Open Evidence

My Response to OMB's Proposed Regulation for Federal Financial Assistance

I sometimes feel like we’re living in a spaghetti western when I think about the administrative reforms to the Executive Branch done by the current Administration. The governance landscape has been transformed into a sun-baked, unpredictable frontier where decades of established institutional norms are tossed aside to make way for the new guy in town who is invariably irascible, cynical, self‑interested, and governing a corrupt world. So, forgive me for invoking the famous title of Sergio Leone’s flick in responding to the Office of Management and Budget’s Proposed Regulation for Federal Financial Assistance.

I’ve summarized my response here using this (perhaps regrettable) device. I encourage you to scroll to the bottom to read my detailed response and analysis as submitted to OMB via regulations.gov. You can submit your own comment by the close of business tomorrow here.

The Good

Wait…the good? Yes, in my opinion there are some non-objectionable revisions to the Uniform Guidance in the proposed rulemaking. These are relatively few compared to the terrible bits, but are still worth highlighting:

The Bad

Most of the proposal is very bad. While we’ve heard a lot in the press about the objections from the scientific community - there are implications that are terrible that go beyond that as well. Here are a few of the parts that I found particularly objectionable and are relevant to my interests:

The Ugly

Beyond being bad, there are several components that are ugly. These are provisions that OMB should be embarrassed by - and would have been during my tenure at the agency.

My Response As Submitted to Regulations.Gov

Christopher Steven Marcum, PhD
Open Science Advocate
7/12/2026

I am writing as a concerned citizen and open science advocate. I was previously a Senior Statistician and Senior Scientist at OMB, had privileged access to earlier drafts of this revision, and worked on the 2024 revision to the Uniform Guidance. In general, while there are a few non-objectionable revisions in this proposed rulemaking (see Section II below for those), it is on balance a terrible revision and I urge OMB not to finalize the rule.

Section I: Substantive Objections and Concerns

Preamble: Unnecessary Ideological Statements and Source Bias Delegitimize the Rule

The preamble to the proposed rule adopts an ideological tone that departs from the historically objective, neutral character of administrative modifications to the Uniform Guidance. By expressly incorporating policy frameworks from politically biased external entities, such as the Heritage Foundation, the Office of Management and Budget (OMB) introduces political polarization into a framework governing over $1.1 trillion in federal assistance. It also departs from OMB’s traditional evergreen stance on 2 CFR 200 and it should remain insulated from partisan influences to maintain broad public trust in federal funding.

Regulatory Impact Analysis is Insufficient and Inaccurate

OMB’s Office of Information and Regulatory Affairs has designated this proposed rule as not economically significant under it’s EO 12866 review. Not only was the economic analysis embedded into the regulatory impact analysis (RIA) inadequate, its conclusions that lead to a non-economic significance determination are wildly misaligned with reality.

This proposed rule exposes over $1 trillion in annual federal spending to potential political influence, clawback, and civic lawsuits. The natural outgrowth of such practices will necessarily have trillions in derivative effects that span every sector of society (jobs lost, projects ended mid-development, etc). The failure to conduct a rigorous, data-driven regulatory impact analysis creates severe fiscal uncertainty for states, municipalities, small businesses, and universities. This lack of transparency was explicitly cited by Senator Susan Collins in her formal request for a full delay and withdrawal of these burdensome mandates. Potential economic impacts were also cited by Moody’s in their own determination that the proposed rule would likely affect the credit ratings of federal grant recipients. Clearly, whomever conducted the economic analysis component of the RIA did not consider these macro effects. It’s a major oversight and a process foul by OMB that could have consequences with respect to non-compliance with the Administrative Procedures Act because OMB did not follow its own policies for conducting a cost-benefit analysis under Circular A-4.

I urge OMB to revisit this inadequacy and resubmit the rule with a new regulatory impact analysis that fully considers the underlying macro economics of the proposed rule.

§ 200.454 Lack of Clarity Regarding Academic Journal Subscriptions and Indirect Cost Pool Reimbursements

The proposed revisions to Subpart E fail to clarify whether changes to allowable expenses would restrict or eliminate the capacity of university libraries to utilize indirect cost allocations for research journal subscriptions and institutional transformative agreements. As highlighted by the Association of Research Libraries), defunding journal subscriptions within the indirect cost pool would cause severe structural barriers to knowledge access across higher education. Clear and explicit language must be added to confirm that institutional indirect funding remains fully permissible for scholarly communications and institutional database licensing.

§§ 200.332, 200.450, and 200.454 Prohibition on Direct and Indirect Funding to Advocacy Organizations via Subcontracts (via passthrough) is too broad

The proposed rule introduces restrictions that would preclude federal award recipients from flowing funds to external entities categorized as advocacy groups via subcontracts. In practice, many highly specialized technical consultancies, scientific societies, and civic organizations maintain separate, lawful public advocacy operations and are supported by federal assistance through subcontracts.

§ 200.205 Centralized Pre-Issuance Political Review and Approval Framework will Kill American Science

The proposed section mandates that a senior political appointee at each federal agency must review and approve every discretionary award prior to issuance. This requirement formally subordinates technical, merit-based peer review to political alignment with presidential policy priorities. As noted by the American Association for the Advancement of Science (AAAS) and the American Public Health Association (APHA), inserting a political layer into the award selection process fundamentally disrupts the objective insulation of scientific and biomedical research from changing political whims. This provision is an egregious assault on scientific integrity for research grantmaking. Moreover, it exposes non-scientific financial assistance (the majority of assistance exposed to 2 CFR 200) to such whims and injects political uncertainty into the risk equations of organizations that rely on federal grants for their programmatic work.

§ 200.340 Broadened Mid-Award Funding Termination for Convenience Threatens Economic Stability

The expansion of agency authority to unilaterally terminate active awards for administrative convenience or shifting national interest creates extreme operational instability. DOGE used this extensively in 2025 to cancel government contracts, sometimes outside the existing terms and conditions contracts between the government and its awardees. It’s a terrible idea to codify this rash and irresponsible behavior in reg.

Scientific and public infrastructure programs are inherently long term, often spanning multiple presidential administrations. Unilaterally stopping active projects because of shifting political priorities results in substantial waste of taxpayer funds, as partially completed research or infrastructure yields minimal, if any, return-on-investment. More broadly, this instability weakens multi-year funding commitments to small businesses and state and local governments, potentially creating a credit negative environment for heavily dependent entities as analyzed by Moody’s and reported on by Bond Buyer).

§ 200.220 Expansion of the Wolf Amendment to Every Agency Limits Scientific Progress

This provision seeks to suppress foreign collaborations in research and development historically limited by the Wolf Amendment to NASA’s appropriations from reaching China. Imposing absolute prohibitions on international scientific co-authorship and academic data exchange without clear, targeted statutory directives creates an unnecessary bureaucratic burden. This blanket expansion threatens to suppress international scientific collaboration, which is essential for addressing global challenges in public health, physical, and environmental science.

§ 200.461 There will be Unintended Consequences of Broadly Prohibiting Article Processing Charges Without a Substitution Plan

The proposal disallows Article Processing Charges (APCs) and open access publishing fees as direct allowable expenses. While alternative publishing mechanisms such as preprints and the systematic exercise of the federal purpose license as codified in 2 CFR 200.315 by granting agencies provide a more sustainable framework for public access, an immediate, uncoordinated ban on APC direct charges could have unintended consequences (as I’ve previously discussed in detail elsewhere).

I urge OMB to revise this section to clarify an alternative to traditional scholarly publishing as the mechanism by which research results and data are shared by grantees: including directing federal agencies to assert their federal purpose license over all content supported by their grants and to allow for preprints to satisfy public access requirements.

§ 200.339 Joining Civil Lawsuits is Government Overreach

The proposed section contains provisions that would allow the Department of Justice to formally join or facilitate private, third-party civil society lawsuits against federally funded projects and award recipients for alleged grant noncompliance. This mechanism creates a highly weaponized oversight structure, exposing public entities, universities, and local governments to costly, politically motivated litigation. It is an unprecedented overreach of authority and further politicizes federal grantmaking in a way that will disrupt the continuity of programs benefiting from federal assistance across the timelines of one Administration to another.

Section II: Non-objectionable revisions

Change from Guidance to a Regulation is Good Governance

I support OMB’s reclassification of 2 CFR Part 200 from administrative guidance to a regulation. I previously advocated for this move during the last revision process in 2024 when I was at OMB, as it is onerous for the public to be exposed to dozens of deviations in grantmaking policies across the government. As Cole Donovan and I wrote earlier this year, interagency coordination efforts often fail because of decentralized, competing interests across the executive branch. This shift eliminates the administrative fragmentation that occurs when individual federal agencies interpret and implement grantmaking policies inconsistently, creating a single, predictable framework for grantees.

De Facto Alignment of Federal Data Policy is Good Information Policy

Although not explicitly articulated as such, the proposed rule introduces data governance language that closely aligns with the GREAT Act, the Open Government Data Act and the related OMB guidance M-25-05, as well as the 2022 OSTP Public Access Policy. I encourage OMB to further clarify that all data, code, and publications produced under a federal award that are acquired by a federal agency should be made immediately publicly accessible and inventoried appropriately consistent with the requirements of M-25-05.

§ 200.315 Preservation of the Federal Purpose License Strengthens Public Access

The proposed text correctly maintains and reaffirms the long-standing federal purpose license framework in 2 CFR 200.315. This provision ensures that the federal government retains a royalty-free, nonexclusive, and irrevocable license to reproduce, publish, or otherwise use works developed under a federal award for public purposes. Retaining this language provides a strong, legally established alternative to expensive commercial publishing models and safeguards public access to technical data. OMB should strengthen this by requiring all agencies bounded by the regulation to explicitly assert this license over all data, manuscripts, and code (and other intangible property) resulting from a federal award.

§ 200.1 Clarifying the Definition of Personally Identifiable Information is Long Overdue

The rule provides a refined and updated definition of Personally Identifiable Information (PII). This is a welcomed change and one that I advocated for during the previous revision to 2 CFR 200 in 2024. This update aligns the definition of PII with other OMB and agency guidance and regulations. It was always mis-defined in 2 CFR 200.

§§ 200.331 and 200.332 Enhanced Pass-Through Entity Clarity Supports Transparency and Subrecipient Compliance Reporting

The proposed updates introduce more robust reporting obligations and transparency standards for pass-through entities managing federal funds. There is a need for consistent, systematic transparency regarding how subawards are distributed, monitored, and accounted for on centralized platforms like SAM.gov. This proposal improves financial stewardship of taxpayer monies. It should reduce the risk of waste, fraud, and abuse in federal assistance programs.

The proposed text also offers improved guidance to distinguish whether an external entity is functioning as a contractor or a subrecipient under a federal award. This change is needed because previous guidance was confusing and frequently resulted in misaligned audit findings and inconsistent compliance monitoring.

§ 200.338 Clarification that Confidential Business Information is Protected is Fine but Needs Additional Guidance on Scope

In addition to the PII definition clarification, I support the clarification that confidential business information (CBI) is protected and cannot be compelled to be released without a legal justification. CBI is one aspect of confidential information that statistical agencies collect and must protect under the Confidential Information Protection and Statistical Efficiency Act that relies on a class E-felony for unlawful disclosure as a deterrent. This clarification helps align the obligations of trust imbued on the statistical agencies with the expectations of grantmaking agencies to protect CBI.

However, I urge OMB to clarify that both unawarded and awarded proposals and grant applications are NOT considered CBI. The public should have full awareness of what entities are proposing to do with taxpayer monies. Stuart Buck and I wrote about the importance of this for government transparency purposes last year.

Tags: general government

Recommended Citation:
Christopher Steven Marcum (July 12, 2026). "My Response to OMB's Proposed Regulation for Federal Financial Assistance." Open Evidence. https://doi.org/10.59350/gpk1d-kvn12