House Approves Bill Temporarily Blocking New Federal Grant Rule

House Approves Bill Temporarily Blocking New Federal Grant Rule

On September 1, the U.S. House of Representatives voted 370 to 48 to approve the Senate version of H.R. 6500. The bill has been sent to the president. Once enacted, §157 will prohibit the U.S. Office of Management and Budget (OMB) from issuing or finalizing its May rule on federal financial assistance until December 11.

Federal research grants already undergo several stages of review. At the U.S. National Institutes of Health, an application is first evaluated on scientific and technical grounds. An advisory council then determines whether the proposed project is consistent with the institute's mission.

On May 29, OMB proposed changes to the government-wide rules for federal grants. The new §200.205 would require an additional review before funds are awarded for every grant in which an agency selects the recipient. The agency head would assign this review to one or more senior appointees. They would determine whether the application complies with the law and aligns with the agency's priorities and the national interest. Where applicable, the grant would also have to explicitly advance the president's priorities.

The proposal retained peer review findings as recommendations, while requiring the appointees to exercise their own judgment when evaluating applications. The proposed rule states:

“Senior appointees or their designees must not merely rubber stamp or routinely defer to the recommendations of others, but must exercise their own judgment in evaluating applications for Federal funding.”

The mandatory review by appointees would create a separate stage between expert evaluation and the award of funds.

§157 specifically applies the prohibition to OMB's May notice and to substantially similar rules. It will take effect as soon as H.R. 6500 becomes law. The House has completed the process of reconciling the bill with the Senate, and the bill is now with the president.