Why Business Should Oppose OMB’s Plan To Politicize Grantmaking

The White House's budget arm wants to inject politics into how it hands out hundreds of billions in federal grants—and business leaders, normally at odds with scientists, are screaming in unison. The Office of Management and Budget is proposing sweeping changes to federal grantmaking that, critics warn, could politicize the peer-review process, slow research, and ultimately harm American science, economic competitiveness, and national security. The plan, detailed in a draft circular quietly circulated last month, would allow political appointees at OMB to veto or condition grant awards already approved by scientific peer review. It marks the most aggressive attempt by the executive branch in decades to impose political criteria on competitive federal funding.

The OMB, which traditionally sets government-wide financial and administrative rules, is proposing to amend the Uniform Guidance—the set of rules governing $700 billion in annual federal grants. Under the proposal, grant applications that clear agency-level scientific review would still require a political sign-off at OMB. That means a single political appointee could block funding for research on vaccine development, clean energy, or artificial intelligence, even if a panel of experts deemed it scientifically meritorious.

Business groups are alarmed because federal grants underpin much of the country's public-private research ecosystem, including partnerships with universities and national labs. The National Association of Manufacturers, the U.S. Chamber of Commerce, and the Biotechnology Innovation Organization have all signaled formal opposition, arguing that injecting political considerations will create uncertainty, slow time-to-grant, and drive top talent overseas.

'We can't have a system where grant decisions are made on the basis of ideology rather than scientific excellence,' said Martha Turner, a former OMB official now with the Center for American Progress. The proposal has also drawn fire from former National Science Foundation directors and Republican and Democratic lawmakers who say it undermines the principle of merit-based competition.

The broader implications are stark. The U.S. has long dominated global research and development because of a relatively depoliticized funding system, especially compared to countries where central authorities control grant allocations. Introducing political checkpoints risks replicating the inefficiencies that have slowed innovation in other nations. Moreover, it could jeopardize the trust of foreign talent and companies who choose the U.S. for its open, meritocratic research environment.

The OMB grantmaking plan is set for a 60-day public comment period ending in early September. If implemented, it would apply to all agencies, including the National Institutes of Health, the National Science Foundation, and the Department of Energy. Business leaders are urging OMB to withdraw the proposal or, at a minimum, exempt peer-reviewed research from political review. The coming months will test whether an unlikely alliance of CEOs and scientists can persuade the White House to reverse course—or whether politics takes an unprecedented seat at the grantmaking table.