This week, the majority of Republicans on the Senate Appropriations Committee handed Democrats, and the Establishment Uni-Party, a massive win by suspending a key rule in the upcoming budget continuing resolution bill.
The Regulation for Federal Financial Assistance rule proposed by the Office of Management and Budget in May was blocked by the Senate Appropriations Committee in a reported capitulation by Republicans to Democrats on the committee.
Senate Appropriations Committee Chair Susan Collins (R-Maine) called the rule “deeply flawed” and noted that “a huge group of organizations…have come out against it,” according to The Hill.
The Hill reported that this would “rein in a proposed rule from the White House budget office that would give Trump appointees more power to withhold congressional appropriations” by requiring the senior political appointees in charge of agencies to sign off on grants before administering them.
This assessment politicizes the rule by characterizing fundamental accountability as somehow a “political weapon.” But the rule is not merely a political statement about how federal grants should be administered. It contains concrete reforms aimed at fixing one of the federal government’s most persistent transparency failures: the inability to follow taxpayer money after it leaves Washington.
A July 2026 report from the Project On Government Oversight (POGO) examined the 60 largest domestically focused federal-assistance programs, accounting for 92.3% of federal assistance spending in fiscal year 2024.
Its findings were alarming. More than 74% of federal grant funding reviewed—approximately $712.6 billion—could not be traced to a county, city, or ZIP code. Prime-award information made only 20.7% of grant spending locally traceable, while subaward data added just another 5%.
That means taxpayers can often see which state agency, university, nonprofit, or other intermediary received a federal award, but not where much of the money ultimately went.
POGO described the federal subaward-reporting system as “fundamentally broken and incomplete.” The problem is not hypothetical. The report cited previous government reviews showing that recipients frequently used subawards without properly reporting them. One Government Accountability Office review found that although an estimated 70% of prime recipients in two small-business programs used subawards, only about 10% reported them through USAspending.gov.
Subaward reporting is required by federal law under the Federal Funding Accountability and Transparency Act of 2006 (FFATA). The OMB rule would have been much more than simply requiring senior political appointees to sign off on grants: It would have compelled agencies to follow federal law and make grant funding accountable to the American taxpayer.
THE SENATE JUST GAVE THE SWAMP A MASSIVE WIN.
The Senate Appropriations Committee reportedly advanced another CR—and Republicans surrendered a Trump administration rule requiring top political appointees to review agency grants.
Why does that matter?
Because once federal… pic.twitter.com/4GTBDJ2r4S
— CannCon (@canncon) August 3, 2026
What the Rule ACTUALLY Does – Not the Political Talking Point
Under the proposal, recipients would have to confirm in their regular performance reports that all subawards issued during the reporting period had been reported to SAM.gov. Federal agencies would also be expressly responsible for reviewing and monitoring that reporting and taking corrective action when recipients fail to comply.
Pass-through entities would be required to report subawards no later than the end of the month following the month in which the subaward was issued.
Most importantly, the rule would give those requirements teeth. Failure to report subawards could constitute noncompliance and become grounds for terminating a federal award.
That is exactly the kind of accountability the current system lacks.
For years, Congress and federal agencies have passed laws requiring spending transparency while tolerating reporting systems that remain incomplete, vague, and difficult to audit. POGO found that nearly 97% of the 2.4 million transactions it reviewed used duplicate descriptions. In some programs, every transaction carried the same generic phrase or unexplained acronym, providing taxpayers almost no useful information about what was purchased, who benefited, or what outcome was achieved.
The proposed rule would not solve every weakness identified by POGO. It does not appear to require city- or ZIP-code-level reporting in every feasible case, nor does it fully establish the detailed transaction-description standards POGO recommends. But it would take a meaningful first step by forcing recipients to account for downstream awards, requiring agencies to monitor compliance, and attaching real consequences to persistent reporting failures.
Removing those provisions would preserve a system in which hundreds of billions of dollars can move through state governments, nonprofits, universities, contractors, and related entities without adequate public visibility.
Fiscal accountability cannot stop when the Treasury sends the initial payment. The public must be able to follow the money through every major recipient and subrecipient until it reaches its intended purpose.
Congress should be strengthening that principle, not stripping it out of legislation. A government that claims to care about waste, fraud, abuse, and the national debt cannot simultaneously weaken one of the clearest mechanisms for determining where taxpayer money actually goes.
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