A sweeping Office of Management and Budget proposal could jeopardize federal funding for a large swath of research and programs in Vermont — from medical research at the University of Vermont, to rural hospital funding, to research on flooding. “Unlawful DEI practices” would face a blanket ban under the rule.
Even the UVM’s ability to construct buildings that don’t vibrate and are suitable for molecular research could be impacted by the proposal, along with hundreds of other projects, according to a survey of researchers, academics and state officials by VTDigger.
“The proposed rules are bad for Vermont, bad for our schools, bad for our hospitals, bad for our state government, bad for our environment, and catastrophically bad for the science required to heal our ailing planet,” said Bennington College professor David Bond.
Federal dollars are the biggest source of funding for science and research in the U.S. In 2024, federal grants for states and municipalities totalled over $1 trillion in the U.S., according to government statistics. In Vermont, over one-third of the state’s $8.6 billion budget last year came from federal funds, according to a state task force’s report.
The way that money is handed out would fundamentally change under the proposal, which would make federal grants subject to review by senior political appointees. Under the proposal, political appointees would be tasked with ensuring that funding aligns with the “President’s policy priorities,” and the administration’s definition of “gold-standard science.” The current system, which includes a peer review process and evaluation based on intellectual merit and impact, would serve only an advisory role, according to the proposed rule.
Vermont Treasurer Mike Pieciak said in an emailed statement that the rule would politicize the grant making process. Changes to federal grants could affect funding for the state government, nonprofits keeping people housed, local municipalities rebuilding after flooding and rural hospitals providing care, he wrote.
“Vermonters pay their taxes, and in return, trust the federal government to deliver on its promises,” Pieciak wrote. “This rule change would effectively break that trust.”
The changes would likely face legal challenges, Pieciak added.
Under the rule, the federal government would be allowed to terminate research grants midway through a project if it no longer reflects program goals or the “national interest” at the time, and would only require a brief summary of the termination reasons. The rule is set to be implemented in October, though it may be amended in response to the hundreds of thousands of comments that streamed in during the public comment period.
In addition to affecting funding for research, the proposal would change a framework for assessing all federal grants, which could lead to funding uncertainty for many programs at the state and local level.
The rule would prohibit gender-based research or research on the “so-called ‘transition’” of people under the age of 19 to another sex. There would also be a prohibition of federal funding going toward research involving international collaborations.
Bond, the Bennington professor and associate director of Center for the Advancement of Public Action at the college, said that federal funding provided crucial support for research on PFOA contamination in the Bennington region and that the project required years of research and grant money.
The proposal could lead to clinical trials being shut down before completion, leaving patients and researchers in the lurch, according to Deborah Hirtz, a professor with UVM’s Larner College of Medicine, who previously worked as a program director for the National Institute of Neurological Disorders and Stroke. Human subjects in clinical trials for cancer or pregnancy research, who consent to risk exposure as participants, would be left without an answer about the treatment or issue being studied.
“All of these things are the result of years of research that builds up into a result which gives you something very important for people’s health, so to destroy this system is such a setback,” Hirtz said.
According to a summary of the rule, its goal is to provide transparency, accountability and oversight of federal grants. It is also designed to end discriminatory practices and to ensure that “American tax dollars are not wasted or misused,” according to the summary.
An Office of Management and Budget spokesperson wrote in an email that the rule ensures that projects receiving federal dollars are reviewed by officials who are accountable to the president and the American people, but does not supplant the peer review process.
“Federal grants were politicized under the last administration to promote a far-left DEI agenda with projects like drag shows in Ecuador and transgender experiments on mice,” a spokesperson wrote in an email to VTDigger. “That ends now.”
Hardy Merrill, deputy commissioner of Vermont’s Department of Finance and Management, wrote in an email earlier this month that it is unclear how the proposed rule would impact the amount of federal funds the state government and Vermont-based organizations receive. He said the department is concerned though that a deadline of Oct. 1 for meeting new administrative requirements could pose challenges.
“We are concerned that increasing administrative compliance burdens, especially if they are implemented on a short timeline, could make it more difficult for some entities, especially smaller organizations and municipalities, to access Federal program funding,” Merrill wrote.
Michael Del Trecco, Vermont Association of Hospitals and Health Systems president and CEO, wrote in a statement that Vermont’s hospitals look to federal grants to expand services. “When opportunities to access federal grant funding are reduced or eliminated, there is a risk that hospitals will have fewer resources available to support patient care and community health programs,” Del Trecco wrote.
For Vermont’s largest research institution, the change could impact the majority of research funding, which amounts to around a quarter of billion dollars every year, said Kirk Dombrowski, vice president of research and economic development at UVM.
That includes medical research on cancer and diabetes; agricultural research on dairy pesticides and food systems; climate research on forest health and flooding, as well as chemistry, biology and physics research, Dombrowski said.
The risk of termination of grants that require long-term planning, infrastructure and personnel would likely make the research university more cautious about the types of projects the institution takes on, Dombrowski said. For instance, research involving advanced microscopy, used to study singular molecules to understand cellular processes and diseases, requires the university to construct vibration-free buildings, Dombrowski said. If funding can be pulled at any time, the university wouldn’t want to take on the risk of large-scale infrastructure projects, he said.
The university has seen a slowdown in science grant funding in the past two years, Dombrowski said, and the amount of scrutiny proposals have faced in recent years is “at such a higher volume that it makes it feel categorically different.”
Nearly 8,000 federal scientific research grants had been terminated or frozen in 2025, according to reporting by Nature. The U.S. Department of Energy previously terminated $7 billion in funding for renewable energy in October 2025, including a $3.4 million grant UVM had received, prompting Vermont to join a coalition of states suing the Trump administration.
The rules could also impact nonprofit organizations’ projects in the state such as those conducted by the Vermont Center for Ecostudies in Hartford. Susan Hindinger, executive director of the center, said around a quarter of their work is funded by the federal government every year. The center lost $35,000 in federal funding for research in the Caribbean this past year tracking the Bicknell’s thrush, Hindinger said.
The grant review process should be “apolitical,” Hindinger said, and the current proposal could have “devastating impacts for the integrity of science” as political appointees do not have subject matter expertise like peer reviewers. Hindinger added that the new process for reviewing all federal grants will likely “gum up the works” and result in less research overall.
Housing and land conservation organizations could wind up losing time and resources if funding is cut mid-stream, said Gus Seelig, executive director of the Vermont Housing and Conservation Board.
Real estate deals for housing or conservation efforts in Vermont take a long time, requiring appraisals and working with landowners, and if a program is canceled before a closing, that could be “enormously wasteful,” Seelig said.
The changes to how the federal government will distribute grants could make it hard for preschool and early childhood centers to do their work, according to Morgan Crossman, executive director of Building Bright Futures and Vermont’s Early Childhood Data and Policy Center.
She said the new rule would also make it hard for small non-profits to know how much money they will receive, especially because funds will come as reimbursements rather than upfront funds. Among the services that could be impacted are the organization’s preschool development grant, which Building Bright Futures is using to distribute $8 million for childcare spots and childcare workforce training.
Crossman said she worries that programs serving rural communities could be cut because the administration has not clearly defined restrictions for diversity, equity and inclusion under the new rule. “Part of our job at Building Bright Futures is to monitor and to check whether public investments are actually reaching the families they’re meant for, including families in rural and low-income parts of the state,” Crossman said.
International collaboration would be a casualty under the proposal, according to Celia Chen, a Dartmouth research professor and aquatic ecologist. She said that her research into contaminants including mercury and PFAS relies on international collaboration and data, as these pollutants are transported atmospherically, so there are “no boundaries.” Chen voiced concern that the rule will spur a brain drain due to the lack of jobs and budget stability for research.
W. John Kress — a Vermont-based distinguished scientist and curator emeritus at the Smithsonian’s National Museum of Natural History — said he worries that the rule could cause the country to lose standing on the international stage for cutting edge research.
“We’re going to be much narrower in what we could do in terms of global science, and it’s going to impact our influence around the world,” Kress said.
