The ACR Project Comments on OMB’s Regulatory Overhaul of Federal Financial Assistance

The ACR Project filed a comment with the Office of Management and Budget (“OMB“) in support of a proposed rule overhauling the terms of federal financial assistance across the agencies.  You can read that comment, below.

While OMB’s proposal is sweeping, our comment addresses only 4 parts.

To better realize the promise of America’s major nondiscrimination laws, OMB’s proposal seeks to operationalize President Trump’s directives from Executive Order 14281 restoring equal opportunity and meritocracy across the federal government. The relevant language would–“to the maximum extent permitted by law”–eliminate the use of disparate-impact analyses.  We lauded the effort and proposed ways to tighten its terms.

More broadly, the OMB proposal seeks–again, “to the maximum extent permitted by law”–the cut off the use of Federal funds to “fund, promote, encourage, subsidize, or facilitate” “Diversity, Equity and Inclusion” “policies, principles, or practices that violate any applicable Federal anti-discrimination laws” such as “racial preferences or other forms of racial discrimination…that violate any applicable Federal anti-discrimination laws….”  We supported OMB’s efforts to harmonize federal regulations, grants, and contracts2 with Congress’s spending-clause-based nondiscrimiation laws, and we suggested possible improvements here, too.

Otherwise, our comment addressed the interaction of two other well-motivated provisions of the OMB proposal.  One seeks to assure that recipients do not discriminate against disfavored “political, ideological, or religion” speakers or organizations based on their viewpoint, content, or subject matter.  The other seeks to prevent funding recipients from laundering tax dollars into “issue advocacy” campaigns indistinguishable from political organizing.  While we understand the reasoning of both suggestions, in the hope that issue-spotting how they could wind up being counterproductive, we flagged the risk that–in the hands of those running large federal funding recipients–they run the risk of serious consequences unintended by the Administration.

The ACR Project offered these comments to assist OMB in improving the proposal before its final issuance.