Sen. Collins Presses OMB to Reconsider Sweeping Grant Rule Changes

WASHINGTON, July 7, 2026 – An effort to rewrite rules governing federal grants is drawing criticism from one of Congress’ top Republican appropriators.

Senate Appropriations Committee Chair Susan Collins , R-Maine, is urging the Office of Management and Budget to slow down and revise a proposal released in late May which would overhaul federal grant rules, impacting virtually all federal financial assistance, including broadband infrastructure grants.

Learn about America250 / Telecom150

                        Learn about America250 / Telecom150
                    

In a letter sent Monday to OMB Director Russell Vought , Collins urged the agency to withdraw portions of the proposed rule, arguing the changes would “conflict with Congress’ control over the federal funding process.”

OMB’s proposed rule would make extensive changes to a government-wide framework for administering grants, cooperative agreements, and other forms of assistance, known as the Guidance for Federal Financial Assistance, or ‘Uniform Guidance’.

OMB’s proposed rule would impose significant new compliance obligations on recipients and subrecipients of federal financial assistance.

The proposed rule would give federal agencies broad authority to suspend or terminate awards at any time, if an agency determines that a termination is aligned with federal priorities or “the national interest.”

The rule would eliminate fixed-amount grant and subgrant awards, which OMB found “can limit transparency and hinder effective oversight.”

The rules would prohibit the use of federal funds to support diversity, equity, and inclusion initiatives, and expand restrictions on collaborations involving certain foreign entities, among other provisions.

OMB has stated that the intent of these changes is to “improve transparency, accountability, and oversight” for these awards.

In her letter, Collins objected to expanding federal agencies’ grant termination authority, arguing the proposal would allow agencies to end grants with limited opportunity for recipients to appeal.

“Authorizing mid-award termination of Federal awards, with limited ability to appeal, would inject uncertainty into the Federal award process, especially for awards that span multiple years, and make these awards more costly,” Collins told Vought.

The proposed rule would also require that following the merit-review process for any federal assistance awards, senior appointees must perform a pre-issuance review that, in part, requires them to consider whether the award “demonstrably advance[s] the President’s policy priorities.”

Additionally, when conducting this review, the proposed rule requires senior appointees “to use their independent judgment when evaluating Federal award proposals.”

“Adding this additional review for awards that have already been selected through a scientific, merit-based peer review process would undermine the objective that the Federal government fund scientific and biomedical research projects based on scientific merit and value, rather than political ideology,” Collins’ letter states.

Collins urged OMB to extend the public comment period by at least 90 days and withdraw provisions she said would harm small communities and scientific and biomedical research. Public comments on the proposed rule are currently due Monday, July 13.

“The proposed revisions are the most significant changes proposed to the Guidance since it was adopted,” Collins said. “Yet, OMB has provided stakeholders only 45 days to comment on the rule, with a stated intent to finalize the rule by October 1, 2026, to align with the upcoming fiscal year. I have heard from numerous stakeholders that the current comment period is inadequate.”

OMB’s proposed rule could reshape federal broadband funding

The proposed changes would have implications across the federal government's broadband portfolio.

OMB specifically references the $42.5 billion Broadband Equity, Access, and Deployment program in its justification for the rule on page 10, arguing that previous federal grant requirements contributed to delays in broadband deployment.

However, BEAD is explicitly exempt from the proposal’s expanded discretionary termination authority, an exception required under Executive Order 14332. That distinction does not extend to all federal broadband programs.

The proposed rule would still affect BEAD administration through other provisions.

Those include new restrictions on DEI provisions and disparate impact liability, mandatory participation in the Department of Homeland Security's E-Verify program, expanded risk review criteria for applicants, new requirements governing subawards, and the aforementioned pre-issuance review by senior political appointees for new competitive awards.

Benton Institute for Broadband & Society Executive Editor Kevin Taglang identified unresolved questions for BEAD recipients under the proposed rule.

First, he argued that while the BEAD termination exemption applies to initial awards, it is unclear whether that protection extends to state-issued subgrants made before the effective date.The proposal also does not address how new conditions applied to a state’s BEAD award would be handled if they cannot be flowed down to existing subgrant agreements.

Taglang also raised questions about whether future changes to government-wide grant regulations would automatically modify the terms of existing BEAD awards that were negotiated under the previous regulatory framework.

Beyond BEAD, the proposed changes could affect a range of federal broadband programs administered across multiple agencies.

Taglang identified potential impacts for NTIA programs, including the Tribal Broadband Connectivity Program and Digital Equity Act programs, as well as USDA’s ReConnect program, Treasury’s Capital Projects Fund, and FCC Universal Service Fund programs such as Lifeline and E-Rate.