Proposed Changes to Federal Grant Rules – Implications for Public Health

Proposed Changes to Federal Grant Rules - Implications for Public Health

Proposed Changes to Federal Grant Rules - Implications for Public Health

On May 29, 2026, the U.S. Office of Management and Budget (OMB), in coordination with all federal grantmaking agencies, published a proposed rule in the Federal Register rewriting 2 Code of Federal Regulations (CFR) Part 200. The proposed rule, which spans 412 pages, is the most comprehensive revision to the Uniform Guidance since its initial publication in 2013. These rules are proposed to take effect October 1, 2026.

What OMB says: According to OMB, the proposed revisions are intended to improve transparency, accountability, and oversight for awards across the federal government, while also reducing the burden on recipients. OMB indicates the proposed regulatory changes are to: (1) improve transparency, accountability, and oversight for use of federal taxpayer dollars; (2) clarify the status of OMB's policies and requirements set forth in the 2 CFR regulatory text as an OMB regulation; and (3) reduce recipient burden.

What the rule states: The proposed rule seeks to incorporate the administration's policy priorities in the federal awards process by making sweeping changes to the Uniform Guidance including, but not limited to:

• Providing federal agencies the authority to suspend or terminate discretionary grant awards at any time without cause, including when an award is determined to no longer align with "agency priorities or the national interest."
• Expanding the authority of agency political appointees in reviewing and approving all grant funding decisions.
• Narrowing the practical role of peer reviewers in final funding determinations to advisory only.
• Introducing new restrictions on international collaboration in federally funded research.
• Placing new limits on certain categories of allowable costs, including conference participation, professional membership dues, and publication-related expenses.
• Prohibiting the use of funds for initiatives which would be deemed to facilitate DEI, gender ideology, and gender transition; and to promote or support the use of disparate-impact liability.
• Requiring evaluation of an applicant's organizational affiliations-including examining whether affiliates engage in activities that would "undermine national security, violate federal law, or lack compliance with Section 117 of the Higher Education Act."
• Extending E-Verify requirements to all recipients and subrecipients of federal financial assistance. This means organizations receiving federal awards must confirm the immigration status of employees and contractors working on those awards.

What this means: This rulemaking will affect every single one of the federal grant programs that operate under the requirements of 2 CFR Part 200 (the Uniform Guidance). The Congressional Research Service reports that in FY2024 the federal government sent $1.1 trillion in grants to state and local governments. That money funds in part:

• Medicaid - more than $600 billion, with the federal government covering between 50 and 77 cents of every dollar states spend on health care for their most vulnerable residents
• Transportation - $95 billion for highways, bridges, transit systems, airports, and ports
• Education - $65 billion for Title I schools, special education, Head Start, and workforce training
• Food assistance - $51 billion

Federal grants to states and communities represent, on average, 36 cents of every dollar a state spends. In Illinois, federal grants account for roughly 23 to 32 cents of every dollar the state government brings in, representing about 32% of the total state revenue. This proposed rule puts that entire financial partnership between the federal government and the states under political control, without an act of Congress.

Read the full proposed rule here https://www.federalregister.gov/public-inspection/2026-10817/regulation-for-federal-financial-assistance

Read IPHA's full Action Alert about the proposed rule here.

Read IPHA's analysis of key provisions of proposed rule here.

Submit comments opposing these rule changes

Because this is a proposed rule and is not yet adopted, there is time for all of us, either in our professional roles, or as private individuals, to submit a written comment to indicate our opposition. You don't need to receive grant funds, be a public health professional, or have credentials to comment on this proposed rule. Simply being a concerned individual is enough.

Take these steps before the comment period ends on July 13, 2026:

• Submit plain language comments on behalf of yourself or your organization, about the potential impacts of this proposed rule.
• Collaborate with other organizations, the local chamber of commerce, a university, or community-based organization to collect stories and join "sign on" opportunities. IPHA will share these opportunities as we become aware of them.
• Share this information with other organizations and people who may not know about this proposed rule and encourage them to comment also.
• Reach out to your members of Congress to let them know about the impact of this proposed rule on your state, community, or organization. Visit the 5 Calls website https://5calls.org/issue/federal-financial-assistance-science-grants/ to let your congressional member know that you oppose OMB's attacks on scientific research, public health, and grant funding. Sample talking points are available on the website.

Comments must be submitted via https://www.regulations.gov/document/OMB-2026-0034-0001

What to learn more about the proposed rulemaking and learn how you and your organization can submit comments to OMB to oppose these changes?

Advocacy Webinar: Understanding Proposed Federal Changes to Grant Making - Implications of Federal Register Docket OMB-2026-0034-0001

Join IPHA's Director of Government Relations, Conny Moody, MBA, FNAP, to take a deeper dive into Federal Register Docket OMB-2026-0034-0001, Regulation for Federal Financial Assistance, which represents a substantial overhaul of federal grantmaking rules across 42 federal grantmaking agencies. These sweeping changes will affect every organization which receives federal grant funding directly or through pass-through funding. You will learn about:

• The critical components of the proposed rule and its impact
• Why your organization should submit comments opposing this rulemaking
• How to submit comments and make them impactful
• What is IPHA doing to advocate

When: Wednesday, July 17, 2026 | 2:00 - 3:00 PM (Virtual)

Register Here

Please share this alert with colleagues and friends of public health.

If you have questions or comments, please contact:

Conny Moody | Associate Executive Director for Government Relations and Compliance | [email protected]