The League joined coalition partners in urging Congress to completely reject a regulation by the Office of Management and Budget that would change the way federal grants are managed and distributed.
October 26, 2026
Re: Preserve and extend Section 157 to stop OMB’s politicization of federal grants
Dear Speaker Johnson, Leaders Thune, Schumer, and Jeffries, Chair Collins, Vice Chair Murray, Chairman Cole, and Ranking Member DeLauro:
The undersigned organizations urge Congress to preserve and extend Section 157 of the Continuing Appropriations and Extensions Act, 2027 in every subsequent fiscal year 2027 funding measure, and to prevent the Office of Management and Budget (OMB) from issuing, finalizing, implementing, or enforcing its proposed Regulation for Federal Financial Assistance or any substantially similar rule.
Section 157 temporarily bars OMB from issuing or finalizing the proposed rule through December 11. Unless Congress acts again, that protection will lapse, leaving OMB free to revive a government-wide overhaul of federal grantmaking that would let political appointees award funds based on partisan alignment rather than scientific merit or need.
The rule intrudes on Congress’s power of the purse
The Constitution gives Congress the power to decide what public funds support, and the executive branch must administer appropriations consistent with Congress's purposes.
OMB's proposal would let executive officials withhold, redirect, or terminate congressionally authorized support based on the President's agenda, even where Congress required awards to rest on peer review, scientific evidence, or specific statutory criteria. The general financial-management statute OMB relies on, 31 U.S.C. § 503(a)(2), does not clearly authorize government-wide ideological conditions or override program-specific laws. The proposal also raises serious Administrative Procedure Act and First Amendment concerns. Its vague criteria and opaque review process undercut OMB's own stated goals of transparency, uniformity, and reduced recipient burden. It fails to account for recipients' reliance interests in programs built under the existing peer-review system. And it gives officials broad discretion to reward favored viewpoints and penalize disfavored ones.
The rule favors political priorities over peer review
The OMB Proposed Rule, if finalized, would require senior political appointees to review discretionary awards before issuance using their “independent judgment,” reduce peer-review recommendations to an advisory role that may not be routinely deferred to, and direct officials to consider whether awards “demonstrably advance the President’s policy priorities.” Independent peer review is a core safeguard for assessing quality, rigor, feasibility, and public benefit, and political directives are not a substitute for the expertise of scientists, clinicians, engineers, and other specialists. Because the proposal revises the government-wide Uniform Guidance, it would reach nearly every sector that relies on federal assistance, including medical research, public health, environmental protection, disaster preparedness, education, infrastructure, veterans’ services, and state, local, Tribal, and nonprofit programs.
The rule invites censorship
The proposal would condition funding on vague, politically charged standards, such as alignment with the President's priorities or activities political appointees deem contrary to the "national interest," "public safety," or "anti-American values," and would restrict funding tied to disfavored subjects such as gender identity and DEI. Since these standards are left to the appointee's discretion, every issue is at risk if the appointee deems it inconvenient. Any topic could lose support, whether it be work on climate science, vaccine safety, racial equity and DEI, reproductive and LGBTQ+ health, health disparities, and the unequal effects of pollution, because its subject or results are currently politically inconvenient. That censorship would cause lasting damage that would outlast any administration: interrupted studies lose participants and data, labs close, early-career researchers leave the field, and community partnerships dissolve. It also sets a precedent for future administrations to mandate similar restrictions on different topics.
The rule destabilizes awards
The proposal would expand agencies’ asserted power to suspend or terminate awards that officials decide no longer serve program goals, agency priorities, or the national interest, and would let agencies judge applicants on a “history of questionable practices” and their organizational affiliations. Recipients that hire staff, enroll study participants, sign
contracts, and build multiyear programs in reliance on federal awards could face termination despite satisfactory performance. Recipients that have built long-term projects relying on federal awards, such as Tribal Nations, state and local governments, universities, hospitals, community health centers, and small nonprofits with limited administrative capacity, would be especially vulnerable.
Congress must act
Section 157 passed with overwhelming bipartisan support: the Senate approved the amended measure 90–6, and the House agreed 370–48 before it became Public Law 119-
103. Congress should not let this safeguard lapse. We urge Congress to:
- Preserve and extend Section 157 in any subsequent continuing resolution, omnibus, minibus, or full-yearFY2027 appropriations legislation.
- Strengthen the provision to bar the use of funds to develop, issue, finalize, implement, administer, or enforce the proposed rule or any substantially similar policy, guidance, directive, or agency-level workaround.
- Protect independent, peer-reviewed grantmaking and prohibit political appointees from overriding merit recommendations on partisan or ideological grounds.
- Preserve all statutory requirements governing grant selection, scientific integrity, nondiscrimination, and the purposes for which Congress appropriated funds.
- Hold oversight hearings on OMB’s authority, the proposal’s effects on recipients and communities, and the legal concerns raised in public comments before allowing any government-wide restructuring of federal financial assistance.
Federal financial assistance should serve the purposes that Congress enacted and the public interest, not the political interests of any administration. We urge you to reserve and extend Section157 and keep OMB’s proposal from taking effect.