Press Release: 7/16/2026

Proposed federal funding rule changes draw strong opposition

 

The MMA and the Healey-Driscoll administration were among those who expressed strong opposition yesterday to proposed revisions to the federal framework that governs how trillions of dollars in grants and financial assistance are awarded each year.

The Office of Management and Budget and 41 executive agencies have formally issued a joint notice of proposed rulemaking seeking to revise budget guidance for federal financial assistance — known as Uniform Guidance — in order to rebrand the framework as the “Uniform Grants Regulation” and change it from voluntary guidance to binding government-wide regulation.

The proposed rule has drawn pushback from higher education associations, research advocates, and state and local governments. Critics argue that the overhaul would fundamentally change how federal grants are awarded by allowing political appointees to play a major role in funding decisions that have historically been guided by independent experts and rigorous peer review.

Gov. Maura Healey urged the Trump administration to abandon the proposal, arguing that it would undermine evidence-based decision-making and threaten scientific research, innovation and economic growth. She said the proposed rules would create “uncertainty for researchers, institutions and businesses while putting future scientific and economic progress at risk.”

In a letter to OMB Director Russel Vought, the MMA expressed serious concerns that the proposed changes would increase regulatory burdens on municipalities while destabilizing critical federal funding resources.

“We urge you to reconsider the proposed changes to ensure the regulations do not unintentionally contribute to unwieldy government processes and a climate of uncertainty,” the MMA letter stated. “We further request that the deadline for public comment be extended to ensure that all affected parties are aware of the proposed changes and able to weigh in.”

The MMA also highlighted the particularly adverse impact of proposed compliance and reimbursement processes on smaller communities with very limited staff. Many smaller municipalities would “be forced into noncompliance” or find themselves unable to even apply for grants, the MMA wrote.

The Trump administration’s Uniform Guidance proposal, released on May 29 and intended to implement recent executive orders, introduces the following major changes:

• Senior political appointees would be required to review all discretionary awards before they are issued to ensure alignment with presidential administration priorities.

• Federal agencies would obtain broad discretion to unilaterally terminate or suspend awards if they determine the funding no longer serves “program goals, federal agency priorities, or the national interest,” with limited procedural appeals for recipients.

• Administration policies on merit-based opportunity would be codified and would limit certain diversity, equity and inclusion requirements in federal awards.

• New international and security restrictions would place stricter oversight on foreign collaborations and restrict grant funding involving certain foreign entities.

• Fixed-amount awards and subawards would be eliminated.

The official public comment period closed on July 13. The OMB said it aims to finalize and implement the rule for the upcoming federal fiscal year, which begins Oct. 1.

Written by John Ouellette, Senior Executive and Director of Communications