Will the OMB Proposed Rule Gain Traction in Congress?

Earlier this year, the Office of Management and Budget (OMB) released a proposed rule that would change how the federal government distributes and administers every federal grant, cooperative agreement, and pass-through award. The “Regulation for Federal Financial Assistance” proposed rule is the largest overhaul since the guidance was first published in 2013. With over 496,000 comments – nearly 99% opposed to the proposed rule – stakeholders are watching to see how Congress responds.

While the rule was supposed to go into effect on October 1, the Senate took a mostly symbolic step forward, voting to delay implementation of OMB’s proposed rule through December 11. Speaker Johnson has said that the House will vote on the bill early in September when they return to DC. But, then what?

Congress, particularly Republicans, could back channel to the administration their concerns with the bill. Democrats can and will continue to elevate this issue through levers they have in the minority through letters, questions during hearings, press releases, etc.

None of that, on its own, is likely to change OMB’s calculus. This will ultimately come down to principal opposition within the administration. As Cabinet secretaries and their senior leadership, who will own operational fallout, better understand what compliance requires, we expect there to be pushback internally.

The CR delay buys time, but this is only the beginning of the rule’s messy path to implementation.