, your program, your state, or your work depends on stable, merit-based federal grants and what it would mean to lose that. Cite the specific section that would hurt your community.

Below I have compiled the specific provisions that should concern people outside the scientific community, organized by who they affect most. Pick one or two that apply to your situation and cite them in your comment.

For State & Local Governments and Communities

§200.340 — Discretionary Termination is the one that should keep every state and local budget director awake at night. This is the provision that allows any active federal grant to be canceled mid-project because a political appointee decides it no longer serves the national interest.

§200.202 — Program Goals Must Align with Administration Priorities is the second most important for states, because it operates upstream of everything else. Before a state can even apply for a grant, the federal program must be designed to align with the President’s policy priorities.

§200.204 — Grant Competitions Can Be Hidden from Public View compounds the §200.202 problem. If agencies can exempt funding opportunities from public posting on Grants.gov under a broad national interest exception, states may not even know a competition exists until it is over.

§200.205 — Political Appointee Pre-Issuance Review is particularly alarming for local governments and community organizations because it inserts a political filter between a competitive application and an award decision. A local housing authority, a tribal nation, or a rural health clinic that wins on the merits can still be denied, with no appeal right and no requirement to explain why.

§200.206 — Denial Based on Organizational Affiliations is one that community-based organizations need to flag urgently. The language is broad enough to disqualify civil rights groups, environmental advocacy organizations, public health nonprofits, and community organizing entities. Given how expansively the rule’s preamble defines “anti-American activity,” this provision threatens the civic infrastructure that delivers many federally funded community services.

For Healthcare and Social Service Providers

§200.300 — DEI and Related Prohibitions is the most urgent provision for healthcare and social service organizations. The prohibition on using federal funds to promote or facilitate “DEI practices,” “gender ideology,” or related activities is embedded as a mandatory grant condition across all agencies and all programs. For Medicaid-funded health systems, community health centers, and social service agencies, this creates an impossible conflict: the populations these organizations serve are, by definition, the ones equity-focused programs are designed to reach. And because the rule never defines what counts as a prohibited DEI practice, providers face open-ended liability for ordinary program activities.

§200.218 — Disparate Impact Research and Programming Banned is a completely new provision, with no current counterpart in the regulations. It prohibits federal grant funds from supporting disparate-impact studies, disparate-impact litigation, and any program design based on “the assumed risk of disparate-impact liability.” Disparate-impact analysis is a foundational tool of civil rights law, public health research, environmental justice, housing policy, and labor economics. Banning its use in federally funded work would gut decades of evidence-based policy research.

§200.340 — Discretionary Termination applies here too, with particular cruelty. A community health center mid-way through a three-year federally funded program serving patients with chronic disease, a behavioral health organization running a longitudinal treatment study, a food bank administering a multi-year USDA nutrition program—all are now exposed to termination with only a brief written rationale required and no meaningful appeal right.

For Education Providers

§200.300 — DEI Prohibitions applied to Title I, IDEA, Head Start, and workforce training grants creates a direct conflict with the statutory purpose of those programs. Title I exists to direct resources to high-poverty schools. IDEA exists to ensure children with disabilities receive appropriate services. Characterizing equity-focused programming as an unallowable DEI activity inverts the entire purpose of the statutes Congress passed to create those programs.

§200.205 — Political Appointee Review applied to education grants means that competitive federal education awards, including those for curriculum development, teacher training, and educational research, pass through a political screen that has nothing to do with educational quality or student outcomes.

§200.450 — Issue Advocacy Prohibition is particularly significant for education providers because it could restrict grantees from communicating findings, advocating for students before state agencies, or engaging in routine community education work.

How to write an effective Comment. Make it completely unique! Do not cut and paste.

1: Say who you are and why you are qualified to comment. You do not need credentials. Being affected is enough, and simply being a concerned citizen is perfectly fine.

2: List the exact provision #s [PICK ONE or TWO FROM LIST ABOVE] that concern you, and explain what they would do. You do not need to quote the rule directly. Just explain what you understand it to mean in plain terms.

3: Explain the concrete harm. What would happen to you, your community, or your state if this provision takes effect?

4: Closing: State clearly what you want OMB to do. This can be as simple as: “I urge OMB to withdraw these specific provisions: §200.340, §200.202, §200.205.” or “I urge OMB not to finalize this rule.”

Submit your comment in opposition here: https://www.regulations.gov/document/OMB-2026-0034-0001 The deadline is July 13, 2026.