August 7, 2026
As Congress continues to do very little this year, most of our advocacy is revolving around the actions of the White House and the executive branch. At the moment, we are very concerned about the actions of the Office of Management and Budget (OMB) and are involved in an advocacy effort to check their proposed rule concerning federal grants and grantmaking. The proposal, if made final, would fundamentally alter the way federal grants are awarded, administered, and overseen across federal agencies, including those from SAMHSA that fund recovery efforts around the country.
OMB is the White House branch responsible for disbursing government funds, including those appropriated by Congress to government agencies (such as SAMHSA). For over 50 years, OMB has disbursed these funds without question once they were lawfully appropriated. Current OMB leadership, however, believes they have the power to withhold disbursements, regardless of Congressional action. To this end, they have issued a proposed rule change:
• OMB’s proposed rule would require senior political appointees to conduct “pre-issuance review” of every discretionary grant, explicitly reducing the role of peer review and mandating that awards “demonstrably advance the President’s policy priorities.”
• Federal agencies would gain authority to terminate or suspend active discretionary awards at any time based on agency “interest,” mirroring “termination for convenience” provisions contained in the Federal Acquisition Regulation.
• The proposed rule would also incorporate cross-cutting prohibitions on DEI-related activities, “gender ideology,” disparate-impact liability theories, and collaboration with covered foreign entities into all federal awards, while significantly narrowing allowable costs for publication, conferences, memberships, and public communications.
One of the most consequential changes in the proposed rule is the requirement that senior political appointees conduct a “pre-issuance review” of every discretionary grant before it is awarded. Under proposed § 200.205(b), agency heads must designate one or more senior appointees to review all discretionary awards, applying a set of enumerated principles that include determining whether awards “demonstrably advance the President’s policy priorities.”
The proposed rule explicitly provides that peer review recommendations “remain advisory and are not ministerially ratified, routinely deferred to, or otherwise treated as de facto binding by senior appointees or their designees.” Senior appointees are instructed to use their “independent judgment” and must not “routinely defer to the recommendations of others.” Taken together, the new process represents a significant departure from the previous grantmaking model, under which independent expert peer review was the primary mechanism for determining scientific priorities at various federal agencies. the proposed rule does not require a finding of noncompliance or fraud to justify a discretionary termination. As such, the proposed rule would both provide the government with unlimited termination rights and potentially implicate the corresponding due process rights of terminated grantees.
The SUD recovery community is especially attuned to this issue, as we experienced this very same process in January. That was when the OMB, in one night, canceled approximately 2,000 SAMHSA grants worth over $2 billion, with the explanation that these grants no longer aligned with the “policies and priorities” of the current Administration. Although these cancelations were reversed (due in large part to the community’s advocacy), it remains a reminder to the fragility of our situation.
It is no exaggeration to say almost the entirety of Washington is mobilized in opposition to this rule. Comments in opposition to the proposal have been submitted by powerful organizations, from universities to medical schools to pharmaceutical companies to local governments. By July 13, OMB had received close to 500,000 comments on the rule.
Congress has not been in an uproar on the issue but has its concerns. As the Senate seeks to negotiate a budget continuing resolution (since the government will clearly not be funded by September 30, due to the sluggishness of the process), Republican Appropriations Committee chair Senator Susan Collins is hopeful the body can pump on the brakes on this potential rule. The CR contains a a temporary ban on finalizing the White House proposal. The White House would only be blocked, however, from making changes to the grant process during the duration of the Continuing Resolution (until December 11.)
We will continue to keep you informed of developments as they occur.
1 Courtesy of Faegre Drinker