ADVOCACY & POLICY UPDATE - July 13, 2026

OMB Grant Rule Comments Deadline Today; House GOP Bills Target Education Department​

Appropriations

Congress continues to work on FY27 appropriations but did not make any major progress last week. The House Appropriations Committee has advanced several FY27 spending bills, while the Senate remains stalled in its appropriations process. With the August recess approaching and the September 30 funding deadline drawing closer, lawmakers will need to determine a path forward — either completing individual spending bills or pursuing a continuing resolution to avoid a lapse in federal funding.

OMB Proposed Grant Rule

The White House Office of Management and Budget (OMB) has received approximately 90,000 public comments on its proposed rule that would significantly revise federal grant administration. The proposal would give political appointees greater authority over discretionary grant awards, require funding opportunities to align with administration priorities, and expand the federal government's ability to terminate grants after they have been awarded. It would apply broadly across federal grant programs, including research, education, transportation, health, housing, infrastructure, and other discretionary funding. Among other changes, the proposal would require federal agencies to conduct additional reviews of discretionary grant awards, reduce the role of peer review recommendations in grant decisions, establish new requirements for grant eligibility and oversight, and allow agencies to terminate awards if they determine they no longer align with agency priorities or the national interest.

It also includes new restrictions on the use of federal grant funds, including limitations related to certain diversity, equity, and inclusion activities, international collaborations, publication costs, conference participation, and other grant-supported activities. The proposed rule would further establish a domestic-first framework for federal grants and require additional reviews of grant applicants and recipients. It has generated significant feedback from universities, scientific organizations, public health groups, local governments, and other stakeholders ahead of the July 13 public comment deadline. Critics of the proposal have raised concerns that the changes could increase political influence over grant decisions, reduce the role of expert review, create uncertainty for grant recipients, and affect federally supported research and community programs.

The U.S. Conference of Mayors (USCM) has prepared its own comments and is also coordinating with other national local government organizations on a joint response. Local government organizations have also begun coordinating responses to the proposal. The Public Rights Project is seeking local government participation in a coalition comment letter addressing the potential impacts of the rule on programs supported through federal grants, including healthcare, transportation, infrastructure, housing, education, and social services. 

On Monday, July 6, Senate Appropriations Committee Chair Susan Collins (ME) sent a letter to OMB Director Russell Vought requesting that the agency extend the public comment period by at least 90 days and reconsider provisions she identified as potentially affecting scientific and biomedical research, as well as small and rural communities.

The Administration has stated that the proposed rule is intended to increase accountability in the grant-making process, ensure federal funding aligns with administration priorities and the national interest, and strengthen oversight of taxpayer dollars. OMB has also said the changes are intended to establish consistent government-wide grant administration policies and address concerns regarding previous grant funding decisions.

Following the close of the public comment period, OMB will review submitted feedback before determining whether to revise and finalize the rule.

The deadline to submit public comments on the proposed rule is TODAY, July 13.

Click here to access the OMB proposed rule and submit public comments.

Click here to read USCM’s formal comments in opposition to the OMB rule.

Click here to access a NAWB toolkit to help prepare comments on the rule. 

Click here to access Senator Susan Collins’ letter to OMB Director Russell Vought.

Click here to access the Public Rights Project coalition comment letter and sign-on information for local governments.

Click here to access the Public Rights Project’s current working draft.

U.S. Department of Education

On Thursday, July 9, House Education and Workforce Committee Chair Tim Walberg (MI) introduced a package of 10 bills that would codify the Administration's efforts to dismantle the U.S. Department of Education (ED) by permanently transferring many of its responsibilities to other federal agencies.

The legislation would move federal student aid programs to the Treasury Department; transfer elementary and secondary education, higher education, and career, technical, and adult education programs to the Department of Labor; shift child care assistance for college students, foreign medical school accreditation, and family engagement programs to the Department of Health and Human Services; transfer international education programs and oversight of foreign gifts reporting to the Department of State; and move tribal education programs to the Department of the Interior. The bills would also make permanent several interagency agreements established following President Trump's March 2025 executive order directing Secretary of Education Linda McMahon to facilitate ED's closure. Because Congress must approve the permanent closure of ED, the legislation faces significant obstacles in the Senate, where it would require bipartisan support to advance.

Following the announcement, House Education and Workforce Committee Ranking Member Bobby Scott (VA) criticized the legislative package, arguing that transferring ED's functions to other federal agencies would reduce those agencies' ability to administer education and workforce programs effectively and could negatively affect education and workforce services. Republican supporters of the legislation argue the restructuring would reduce federal bureaucracy, improve efficiency, and place programs within agencies better suited to administer them.

Click here to access the full press release and more information on the 10 bills.

Click here to access the full fact sheet released by Ranking Member Bobby Scott.