WASHINGTON, D.C. — The White House Office of Management and Budget posted a proposed rule on May 29, 2025, that would require political appointee review of all federal grants before approval. The rule, if finalized, would affect approximately $1 trillion in annual federal funding distributed across nearly every federal agency that awards grants.

The proposed rule mandates that each federal grant undergo review by a political appointee prior to approval. It also applies universally to any federal agency that distributes money, significantly broadening the scope of political oversight in the grantmaking process. Additionally, the rule would grant authority to halt ongoing grants mid-cycle, a provision that could disrupt existing programs and contracts.

The administration intends for the final version of the rule to take effect on October 1, 2025, giving agencies less than four months to adjust operations after the comment period closes. Public response to the proposal has been substantial: nearly 500,000 comments were submitted to regulations.gov by the Monday night deadline. An analysis using artificial intelligence indicated that approximately 94% of those comments opposed the rule.

Despite the volume of public feedback, an OMB insider stated that only two people are reviewing each comment submitted. This limited staffing could pose challenges in thoroughly evaluating the nearly half-million public submissions before the agency moves toward finalizing the regulation.

The proposed rule represents a notable shift from earlier characterizations of its impact. In February 2025, the OMB posted a one-paragraph abstract asserting the rule would have no substantial economic impact. That assessment stands in contrast to both the scale of funding affected—approximately $1 trillion annually—and the overwhelming public opposition reflected in the comment period.

Federal grants support a vast array of state, local, tribal, and nonprofit programs, from public health and education to infrastructure and scientific research. Requiring political appointee approval for each grant introduces a new layer of administrative review that could delay disbursements or alter funding priorities based on political considerations rather than technical or programmatic criteria.

The compressed timeline for implementation—targeting an October 1 effective date—and the limited resources allocated to reviewing public input raise questions about how thoroughly the agency will consider stakeholder feedback before enacting such a wide-ranging policy change.