Rep. Gabe Vasquez Opposes OMB Push to Politicize Federal Grantmaking, Inflict Chaos on New Mexico Institutions

WASHINGTON, D.C. - U.S. Representative Gabe Vasquez (NM-02) recently opposed an Office of Management and Budget (OMB) rule proposal that would inflict chaos on New Mexico institutions and grant the executive branch more unchecked power over federal spending activities. The proposed ruleis being spearheaded by Russell Vought, the author of Project 2025 who now heads the agency that manages the country's budget.

The rule would have major impacts on over $1 trillion in annual federal grantmaking and could harm local governments, Tribes, universities, nonprofits, school districts, healthcare organizations, small businesses, research institutes, and other organizations across New Mexico that rely on federal grants to serve their communities. Many of these grant recipients were already hit by funding freezes and uncertainty as a result of reckless actions and cuts by the Department of Government Efficiency (DOGE), and this rule would amplify that ongoing uncertainty.

The OMB Uniform Guidance serves as the federal government's core rulebook for grantmaking, shaping everything from how nonprofits recover costs to how agencies design and administer grant programs. Under the current rules, grant applicants must already meet numerous standards and oversight requirements, and awards are based on merit and metrics meant to ensure fairness. The proposed changes would give individual agencies and their political leaders sweeping discretion, creating uncertainty and inconsistency for the nonprofits and community organizations that rely on stable federal partnerships to deliver essential services.

Specifically, OMB's proposed rule would:

• Politicize federal grantmaking by giving senior political appointees greater control over discretionary awards while weakening the role of independent, merit-based peer review.
• Allow administrations to abruptly cancel existing grants based on shifting "agency priorities" or the broadly defined "national interest," creating uncertainty for communities, researchers, workers, and contractors relying on federal commitments.
• Undermine Congress's power of the purse by giving the executive branch expansive discretion to redirect or terminate funding that Congress approved for specific public purposes.
• Threaten critical services and constitutional rights by tying funding to vague ideological conditions and putting healthcare, education, scientific research, public safety, and economic development projects at risk.
• Create costly new red tape and delays through expanded E-Verify requirements, payment-eligibility screening, and written justifications for individual payment requests - burdens that would hit small nonprofits, rural providers, Tribal governments, and community organizations hardest.

On July 10, Rep. Vasquez and 126 other members of Congress sent a letter to OMB Director Russell Vought outlining their concerns with the proposed rule, reiterating how it would impact their constituents, and demanding that the rule be withdrawn.

In the letter, Vasquez and other lawmakers noted, "This proposal would represent the most sweeping and destructive transformation of the federal financial assistance system in modern history and would subordinate nonpartisan, merit-based grantmaking to political control, exposing the entire framework to serious constitutional challenge. With more than $1 trillion in annual Federal awards at stake, the consequences would be felt by every state, federally recognized tribe, city, county, research university, hospital, and countless nonprofits, community organizations, and private firms that deliver critical scientific studies and essential public services."

Read the full letter here.

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