This week, the Continuing Appropriations and Extensions Act, 2027 (the “2027 Continuing Resolution”) became law. Continuing Appropriations and Extensions Act, 2027, H.R. 6500, div. A, § 157(a)–(c), 119th Cong. (2026) (enacted Sept. 2, 2026) (the “2027 Continuing Appropriations Act”). The 2027 Continuing Appropriations Act keeps the U.S. government open until December 11, 2026. It also immediately prevents the U.S. government from finalizing the overhaul of federal grant regulations.
Section 157 of the 2027 Continuing Appropriations Act places restrictions on the Office of Management and Budget’s (“OMB”) proposed rule, Regulation for Federal Financial Assistance, published on May 29, 2026. Regulation for Federal Financial Assistance, 91 Fed. Reg. 32,198, 32,198–32,305 (May 29, 2026) (the “Proposed Rule”). The Proposed Rule would substantially revise the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, commonly known as the “Uniform Guidance,” principally codified at 2 C.F.R. 200, as well as numerous agency-specific regulations in Title 2 of the Code of Federal Regulations.
OMB had proposed issuing a final rule effective by October 1, 2026, the first day of fiscal year 2027. Section 157 forecloses that timetable. Through December 11, OMB may not issue or finalize that rule or a substantially similar rule. 2027 Continuing Appropriations Act, § 157(a). The statutory pause provides federal grant recipients more time to operated under current guidance, as well as providing OMB additional time to consider the administrative record. The administrative record is unusually large. The OMB received 496,606 comments, including the American Bar Association (“ABA”) comments urging OMB to withdraw the proposed rule in its entirety as well as legal and technical issues raised by the ABA Section of Public Contract Law.
Congress framed the restriction on the Proposed Rule broadly. Section 157 applies not only to the precise rule proposed on May 29, but also to any “substantially similar rule,” limiting OMB’s ability to avoid the statutory restriction through revisions or repackaging of the proposal. Congress also addressed the possibility of a rule being finalized before enactment: any covered rule issued or finalized before the Continuing Resolution became law “shall not have force or take effect” through December 11, 2026. Id. § 157(b). And because Section 157 became effective immediately upon enactment, the prohibition is already operative. Id. § 157(c).
The pause, however, is temporary. Section 157 does not prevent OMB from reviewing the 496,606 comments, evaluating revisions, or preparing for potential action after December 11, and it does not displace currently applicable statutes, the existing Uniform Guidance, agency regulations, or award terms and conditions, including current regulations under the promoting human flourishing in foreign assistance policy. Federal award recipients therefore should treat December 11 as a critical date: unless Congress extends or replaces the restriction, OMB could potentially resume the rulemaking process after the statutory bar expires.
For further assistance on federal grantmaking matters, contact Muriel Moody Korol or Joshua Schnell.
