OMB’s Grantmaking Overhaul Threatens Health Care 

Federal grants support much of the health care system and programs that Americans rely on — a new proposed rule from the Office of Management and Budget (OMB) threatens to change how that funding system works by placing the whims of political appointees above the recommendations of scientists and experts.  

On May 29, the White House, through the Office of Management and Budget (OMB), proposed sweeping changes to the rulebook that governs nearly every aspect of federal grantmaking, known as “Uniform Guidance.” Families USA, along with hundreds of thousands of other commenters from research, academia, health care, and more submitted comments. The surprising level of interest in a somewhat obscure area of federal rulemaking is driven by the sweeping impact this rule would have on health care providers, community-based organizations, scientists, and health researchers and the communities they serve.  

The rule attempts to enshrine administrative activities that federal courts have already found illegal, such as making politically motivated grantmaking decisions. Where prior attempts to rescind federal grants on this basis were blocked by the courts, this rule attempts to pave the way through rulemaking. If finalized, the rule would politicize the grantmaking process, allowing agencies to bring ideological preferences directly into scientific and funding decisions that have long been guided by subject matter expertise. The communities, patients, workers, and businesses who depend on this funding will all pay a heavy price.   

What Advocates Need to Know

This proposed rule would impact roughly $1.1 trillion in federal funding every year, spread across more than 40 agencies. If finalized, this rule would fundamentally reshape the discretionary grant funding landscape, with wide-reaching effects in medical schools, health research institutions, and the wider health care system. Drastic changes obliterate the current structure impacting who can apply for federal grants, how applications are reviewed, what goals grants can serve, and how or when the federal government can unilaterally terminate funding that has already been awarded. 

The Trump administration argues the rule will improve transparency, reduce burden on grant recipients and cut wasteful spending. In reality, it replaces clear standards with vague ones, hands agencies and political appointees more discretion with less accountability and has potential to upend life-changing cancer research and the development of new and innovative treatments for people who desperately need them for conditions like diabetes or asthma.  

This rule does not threaten future research alone; it impacts care in real time. Provisions that put restrictions on DEI, gender-related care, and abortion funding affect ongoing direct-care programs such as reproductive health clinics, HIV care providers, and community health centers. Further, the Trump administration is imposing new constraints to “fix” problems that don’t exist.  

For example, the Hyde Amendment has already restricted federal abortion funding for half a century, through a targeted, program-specific appropriations rider that Congress enacts every year, and that courts and agencies understand how to implement. The proposed rule further complicates that structure by imposing a government-wide ban on funding for undefined “costs associated with” elective abortion — language with no established scope, no legislative history, and no exceptions to the process. 

The ambiguity is a double-edged sword affecting not only future applications but existing grant cycles. While grant applicants may amend their research to secure funding (or abandon certain elements altogether) current grantees will be forced to err on the side of extreme caution, cutting back or eliminating lawful services rather than risk their entire federal funding stream over an undefined violation. We will likely see entire service lines discontinued to advance political priorities in other funding areas. 

This type of administrative activity is currently playing out in real time. Just last month at least 67 grants administered through the Agency for Healthcare Research and Quality (AHRQ) at the Department of Health and Human Services (HHS) were abruptly terminated. Though the stated justification was a need to “better prioritize agency resources,” several of the terminated grants appear to fall squarely within agency-stated priorities. For example, these grants supported a range of important research on patient safety, substance abuse treatment, and preventing medical debt. 

When grants aligned with an agency’s own articulated goals can be cancelled without explanation, the stated criteria offer hollow assurance to grantees. Experts and officials are now concerned that grant funding and termination decisions are being made on some other, undisclosed criteria — precisely the kind of opaque, standardless discretion this proposed rule would codify and expand. 

The Value of the Health Care Consumer Advocate Voice  

While much of the attention related to this issue has focused on funding and the dangers of political interference, the threat to health care consumers is real. Federal grants sustain programs and services at the heart of our health care system, and their loss would harm patients today and for years to come. Changes of this magnitude could alter the basis of scientific research for decades, the ripple effects of which could be devastating to consumers across all walks of life. Given the enormity of what’s at stake, the health care advocacy community has a duty to meet this moment.  

Health care organizations and advocates are best positioned to elucidate losses in continued access to care and coverage, especially for low-income and rural communities that already face high barriers to care. Evidence-based federal funding is the mechanism by which we hold the health care system accountable to ensure that lifesaving care reaches the people and communities that need it most. Without health care advocates speaking up on the impacts to clinics, hospitals, community health centers and providers, the framing provided by the OMB is left without a counterweight.  

Delay, Delay, Delay 

Opposition to the rule spans communities and interest groups, and across political parties. Key senate offices have expressed frustration with the rule, and all 47 Senate Democrats — led by Senators Schumer, Peters, Murray, and Merkley — sent a detailed letter to OMB Director Vought calling the rule an unlawful “grantmaking power grab,” citing two federal court rulings that have already rejected OMB’s claimed authority to unilaterally halt agency funding. The proposed Senate continuing resolution (CR) released on August 2 to keep the government funded through December 11 includes language that would block OMB from implementing the grants rule for the duration of the CR — a direct result of Senate Democrats’ pressure.  The implementation delay would expire in December, but this is still a real, if temporary, win.  

While the comment period ended July 13, health care advocates have an opportunity to press Congress to ensure this rule is not finalized. Your voice and outreach have worked before — the public outcry and calls to Congress led the administration to reverse course on their attempt to cancel nearly 2,000 SAMHSA grants in December.  

Now is the moment to contact your members of Congress to support the provision in the CR and delay implementation of the proposed rule. The Senate could vote on this measure as soon as this week, which means call, text, email your senators TODAY and tell them to stop this dangerous OMB proposed rule and support the CR provision to delay it. When the House of Representatives comes back in September they are likely to take up the measure as well, so ongoing calls and pressure on the House is critical too.  

While ongoing advocacy to permanently stop the OMB rule remains important, advocates should focus their energy now on pushing for a delay in implementation. That’s why we’re calling on health advocates to join Families USA in acting now to urge Congress to support this delay and help us keep up the fight to stop this dangerous rule from ever taking effect.