Today, NCSHPO submitted a comment letter in response to the Office of Management and Budget’s May 29, 2026 proposed rule. The proposal would give federal agencies substantially broader authority to suspend or terminate discretionary grants based on whether recipients “demonstrably advance the President’s policy priorities.”

Last week, a contentious House appropriations hearing, this proposed overhaul of federal grant regulations was thrust into the spotlight, with critics arguing the rule could inject political considerations into longstanding grant programs by allowing agencies greater flexibility to discontinue awards they determine are no longer in the federal government’s interest.

During the hearing, OMB Director Russell Vought defended the proposal, stating agencies should not be required to continue funding projects that no longer serve program goals, agency priorities, or the broader public interest. Several exchanges were particularly pointed. Appropriations Committee Ranking Member Rosa DeLauro (D-CT) characterized the proposal as creating a political “litmus test” for federal funding, while Financial Services and General Government Subcommittee Ranking Member Steny Hoyer (D-MD) argued it would allow agencies to “deny or terminate virtually any grant at any time.”

Director Vought confirmed during the hearing that the proposal would not affect Congressionally Directed Spending projects, which typically include preservation projects. If finalized, however, the rule has the potential to significantly affect competitive preservation grant programs and HPF formula funding for State and Tribal Historic Preservation Offices under the Historic Preservation Fund (HPF), depending on implementation.

July 13th is the deadline for submitting public comments on the proposed rule. To date, nearly 100k comments have been submitted.