The Office of Management and Budget (OMB) announced a wide-ranging proposal “Regulation for Federal Financial Assistance” that would substantively change the Uniform Guidance by expanding the force of Executive Orders beyond federal agencies to individual grantees at the state and local level and increasing the number of administrative burdens on grantees. The changes, if adopted, would go into effect swiftly on Oct. 1, 2026.
The National Hispanic Health Foundation (NHHF) and the Hispanic Health Professionals Network (HHPN) – national and regional health leaders across the nation – doctors, surgeons, nurses, dentists, PAs, pharmacists, hospital executives, public health administrators, psychologists, psychiatrists, social workers, dietitians and health advocates are concerned about the impact of these proposed regulations on the predictability and stability of programs in our underserved communities. The changes would substantially revise how the federal government manages grants and other assistance in research, education and public health funding.
Our concern is that this rule will cause a widespread disaster as federal grants no longer support community-based prevention and treatment programs, community health centers and hospitals, mental health programs, K-12 education, including STEM education, academic health professions education – recruitment, scholarships, and research, community programs that encourage healthy nutrition and lifestyle, agriculture, and so much more.
We believe these reforms will be detrimental to all Americans as federal support is decreased. The new OMB rule proposes requirements that will undermine scientific and biomedical research review process with new actions:
- Agencies to terminate discretionary grants in their best interest that is based on the agency’s goals or priorities, not based on scientific expert review process. The rule calls for a new process, following the review committee peer-review and merit-based process and decision, the pre-issuance review, to demonstrate the grant advances the president’s priorities.
- Deletes the discretionary action that allows agencies to add new priorities in their grant agreements.
- Removes the current appeal process for decisions that are not acceptable to the research applicants.
- Adds uncertainty to grant awards that have multiple years or are clinical trials and stop treatment to patients, adding financial and scientific losses to current and future research and to the clinical trial patients.
Communities are affected in several specific ways:
- The rule allows senior political appointees to review and pre-approve discretionary awards and introduces “termination for convenience” provisions, allowing agencies to cancel grants that no longer align with current administration priorities
- The guidance prohibits federal funds from being used to fund or promote Diversity, Equity, and Inclusion (DEI) or “gender ideology”. It also restricts funding for services for individuals without legal immigration status, voter registration, or issue advocacy.
- The proposal would largely eliminate fixed-amount subawards, replacing them with complex cost-reimbursement models. This significantly increases administrative burdens and compliance risks for local governments and nonprofit service providers.
- By shifting greater discretion to individual agencies, rules could become highly fragmented, making it difficult for local organizations to maintain essential services—such as housing, healthcare, and disaster recovery—due to unpredictable funding environments.
In summary, the NHHF strongly opposes this OMB reform of administration of federal grants and assistance because it will negatively impact the health of our communities across the nation.