New Grant Rule on Federal Financial Assistance Could Expand Government Surveillance

At the end of May, the Office of Management and Budget (OMB) released a sprawling Proposed Rule that would effectively redefine the relationship between the federal government and recipients of federal funds. Through an amendment to Title 2 of the Code of Federal Regulations—a broad framework that governs federal grants, cooperative agreements, and other federal financial assistance—the Proposed Rule seeks to substantially expand the powers of federal political appointees to monitor the speech and conduct of funding recipients.

Seemingly on a fast track, with an expected implementation date of October 1, 2026 and only a narrow 45 day comment period, the Proposed Rule is expected to be finalized before the upcoming fall. In its own words, the Proposed Rule is meant to implement “strong internal controls at Federal agencies and enhanced oversight regarding how Federal dollars are spent.” The practical impact of these changes is that federal awards, including grants that many HIV organizations and providers rely upon, would become significantly politicized. Agencies would have new expansive powers to guide financial assistance to political allies, and funding recipients would be pressured to forego virtually all work that appears counter to federal policy priorities to maintain funding.

Read our latest Health Care in Motion.