White House Orders Stricter Checks to Curb Wasteful Federal Grant Spending
Published Date: 8/12/2025
Presidential Document
Summary
The government is shaking up how it watches over federal grants to stop waste and make sure tax dollars help Americans. This means stricter checks on who gets money and what projects get funded, especially cutting out programs seen as un-American or ineffective. These changes start soon and aim to save money while making grants smarter and fairer for everyone.
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Analyzed Economic Effects
6 provisions identified: 1 benefits, 4 costs, 1 mixed.
Broader use of termination-for-convenience
The Director will revise guidance to require that discretionary grants permit termination for convenience, including when an award no longer advances agency priorities or the national interest, and agency heads must revise existing discretionary grants to permit or clarify immediate termination for convenience (subject to specific statutory exceptions such as CHIPS, certain Commerce awards, and covered international trade agreements).
New senior review for grant announcements
Agencies must promptly name a senior appointee to create a review process for new discretionary grant funding opportunity announcements and discretionary awards. Until that process is in place, agencies may not issue new funding opportunity announcements without prior approval from the designated senior appointee.
Content limits on eligible grant projects
Senior appointees must ensure discretionary awards demonstrably advance the President's policy priorities and shall not be used to fund, promote, encourage, subsidize, or facilitate racial preferences, denial of the human sex binary, illegal immigration, or initiatives said to compromise public safety or promote anti‑American values.
Lower indirect costs favored; F&A limits
Agencies should give preference to institutions with lower indirect cost rates, and the Director is directed to revise the Uniform Guidance to appropriately limit use of discretionary grant funds for facilities and administrative (F&A) costs.
Tighter controls on grant fund drawdowns
Agencies are to insert grant terms that prohibit recipients from drawing down grant funds for specific projects without affirmative agency authorization and require grantees to provide written, specific explanations or support for each drawdown request.
Favor broader recipients and reproducible science
Agencies should award discretionary grants to a broader mix of recipients rather than repeat players, prioritize reproducible 'Gold Standard Science' and measurable benchmarks, and balance awards between projects with likely immediate results and those with potential for longer-term breakthroughs.
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Key Dates
Department and Agencies
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