States, universities push for more time on OMB grant rewrite before July 13

A coalition of state and local government groups, universities and Senate Democrats is pressing the Office of Management and Budget over a proposed rewrite of federal grant rules before the July 13 comment deadline. The rule is still only proposed, but it would affect how federal financial assistance is awarded, monitored and in some cases terminated across agencies.

What OMB proposed

OMB published the proposal on May 29 and says it is trying to improve transparency, accountability and oversight, clarify the regulatory status of the governmentwide grant rules and reduce recipient burden. The agency also says it wants a final rule effective by October 1, 2026, so one set of governmentwide requirements applies to fiscal 2027 awards.

The rewrite would update the Uniform Guidance at 2 CFR Part 200 and make conforming changes for participating grantmaking agencies. AP reported that the plan would give senior appointees more power over grant decisions, while OMB says it is restoring clarity and consistency.

Why the pushback is growing

NCSL and other state and local government groups asked for a 45-day extension, saying the current window is too short for a rule of this size. AAU asked for at least 90 days and said the proposal includes more than 120 revisions.

On July 2, all Senate Democrats urged OMB to rescind the proposal, arguing it would expand political control over grant decisions and make it easier to suspend or terminate awards. Federal News Network reported the lawmakers also asked whether OMB would extend the comment period.

Why readers should care

Federal grant rules touch research universities, state agencies, nonprofits and local governments that use those dollars for public health, transportation, housing, workforce work and emergency response. If the rule is finalized largely as written, it could change how quickly money moves and how much discretion agencies have over existing and future awards.

For now, July 13 is still the key date. The Federal Register notice says late comments will be considered only to the extent practicable.

Sources

• Federal Register proposed rule: Regulation for Federal Financial Assistance
• U.S. Senate Appropriations Committee minority release on OMB grants rewrite
• National Conference of State Legislatures extension request
• Association of American Universities comment-extension request
• Federal News Network report on July 2 pushback