It used to be fashionable to discuss federal budget politics by sagely observing that the “federal government is basically an insurance company with an army.” While the basic budget math at the heart of that quip—that social insurance and defense make up the bulk of the federal budget by far—remain true today, it elides the other big category of spending: investment. On many issues that touch Americans’ lives, such as housing, transportation, science, education, and technology, the federal government’s main lever for implementing policy is financial assistance—primarily, grants. This makes sense: depending on the project, states, counties, cities, nonprofits, academics, researchers, or other actors might be better suited to accomplish a policy goal than federal agencies, employees, or vendors on contract. The role of executive agencies here is akin to that of an investment analyst: federal actors look for ways to spend money in furtherance of their board’s (i.e., Congress’s) goals, attempting to weigh the costs and benefits of aiding potential awardees. Some of these programs are well known (at least among wonks): the National Science Foundation’s scientific grants, the Department of Housing and Urban Development’s Community Development Block Grant program, federal highway funding, and so on. Some work in quieter ways: a cursory glance at Grants.gov reveals funding opportunities to improve tribal court capacity, rural development, renal disease research, and promote novel methods of education. In each of these cases and thousands of others, Congress has chosen to implement its policy priorities by supporting the work of third parties, rather than having the government do that work itself. This makes the mechanism by which grants are awarded extremely important: bad process can mean mission failure. Earlier this year, the Office of Management and Budget proposed a fundamental change to the grantmaking process. The OMB’s new regulatory scheme introduces political review into the award process and new discretionary termination clauses into grant agreements, among other changes. The proposed regulatory change represents the latest in a string of efforts led by OMB Director Russ Vought to downsize agencies, overturn congressional spending decisions, politicize the bureaucracy, and, as he wrote in Project 2025’s Mandate for Leadership, to “bend or break the bureaucracy to the presidential will.” If the proposal comes to fruition, all new grants would need to survive evaluation by “senior appointees” for alignment with administration priorities. Those awards that make it through the gauntlet would then become subject to… [TheTopNews] Read More.
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