US OMB Proposed Grant Rule Threatens Federal Research Funding

The Office of Management and Budget has issued a proposed regulation (Docket OMB-2026-0034) that would increase federal oversight of discretionary grant awards, inserting political review and limiting foreign collaboration. The rule would permit grant termination without a finding of non‑compliance and prohibit funding of activities labeled as “diversity, equity and inclusion” (DEI) or “gender ideology.”

The American Society for Microbiology (ASM) submitted formal comments, stating the rule “does the exact opposite on several fronts, and most of all by politicizing science,” and warning that it could undermine peer review, reduce the number of grants awarded, and jeopardize the pipeline of future scientists. Hospitals, research universities, and other entities that receive federal grants face new compliance requirements and heightened risk of investigations, repayment demands, or termination.

The comment period remains open until July 13, and the rule is slated to take effect on October 1 for FY27 awards, covering agencies such as the NIH, HRSA, and CDC.