Trump Administration Proposes Federal Funding Guideline Change

The Trump administration has proposed sweeping changes in the rules governing recipients of federal funding. The Office of Management and Budget (OMB) issued its proposed Regulation for Federal Financial Assistance for public comment. The proposed rule makes a variety of changes affecting recipients of more than $1 trillion in federal funding.  

The changes include how funds are approved by federal agencies, tightening requirements to abide by federal policies, and giving agencies opportunities for on-going scrutiny of grant recipients. The proposed rule has generated a lot of commentary and debate. Local governments noted in comments that the changes would be hard to adopt in a short time frame and would require significant changes in compliance and accounting.  

APA submitted comments noting concerns about how the proposed overhaul of federal grant rules could affect planners' ability to administer and use federal funds.

Congress has now put the formal rulemaking process on hold by including a provision in a continuing resolution that extends federal funding that pauses any action by OMB on implementation of the rule. The pause runs through December 11, 2026. Although a temporary pause, the action highlights bipartisan concern about the proposal and may indicate a willingness to adopt a more permanent pause in a final spending bill that is also now due by December 11, 2026.  

At a minimum, this pause gives Congress and stakeholders more time to weigh in before any new requirements take effect. Planners have an opportunity to engage with local and federal officials to highlight potential risks and problems with the proposed new rule, including managing potentially conflicting policy guidance and the impact of uncertainty on funding sources for critical projects. 

Although the pace of federal rulemaking and shifts in policy guidance has slowed from the early months of the Trump administration, there are significant proposals in the pipeline. The potential for changes in control on Capitol Hill may increase the focus on regulatory action now and beyond the midterm election. 

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