The Office of Management and Budget (OMB) introduced a new proposed rule to the Federal Register on May 29 that would overhaul how the federal government distributes financial assistance. Once enacted, this new rule will give agencies greater oversight to curtail funding to organizations and universities that push discriminatory DEI programs and far-left political ideologies.
The new proposed rule will specifically establish stronger safeguards against federal agencies discriminating against faith-based organizations, eliminate Green New Deal requirements, prohibit government grants that push DEI and gender ideology, forbid grants for voter registration campaigns, and require grant recipients to participate in the E-Verify program to ensure all their employees are in the U.S. legally. Government employees directly accountable to the president will also give final sign-off on financial assistance under this rule, rather than career bureaucrats.
OMB Director Russ Vought explained that the federal bureaucracy had previously been providing financial assistance to “woke” priorities and organizations.
“The freakout by those on the Left subsidized by taxpayer funds over OMB’s update of the regulation governing federal grant making tells you how important it is to keep the bureaucracies from leaking out spending that is woke, wasteful, and contra to the policies of the Trump Administration thru the NGOs,” Vought wrote in a post on X.
OMB’s new proposed rule is a direct result of an executive order that President Donald Trump issued in August 2025 requiring the OMB director to revise the guidance for providing financial assistance to outside organizations. In this executive order, Trump explained how taxpayer dollars had historically been distributed under previous administrations.
“Every tax dollar the Government spends should improve American lives or advance American interests. This often does not happen,” Trump said in his executive order. “Federal grants have funded drag shows in Ecuador, trained doctoral candidates in critical race theory, and developed transgender-sexual-education programs.”
The president continued to explain that a study in 2024 revealed “that more than one-quarter of new National Science Foundation (NSF) grants went to diversity, equity, and inclusion and other far-left initiatives.” These included grants that went to “educators that promoted Marxism, class warfare propaganda, and other anti-American ideologies in the classroom, masked as rigorous and thoughtful investigation.”
The New York Post reported that this new rule “will have the greatest effect on the Department of Health and Human Services, which oversees roughly $85 billion in grant spending annually, and the Department of Transportation, which handles roughly $45 billion per year.”
One unnamed official explained to the Post that this new rule will make it easier for the Trump administration to end a problematic grant in the future. “If a grant — even after it went through all these checks, even after it was qualified, even after money was going out the door — veers off from the commitment to stick with presidential policies, then… we’re able to turn it off,” the official said.
The official added that this will eliminate “some of the worst abuses of the grantmaking system” and will ensure that the federal government “is not funding efforts to go after the culture and values of American citizens.”
The Federal Register is allowing public comments on the new proposed rule until July 13, 2026.
Alan Jamison is the pen name of a political writer with extensive experience writing for several notable politicians and news outlets.
