As the new Administration prepares to enter the White House, we are keeping a close eye on the President-elect’s appointees.  For individuals and organizations administering or receiving federal grants, appointments to the Office of Management and Budget (“OMB”) are of utmost importance.  OMB not only helps the President create the annual budget, but is also responsible for the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”).  Moreover, the OMB reviews every prominent regulation proposed by an executive agency.

The Office of Management and Budget

OMB is an office within the Executive Office of the President and is primarily responsible for assisting the President in creating and executing the annual budget.  Throughout the fiscal year, OMB offices assess the effectiveness of federal programs, weighing programmatic needs against the President’s policy initiatives and desires.  After Congress enacts the budget, OMB transitions to providing guidance to the executive agencies as they develop regulations and policies to support their programs.  OMB’s Budget Review Division (“BRD”) analyzes the “consequences of aggregate budget policy,” as well as playing the primary role in implementing the President’s budget.  BRD also follows congressional activity to determine its spending trends.

A secondary function of OMB is to review the major regulations promulgated by the executive agencies.  In 1993, President Bill Clinton issued the Executive Order 12866 giving OMB the authority to review agency proposals and final regulations in an effort to better coordinate the numerous federal regulations.  In particular, Executive Order 12866 empowers OMB to ensure (i) that proposed regulations are consistent with applicable laws and the President’s priorities, and (ii) that one agency’s regulations do not conflict with another agency’s policies or actions.

OMB’s regulatory review function is assigned to its Office of Information and Regulatory Affairs (“OIRA”).  Under Executive Order 13610, OIRA is further empowered to work with agency heads to review existing regulations to determine which regulations “should be modified, streamlined, expanded, or repealed.”  Information concerning OIRA’s current prospective and retrospective reviews can be found at http://www.reginfo.gov.

OMB also has a significant role in both federal procurement and grant management activities.  The Office of Federal Procurement Policy (OFPP) reviews executive agency’s policies regarding acquisitions, while the Office of Federal Financial Management (OFFM) works to improve financial management systems by reducing improper payments and promoting better grants management.  Together, in fiscal year 2015, federal procurements and grant expenditures exceeded $1 trillion.  Primarily, OFPP reviews proposed changes to the Federal Acquisition Regulation (the “FAR”) and each agency’s proposed supplements to the FAR.  OFFM “is responsible for the financial management policy of the Federal Government,” and is notably is responsible for the Uniform Guidance.

Announced Appointments

On December 16, 2016, President-elect Donald Trump selected Republican Congressman Mick Mulvaney (South Carolina) as his nominee for OMB Director.    No nominees have yet been announced for the positions of Administrator of OIRA, OFPP or OFFM.

Representative Mulvaney won his Congressional seat in 2010 as part of the “Tea Party wave,” co-founding the House Freedom Caucus in 2015.  The Caucus consists of approximately 40 conservative members of the House of Representatives.  Mr. Mulvaney is currently on the House Financial Services Committee and the Committee on Oversight and Government Reform.

Mr. Mulvaney has a reputation as a “budget hawk,” supporting deficient reduction policies on both sides of the aisle.  He has strongly advocated for cuts to Social Security and Medicare, arguing that both are headed towards bankruptcy and must be reformed.  He has expressed support for Paul Ryan’s “A Better Way” health care plan and believes that Medicaid should be given as a block grant to the States.  On Facebook, he has questioned the need for government-funded health research.

Mr. Mulvaney has worked with Democrats to push for defense spending cuts.  He has avidly opposed the “Overseas Contingency Operations” fund.  In 2013, he proposed reducing the fund by $3.5 billion.

He has also expressed support for a balanced budget amendment to the U.S. Constitution, Congressional term limits (12 years for each chamber), anti-earmarking policies, and a commission to eliminate, modify, or update outdated regulations.

Mulvaney’s confirmation hearing date has not yet been set.

If you have questions about Mulvaney’s appointment, OMB, or general Federal Grants issues, please contact the Federal Grants Law group at Feldesman Tucker Leifer Fidell LLP, www.ftlf.com or 202-466-8960.