Trump proposal will turn federal grants into a system of political favors, Democrats warn

WASHINGTON — Democrats in Congress are pushing back against a proposed Trump administration rule introduced by the Office of Management and Budget that would substantially change the way federal grants are reviewed and distributed.

Over the past few weeks, several groups of lawmakers have written public comment letters to Office of Management and Budget Director Russ Vought expressing strong opposition to the new draft rule, which would give political appointees the power to decide what institutions receive grant funding, among other revisions. 

A summary of the rule cites the Biden administration as to why it is needed. “Federal awards were often used during those years to promote a ‘woke’ policy agenda that did not reflect the values of the vast majority of the American public,” it says, pointing to diversity, equity and inclusion, or DEI, policies.

Democrats said the proposal exceeds the office’s authority, will make it harder for grant recipients to carry out funding priorities established by Congress and would turn federal grants into a tool for President Donald Trump to “unilaterally advance his partisan agenda and punish political rivals.” 

The draft rule would allow Trump to “terminate or suspend any grant at any time for any reason and without any notice,” they said.

“Ultimately, these changes will make it harder for grant recipients to apply for and manage federal funds – undermining public safety, public health, economic competitiveness, and the government’s ability to address rising costs,” wrote Senate Minority Leader Chuck Schumer of New York and the entire Senate Democratic Caucus in their July 1 letter to Vought. 

Maryland Democrats in Congress and members of the Congressional Community Safety Caucus, led by Reps. Summer Lee of Pennsylvania, LaMonica McIver of New Jersey and Gabe Amo of Rhode Island, also wrote letters urging OMB to rescind its proposed new rule. 

Hundreds of billions in funds affected

The more than 100-page draft rule, published in collaboration with 41 other federal grant-making agencies on May 29 and titled “Regulation for Federal Financial Assistance,” would change the framework used to evaluate grant applications as well as guidelines for cost sharing.

It would potentially affect hundreds of billions of dollars in federal funding at universities, nonprofit organizations and other U.S. institutions, according to SciLine, an independent nonprofit service for journalists and scientists run out of the American Association for the Advancement of Science.

Under the proposed rule, federal grants could not be used to “fund, promote, encourage, subsidize, or facilitate” DEI initiatives. 

Awards would also in many cases have to “demonstrably advance the President’s policy priorities,” and agencies would be allowed to cancel funding that is “not effective at achieving program goals or Federal agency priorities” or “no longer in the Federal Government’s interest.” 

“The overarching goal of OMB’s proposed revisions is to improve transparency, accountability, and oversight for how Federal taxpayer dollars are used in the context of Federal grantmaking,” according to the executive summary of the rule.

OMB officials say they could implement the new draft rule as early as Oct. 1. 

Community violence intervention programs 

During the public comment period for the draft rule, which ran from May 29 to July 13, congressional Democrats slammed its vague language and the implications it holds for many institutions that rely on federal funds. 

Maryland’s senators and Democratic representatives in their July 10 letter to Vought denounced the rule for changing a process traditionally based on merit. “The federal grantmaking process includes essential, non-political guardrails that this rule seeks to eviscerate,” they wrote.

They also said the proposed rule contains a slew of new undefined standards for grants, including that they must adhere to “gold standard science” and cannot reflect “anti-American values,” that recipients may not be able to understand or comply with. 

Maryland institutions, often known as hubs for scientific research and innovation, have been hit hard by National Institutes of Health funding cuts and mass federal layoffs since Trump began his second term in 2025. Local governments and schools that receive federal funds have also taken blows, as has the state’s overall economy. 

In their July 13 letter, members of the Congressional Community Safety Caucus voiced concerns over how the draft rule could specifically affect community violence intervention programs. 

Community violence intervention programs, local efforts that have been linked to drops in violent crime rates in cities across the country, rely on federal grants for “state and local government investments, hospital partnerships, philanthropy, and research support,” according to the lawmakers’ letter.

The new draft rule, they wrote, would jeopardize the operation of these programs by allowing Trump administration officials to “withhold, suspend, or terminate grants, or change terms and conditions mid-implementation, forcing grantees to operate in a tumultuous environment.” 

The administration has already made cuts to parts of the Office of Justice Programs, further limiting the funds available to community violence intervention programs.

Other responses 

Though opposition to the proposed rule is mainly coming from Democratic lawmakers, some bipartisan criticism regarding the rule’s broad scope and fast timeline exists. 

Sen. Susan Collins, a Maine Republican, on July 6 asked Vought to extend the proposal’s public comment period at least 90 days and “withdraw portions of the rule that would potentially harm small and rural communities and scientific and biomedical research.”

“While I agree these principles should guide the administration and oversight of Federal funds, the rule would impose new, burdensome requirements on award recipients … and conflict with Congress’ control over the federal funding process,” she wrote.  

OMB did not respond to States Newsroom’s request for comment on lawmaker pushback to the proposed rule. But Vought took to social media last month to express his view of the opposition. 

“The freakout by those on the Left subsidized by taxpayer funds over OMB’s update of the regulation governing federal grant making tells you how important it is to keep the bureaucracies from leaking out spending that is woke, wasteful, and contra to the policies of the Trump Administration thru the NGOs,” he wrote. 

This story is republished from the Ohio Capital Journal under a Creative Commons license. View the original article.