The Office of Management and Budget on Friday proposed a rewrite of the federal grant rulebook that would require senior appointees to review all discretionary awards before they are issued. The 400-plus page proposal updates 2 CFR 200 for the second time in two years and would give political appointees a direct role in a process that agencies have largely handled through career staff.
That is why grant offices, research institutions and recipients are reading the trump administration federal grant oversight proposal now. OMB said comments are due by July 13, and the draft implements many of the changes President Donald Trump outlined in his August executive order, Improving Oversight of Federal Grantmaking.
OMB said the revisions are meant to improve transparency and accountability, uphold basic American principles of equality and equal opportunity, prevent unlawful discrimination and reduce recipient burden. The agency also said the changes would clarify the regulatory status of its requirements and the process for future updates to governmentwide grant rules. Federal grant-making agencies would be expected to propose conforming changes to their own adopting regulations.
The practical change sits in one sentence inside the proposal: federal agency heads must designate one or more senior appointees to conduct a pre-issuance review of all discretionary awards. Dan Ramish said that may raise concern about senior appointees being involved in discretionary awards, because the new layer puts more political judgment between a grant decision and the moment the money goes out the door.
That is also where the administration’s pitch and its critics’ reading part ways. OMB says the rewrite removes DEI concepts and bars agencies from applying DEI or other identity-based ideas to grants, while the Trump administration argues that Biden-era grantmaking leaned too heavily on diversity, equity and inclusion and other woke ideals. The 2024 update moved in the opposite direction, focusing on plain English and better access for underserved communities, so the new proposal marks a sharp turn in how Washington wants federal awards reviewed and explained.
The question now is not whether the rule would change grantmaking. It would. The open question is how much room senior appointees would actually have once the review begins, and whether the final version keeps the same broad political oversight or pulls that back before the comment period closes on July 13.
