July 13 Is Deadline To Comment On New Trump OMB Rule That Shifts Power

The New OMB Rule Would Give The U.S. President More Power

While this new OMB rule from the Trump administration has a rather bland-sounding official name, “Regulation for Federal Financial Assistance,” a more appropriate name might be “Turning More Control of Federal Funds Over to Political Appointees of the U.S. President.” Because that’s essentially what this rewrite of 2 CFR Part 200 would do, as I described on July 5 in Forbes. The rewrite pulls people—like external peer-reviewers and advisors along with the majority of federal workers—who are not directly under the President’s control out of the direct decision-making process when it comes to deciding who gets the over $1.1 trillion in funds that the federal governments gives to different individuals, towns, cities, universities, businesses and other institutions each year. So if you live or work in the U.S. in any way, you will probably be affected.

That would bring significantly more power to the U.S. President because as the seventh U.S. President Andrew Jackson once wrote, “Money is power.” U.S. President Donald Trump has already demonstrated how withholding, cutting and terminating federal government can be used to force universities to comply with his administration’s demands. This new OMB rule would deepen and expand that authority to pause, cut or even terminate federal funding for anyone or anything without having to provide much justification. So, snap, ultimately this new OMB rule is about the P-word—meaning that the U.S. President will be able to say even more, “I’ve got the power.”

Proponents Of New OMB Rule Argue That It’s Good To Give The U.S. President More Power

Those supporting the new OMB rule basically favor giving the U.S. President more such power. The proponents whom I have talked to argue that the President is elected by the people and, thus, in theory represents the interests, personality and will of the people. Trump supporters have posited that Trump wasn’t able to execute all of his policies and agenda during his first go at President because various non-elected government officials stood in his way at the time.

Supporters of the rule also have presented an accounting argument—that the U.S. President needs tighter oversight and control of federal funding to protect taxpayers and make sure that taxpayer money goes to the “right” places. Funding from the federal government does ultimately come from people like you—meaning people who pay taxes, which should apply to everyone in the U.S. And there certainly have been examples of taxpayer money going to projects, work and wars that many taxpayers would not favor.

Opponents Of The OMB Rule Argue That It’s Bad To Give The U.S. President More Power

The counters to all of the above is basically the opposites to all of the above—that giving a single individual like the U.S. President so much power over so much money is not good for the country. What if, for example, the President’s agenda and interests are not truly aligned with those of all taxpayers? In a country as large and as diverse as the U.S., what are the chances that a single individual would represent all the interests of every group, population or sector. That was the basis for all the checks and balances that have been put into governmental funding processes over the years—like having real scientific experts help determine where scientific funding should go.

Another concern being expressed is how this would affect the balance of power between the U.S. government and local authorities such as municipal, county and state local governments. In a piece for the National League of Cities entitled, “New OMB Rules for Grantees Could Override Local Authority,” Dante Moreno
and Michael Wallace argued, well, exactly that. They wrote how the “OMB’s proposed overhaul of federal grant rules would affect nearly every form of federal funding that cities, towns and villages receive, with changes slated to take effect October 1, 2026,” how “Several provisions would increase administrative burdens on municipalities, introduce new compliance requirements, and allow grants to be terminated mid-award” and how the “NLC is urging members to submit comments to OMB before the July 13 deadline and has resources available to help.”

The National Association of Counties has chimed in as well. It emphasized how the 2 CFR Part 200, the Uniform Guidance, is the one rule governing all of the federal funding regularly sent to the 3,069 counties in U.S. for critical functions such as disaster management, public safety, transportation, housing, public health, workforce training, child welfare and public lands. It pointed out how such changes could allow the President and his administration to more easily terminate projects in midstream while shifting more risk and liability to the counties. It’s not too much of a stretch to imaging a situation where the President wants a particular city or county to do something and then dangle federal funding or hold it hostage to get compliance.