CR Delays Rule Tightening Federal Grant Award Oversight
A continuing resolution signed into law temporarily blocks the OMB's proposed rule that would make its grant guidance binding on all agencies and require political appointee review of discretionary awards.
President Trump signed the Continuing Appropriations and Extensions Act, 2027, a continuing resolution (CR) funding the U.S. government through December 11, 2026. A key provision within the CR blocks the Office of Management and Budget (OMB) from finalizing or implementing its May 2026 proposed rule on federal financial assistance. The proposed rule represents a significant shift in the administration of federal grants. It would transform the existing framework from nonbinding guidance into formally binding regulations applicable to all agencies. Crucially, the proposal would also require that discretionary awards receive a pre-issuance review from senior political appointees to ensure compliance with administration priorities and applicable law. This change could introduce a substantial new layer of political oversight into the grant-making process, affecting the many clients—from research institutions to non-profits—that depend on federal funding. The legislative block offers these stakeholders a temporary reprieve. The prohibition is tied to the CR's expiration date. Counsel for grant recipients should monitor future government funding negotiations to see whether the provision is extended or allowed to lapse, which would clear the way for the OMB to finalize its rule.