Politicizing government investments hurts all of us

The federal government has a fundamental responsibility to spend tax dollars in the best interest of taxpayers. This should not be a controversial stance.

And yet, the Trump administration is attempting to politicize the allocation of federal funds. Nestled into a massive new rule proposed by the Office of Management and Budget (OMB) is a revision of Section 200.205 in the Uniform Guidance (UG) that would require political appointees to review and approve any awarding of federal funds. The revision would upend longstanding processes for how federal funds are awarded and would impact all federal agencies that award funding. For example, under the current UG, the Labor Department uses a peer review process in award decisions. That process is managed by a career civil service grant officer. A review board awards points based on the funding announcement criteria for awards and the grant officer has final say on award determinations. This ensures that grant decisions are merit-based rather than politically motivated.

The Section 200.205 revision in the proposed rule would still allow most of this process, but in the end, a political appointee would have final say based on subjective criteria, like “anti-American values” or the “president's policy priorities.” Perhaps even more disturbing, the OMB rule attaches new ideological conditions on funds in an effort to ensure they don’t promote diversity, equity and inclusion efforts, and it would allow federal agencies to exclude specific types of nonprofit organizations from eligibility before an application is even opened. This effectively removes any fair competitive environment where potential applicants are aware of the rules prior to applying.

This kind of politically motivated funding decision-making can be disastrous. For example, under the second Trump administration’s Agriculture Department policies overseeing wildfire funding require states to yield to the administration on unrelated efforts, including deportation and eliminating DEI programs. Because of that, $15 million in wildfire-prevention grants for an area in Washington state have been long delayed. That area was impacted by wildfires earlier this month and 65,000 residents had to be evacuated. As of Aug. 8, those funds were still on hold. More than 900 homes, businesses and buildings have been destroyed.

The award of congressionally mandated funds should not be tied to any president’s whims. Doing so, by design, deprioritizes the public good.

This has long been well understood and is why, historically and under current guidance, there is a firewall that allows apolitical career staffers to make merit-based award decisions without the participation of political appointees. I experienced this myself as an Obama administration appointee at the Energy Department. I ran an office that regularly made competitive grant awards, but I didn’t touch the selection process, which was conducted by career staff. Even as an administration appointee, I was kept separate from the selection process because the appearance of political favoritism had to be avoided to maintain the integrity of the process.

The bottom line: Taxpayers will not benefit from a system under which grants are awarded based on who curries the most favor with the president. Politicizing the grantmaking process by adding arbitrary requirements to fulfill presidential priorities and enabling political appointees to block projects they deem distasteful will hold back our ability to fund the projects our nation needs to maintain its research, development and deployment edge in a rapidly shifting economy.

We’ve already seen what the Trump administration’s attempts to politicize federal grant funding look like. A federal court ruled that the Trump administration acted unconstitutionally when the Energy Department canceled billions of dollars in grants for clean energy projects that were awarded in states that didn’t vote for Trump in the 2024 presidential election. This is not speculation. The Trump administration admitted to basing the cancellation decisions solely on whether projects were based in blue states. With these terminations, Trump used the federal government to sacrifice jobs and investment for partisanship. The courts correctly interpreted this as an assault on the constitutional guarantee of equal protection under the law. Now OMB is attempting to institutionalize this same approach to federal funding.

The harm caused by this proposed rule would stretch far beyond the projects targeted. It could make it less likely that high-quality applicants would compete for federal grants and loans, undermine trust in federal contracts, jeopardize private investment and weaken U.S. competitiveness. If private-sector and nongovernmental leaders cannot trust the impartiality and stability of government decisions and commitments, they may be less likely to include partnerships with the federal government in their business and innovation strategies. This could drive talent, capital and partnerships toward countries with more stable, apolitical funding environments, putting U.S. leadership in energy, science and technology at risk. It weakens the government’s ability to partner with companies to invest in strategic sectors, support vital domestic industries and ensure next-generation technologies scale in the United States, ironically, goals the Trump administration claims to support.

Jason Walsh is executive director of the BlueGreen Alliance. Walsh previously served in the Obama administration, as the director of the Office of Strategic Programs in the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy and as a senior policy advisor in the White House Domestic Policy Council, where he led the Obama administration’s efforts to align and scale up federal investments in workers and communities impacted by the shift away from coal in the power sector.