A new rule proposed by the Office of Management and Budget threatens to reshape national federal grantmaking, potentially stripping funding from institutions that support “gender ideology” or diversity initiatives.

Released on May 29, the “Regulation for Federal Financial Assistance” proposal would revise existing grant guidelines to ensure that all federal awards align with the president’s ideological standards. 

If finalized, agencies would be empowered to suspend or terminate funding for hospitals, universities, and research institutions that do not comply with the federal administration’s standards. 

Targeting a “woke” agenda

In the proposed regulation, the OMB said the changes were a necessary measure to provide greater “transparency, accountability, and oversight.” 

However, the document also said previous administration procedures allegedly used federal award programs to promote a “‘woke’ policy agenda” that favored certain identity groups over the values of the American public.

“Federal awards were often used during those years to promote a ‘woke’ policy agenda that did not reflect the values of the vast majority of the American public,” the proposal reads.

To counter this, the proposed rule prohibits the use of federal funds for diversity, equity, and inclusion (DEI) policies, which the administration terms “gender ideology,” and gender-affirming care for individuals under 19. 

It also introduces mandatory pre-issuance reviews by political appointees, ensuring that grants are vetted for political alignment before a single dollar is awarded.

Impact on higher education

While Florida has already restricted DEI initiatives under Gov. Ron DeSantis, this new regulatory framework federalizes those efforts and pushes its anti-DEI impact nationwide. 

This rule could force universities to dismantle existing LGBTQ+ resource centers, inclusive academic programs, and specialized support services in order to continue receiving funding, according to the proposal’s regulations. 

Furthermore, this proposal would grant federal agencies the power to suspend or terminate existing grants “for convenience.” This means the government could cancel a university’s funding if an agency determines the award is inconsistent with “evolving agency priorities or the national interest,” according to an analysis conducted by the Association of American Universities, the Council on Governmental Relations, and the Association of Public and Land-Grant Universities.

The administration aims to implement the final ruling by Oct. 1. This decision would align with the start of the 2027 federal fiscal year and allow the regulation to apply to all new federal awards and funding amendments made on or after that date.

Stripping funds from healthcare and research

Entities that rely heavily on funding from agencies such as the Department of Health and Human Services and the National Institutes of Health will face a decision regarding patient care and federal grants, according to the proposal’s regulations. 

Hospitals, medical clinics, and scientific research institutions will be forced to choose between abandoning gender-affirming care and research and losing the federal grants that keep their operations afloat, according to the proposal’s regulations.

Dr. Oni J. Blackstock, an HIV physician and health equity advocate, said these funding threats are part of a growing national trend targeting medical equity.

In an April 2024 piece published in the PLOS Global Public Health Journal, Blackstock, alongside psychiatrists Jessica E. Isom and Rupinder K. Legha, said that healthcare is the “new battlefront for anti-diversity, equity, and inclusion (DEI) attacks”.

“The impact of growing attacks on DEI initiatives within healthcare portends potentially devastating consequences for existing efforts to diversify the healthcare workforce in service of an increasingly diverse nation and on existing racialized health inequities in the U.S.”, the scholarly article read.

If hospitals and medical schools are forced to abandon their equity initiatives to retain federal funding, the consequences could be dire for patients nationwide, according to Blackstock.

The authors said that “anti-DEI efforts may disproportionately drive out racially and ethnically minoritized physicians from the workforce, which will likely have literal life and death consequences for minoritized communities”.

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