(NewsUSA) - Proposed rule changes at the Office of Management and Budget (OMB) could weaken the research enterprise that underpins American technology leadership, according to experts at the Special Competitive Studies Project (SCSP), a nonprofit, nonpartisan initiative that makes recommendations to strengthen America's long-term competitiveness in emerging technologies.

OMB has proposed the most sweeping revision in years to the regulations governing federal grants and research awards. SCSP has filed formal comments urging the agency to revise the rule before finalizing it.

Accountability for taxpayer dollars is not optional, and SCSP supports OMB's stated goals of transparency, research integrity, and stewardship, said Ylli Bajraktari, president of SCSP, in a recent article. Political accountability and scientific expertise are not enemies. But applied without clear limits, the rule risks damaging the innovation engine that has been the backbone of America's scientific success, he said.

The new regulations contain several concerning provisions, said Bajraktari. Specifically, "Senior political appointees would review every discretionary award, reviewers would be directed to weigh presidential policy priorities, peer review would be explicitly downgraded to 'advisory,' and agencies could terminate active research awards simply because priorities changed after the work began," he said.

The stakes are measurable, according to SCSP's 2026 Tech Competition Scorecard, which found that China holds a decisive overall lead in robotics for advanced manufacturing, and that the narrow U.S. lead in quantum is eroding under Beijing's coordinated, state-backed strategy. Meanwhile, the federally funded share of national research and development dropped by nearly one-third between 2010 and 2019, and federal AI research spending remains far below the $32 billion annual level recommended by the National Security Commission on Artificial Intelligence. America already faces a funding gap, Bajraktari said, and should not compound it with a confidence gap.

The proposed changes take their cues from a termination-for-convenience model of government contracting, but research grants are different, Bajraktari emphasized. A research grant supports multiyear experiments, doctoral researchers, and laboratory partners using custom equipment and generating data over time. Stopping that work midstream destroys value that reimbursement cannot recover. The losses also reach companies, investors, national labs, and startups that make decisions based on whether federally funded research is stable and merit-driven.

"When award decisions look political rather than technical, or when a grant can vanish because priorities shifted, private partners hedge, talent looks elsewhere, and the whole geometry of innovation weakens," said Bajraktari.

SCSP's comments ask OMB to consider four points before finalizing any changes to how research grants are handled.

• Keep merit at the center. Scientific and technical merit, evaluated by qualified experts, should remain the primary basis for selecting research proposals. Senior appointees have a legitimate oversight role in compliance, security, and program fit, but should not substitute their judgment for expert evaluation of scientific quality, and any override should be documented in writing against published criteria.

• Make awards durable. Competitively awarded research grants should not be terminable simply because policy priorities changed after the fact. Reserve termination for legal violations, security concerns, or performance failures, and give recipients a chance to respond and to wind down responsibly.

• Account for the private sector. Before changing how research awards work, agencies should ask whether the change will deter co-investment, interrupt commercialization pathways, or push globally mobile talent toward America's competitors.

• Assess the competitive impact. OMB's own analysis counts only paperwork costs and calls them modest. Forgone discoveries and deterred capital are real national security costs even when they never appear as a line item, so major changes to federal research policy should come with a technology-competitiveness impact assessment.

SCSP also urged OMB to slow down. An October 1 effective date would impose new selection and termination frameworks on fiscal year 2027 awards before agencies have built the procedures to implement them well, Bajraktari said.

Visit scsp.ai to learn more.