Congress Approves Delay of OMB Grant Overhaul
Congress has approved a continuing resolution that would temporarily block the Office of Management and Budget (OMB) from implementing its proposed overhaul of federal grant administration.
The U.S. House approved the Senate-amended version of H.R. 6500 on September 1 by a bipartisan vote of 370–48. The Senate previously passed the measure 90–6. The legislation will fund federal agencies at current levels through December 11.
The White House has formally supported the CR and recommended that the President sign it. Although congressional passage alone does not make the bill effective, the overwhelming votes in both chambers would also be sufficient to override a veto. Enactment of the measure—and the grant-rule delay—is therefore considered highly likely.
What the proposal would change
OMB’s proposed Regulation for Federal Financial Assistance would revise government-wide requirements for grants and cooperative agreements. Among other provisions, it would:
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Give senior political appointees a larger role in reviewing awards.
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Require closer alignment between grants and administration priorities.
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Expand agencies’ authority to terminate existing awards.
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Add new approval, payment and documentation requirements.
OMB says the changes would improve transparency, oversight and accountability. Universities, scientific organizations and patient advocates argue that the proposal could politicize scientific review, create uncertainty for multiyear research and make previously approved grants more vulnerable to cancellation.
The proposal generated an unusually large public response. OMB received 496,769 comments during the 45-day comment period. A STAT analysis conducted with researchers at the University of North Carolina at Chapel Hill classified approximately 95% of the comments then available for review as opposed and about 1% as supportive. Political control of grant decisions was the leading concern, followed by objections to making scientific peer review advisory rather than determinative. Roll Call also reported objections from medical researchers, universities, nonprofits and state and local grant recipients, including questions about OMB’s authority to impose the changes.
If the CR becomes law, OMB would be unable to issue or finalize the rule through December 11. The agency had intended the changes to take effect October 1, at the beginning of fiscal year 2027.
A temporary, but potentially consequential, pause
For universities, research institutions, nonprofits and companies managing federal awards, the delay would preserve existing grant-administration rules during the CR. It would also give OMB more time to review public comments and Congress another opportunity to address the issue through full-year appropriations.
The midterm elections add another layer of uncertainty. Voters will determine control of the House and Senate in November, and a change in either chamber could produce a Congress more willing to challenge the OMB proposal through legislation, appropriations restrictions and oversight.
Even without a change in party control, the lopsided votes for the CR suggest substantial bipartisan willingness to postpone the overhaul. Scientific and higher-education organizations will likely press lawmakers to extend the restriction or make it permanent when Congress negotiates final fiscal year 2027 funding.
The CR does not withdraw the proposed rule, guarantee the timing of individual awards or resolve concerns about current agency-level grant reviews. The outgoing Congress may also act on full-year funding before newly elected lawmakers take office. For now, however, the October 1 implementation date is unlikely to stand.
MichBio welcomes the additional time to evaluate the proposal’s implications for biomedical research, universities and emerging life sciences companies. We will continue working with BIO and Michigan stakeholders to support a grant system that is transparent and accountable while protecting scientific merit, peer review and predictable research funding.
