Inside (the Beltway) Scoop

By: Ellen Kuo
Thursday, July 16, 2026
OMB Director Testifies at House Appropriations Subcommittee on Financial Services and General Government Hearing

The hearing went over the Office of Management and Budget’s (OMB) expanding role in implementing executive actions and the balance of power between Congress and the Executive Branch. Chairman David Joyce emphasized that OMB "plays a central role in most of the decisions made in the executive branch" and reminded members that OMB was created by Congress to help execute federal budget policy. He stressed the need to ensure federal funds are being used as Congress intended while reviewing OMB's request for a 13.3 percent funding increase and its growing responsibilities implementing presidential priorities. Joyce also asked Vought what DOGE accomplished and whether there was a plan to have a closing DOGE report.

OMB Director Russ Vought defended the Administration's fiscal agenda, arguing that President Trump's budget represented "the end of fiscal futility." He highlighted nearly $2 trillion in mandatory savings, the enactment of a $9 billion rescissions package, and proposals to reduce non-defense discretionary spending while significantly increasing defense spending. Vought stated that OMB's budget increase is largely driven by inflationary costs, security requirements, information technology modernization, and staffing needs, explaining that "OMB is a personnel intensive agency" that has not grown proportionally with the size of the federal government. Throughout the hearing, Vought argued that OMB is attempting to improve oversight of federal spending while leveraging new technology and artificial intelligence to better analyze federal programs.

Much of the hearing centered on the Administration's proposed revisions to 2 CFR Part 200 (Uniform Guidance) governing federal financial assistance. Democratic members sharply criticized the proposed rule, arguing it would politicize grantmaking by requiring recipients to "demonstrably advance the President's policy priorities." House Appropriations Committee ranking member Rosa DeLauro also said that she appreciated Vought’s attendance even though the House Appropriations Committee has already completed the FY 2027 spending bills. DeLauro was critical of OMB withholding funding, the shuttering of entire agencies, and the hijacking of billions from investments to pay for military spending. She also brought up the OMB proposed rule for Federal Financial Assistance as a way to establish OMB as the final arbiter of spending and noted the harm it will do to medical research.

Democratic members said that the OMB has exceeded its statutory role by withholding congressionally appropriated funds, expanding executive authority over grants, and proposing regulatory changes that could politicize scientific research and federal financial assistance. The debate over the proposed Uniform Guidance revisions—and particularly their potential effects on peer review, negotiated indirect cost rates, and research grant administration—emerged as one of the central issues of the hearing, reflecting broader congressional concerns about the future of federal research funding and executive control over grantmaking.

Rep. Maria Gluesenkamp Perez wanted to know if OMB had already suggested to federal agencies that they should comply with the OMB proposed rule to overhaul grants procedures and whether OMB was building an AI tool to find grants misaligned with the president’s agenda. Earmarks that fund specific grants wouldn’t be subject to termination, according to Vought. She also wanted to know the funding streams for OMB staff and whether any of it came from U.S. Agency for International Development or Consumer Financial Protection Bureau appropriations. Rep. Mike Cloud supported the administration’s ability to cancel grants and to bypass nongovernmental organizations that did not have the same agenda as the administration. Rep. Mark Pocan asked very pointed questions of Vought, saying he was not giving the answers requested. Pocan also wanted OMB to move money out, and he questioned Vought about whether he intends to use a pocket recission by the end of September. Vought denied he was planning to.

The hearing also included significant discussion of indirect costs associated with federally funded research. Members expressed concern that the proposed OMB rule could undermine long-standing negotiated indirect cost agreements by expanding agency discretion over grant administration and introducing new policy-based considerations into award decisions.