Federal operational shifts often alter how programs are overseen, how grants are awarded and how federal agencies interact with their partners. When those federal shifts cascade through the system, they can slow processes, increase administrative burdens or disrupt the routines that states and localities depend on to deliver services.
That is why the Trump administration’s new president’s management agenda (PMA) warrants close attention. The new PMA signals priority changes that could alter oversight, grants administration, technology expectations and the relationship between federal agencies and state and local governments. Federal funds make up roughly one-third of state revenues and about 10 percent of local government budgets. Even modest procedural changes that lead to longer grant award cycles, new reporting expectations, program amendments or revised audit standards can create ripple effects across state and local budgets, staffing plans and service delivery systems.
Past versions of the PMA have repeatedly shaped how states and localities operate. The Obama administration’s focus on reducing improper payments, for example, led to the creation of new federal tools and standards for improving program integrity, and many states adopted similar verification processes and eligibility tools to align with federal expectations. These changes improved accuracy in benefit determinations for programs such as Medicaid and the Supplemental Nutrition Assistance Program (SNAP), while also reducing processing delays.
The significance of the new PMA lies in how federal agencies will translate it into shifts in oversight, grant administration and technology expectations. Those changes are likely to redefine the operating environment for state and local governments, making early preparation essential.
The president’s management agenda was introduced during the George W. Bush administration as a way to articulate federal management priorities at the start of each presidency. Over time, the PMA has become the federal government’s central tool for setting management direction. It influences how agencies define their performance goals, shape their budget submissions, interact with external partners and structure their internal processes. A federal decision to increase oversight, for example, can lead to new documentation or verification requirements. A federal emphasis on customer experience can lead to redesigned forms, streamlined application processes or new performance metrics. Changes to procurement or financial management rules can alter how grants are managed and how quickly funding flows. For state and local agencies with limited capacity, such shifts can affect their fiscal and operational systems in significant ways.
While each PMA reflects the priorities of the administration that issues it, several themes reappear across decades: improving program performance, modernizing technology, strengthening the federal workforce, enhancing accountability and reducing administrative burden.
Technology modernization has been one of the clearest through lines. During the George W. Bush administration, an emphasis on expanding e-government capabilities coincided with a period in which state and local governments were rapidly building their own digital services. By the mid-2000s, they had moved from basic informational websites to online payments, digital permit applications and early service portals.
More recently, the Biden administration’s PMA placed a strong emphasis on customer experience and equity. These themes influenced federal agencies as they redesigned forms, modernized digital interfaces and rethought how people navigate benefit programs. Because many state and local programs operate under federal oversight or rely on federal funds, these themes were reflected in state and local service delivery as well, encouraging those governments to map resident interactions, simplify application processes and reduce documentation burdens. The equity focus prompted agencies to examine disparities in program access and outcomes, redesign outreach efforts, improve demographic reporting, and strengthen efforts to reach underserved communities.
A More Values-Oriented Agenda
President Donald Trump’s first management agenda, released in 2018, followed a traditional structure: It included clear mission-support strategies, measurable performance goals and detailed cross-agency priorities. The 2025 version, by contrast, contains fewer operational details and implementation plans. It is shorter, more values-oriented and less operationally prescriptive than previous versions, organizing federal management priorities around three overarching goals:
“Shrink the Government & Eliminate Waste” — including reducing the federal workforce, consolidating real estate, eliminating programs viewed as ineffective or ideologically objectionable, and targeting what the document describes as waste, fraud and discriminatory or “weaponized” activities.
“Ensure Accountability for Americans” — emphasizing skills-based hiring, stronger performance management and expanded oversight of contractors and grantees. It also includes objectives related to what the administration describes as censorship, transparency and overclassification.
“Deliver Results, Buy American” — calling for improved procurement processes, greater domestic sourcing and expanded use of artificial intelligence and other technologies to modernize federal operations.
Impacts to Watch For
While the 2025 version of the president’s management agenda may be less detailed than the 2018 version, it nonetheless could have important impacts for state and local governments, including in the following areas:
Increased scrutiny of federal grants: The new PMA emphasizes stronger oversight of contractors and grant recipients. This focus is consistent with the actions last year to pause grants in some areas to ensure they aligned with administration priorities and take control of the process for posting grants online. Continued activity in this area could translate into more detailed reporting requirements, expanded audit activity and new compliance reviews. For state and local governments, these changes could alter application procedures, introduce new layers of federal review or shift how agencies interact with grantees throughout the award process.
Shifts in priorities and more political involvement: The management agenda’s focus on eliminating what it describes as discriminatory or ideologically driven initiatives suggests a continuation of earlier efforts to realign federal funding streams to match the president’s political priorities. This approach is aligned with last year’s executive order on “Improving Oversight of Federal Grantmaking,” which expanded political appointee involvement in reviewing and approving grants. Depending on agency implementation, this could influence how applications are prioritized, awards are timed and program objectives are defined. Programs in areas such as education, workforce development, public health and community development may see changes in eligibility criteria or award structures. State and local governments may need to reassess program design, adjust outreach strategies or revise administrative processes in response to new federal grant requirements.
New expectations for artificial intelligence: The new PMA’s emphasis on AI builds on recent federal actions, including an executive order aimed at limiting the ability of states and localities to impose new restrictions on the technology. But those measures also signal that federal agencies could broaden their own use of AI. This could potentially include incorporating AI more heavily into eligibility determinations, fraud detection, compliance oversight and customer service platforms. State and local governments that administer federally supported programs could face expectations to adopt compatible technologies or adjust data management practices to align with federal systems.
Potential updates to grants guidance and overhead costs: The agenda’s emphasis on reducing administrative waste and “demanding partners who deliver” may prompt revisions to the Office of Management and Budget (OMB)’s uniform grants guidance, particularly rules governing indirect costs. This would be a continuation of efforts from last year when federal policymakers directed certain research institutions to lower allowable overhead rates on federally funded projects. If this approach expands to a broader set of grants, states and localities could face revised indirect cost policies, tighter definitions of reimbursable administrative expenses or new expectations for documenting cost allocation. Even modest reductions in allowable overhead could strain local budgets or limit capacity, especially for smaller governments that rely on indirect cost reimbursement to sustain core operations.
Implementation Implications
The Office of Management and Budget leads the development and implementation of the president’s management agenda. The Obama-era focus on program integrity, for example, moved from a high-level priority into detailed agency guidance and performance metrics. Then agencies integrated these expectations into oversight structures, prompting states to update their systems in response.
Translating the new management agenda into operational actions may be more challenging since the document contains few measurable outcomes. In addition, several objectives (including those related to speech or political expression) are atypical for a federal management agenda and fall outside of OMB’s traditional management authorities. As such, agencies may find it difficult to develop consistent performance expectations or align internal processes with the agenda’s direction.
State and local leaders should monitor progress to understand how federal agencies interpret and implement the new president’s management agenda. This will be essential for them to anticipate changes, align operations and maintain effective service delivery in the face of potential changes to grant oversight, administrative rules and program funding.
Jed Herrmann is a director at Guidehouse, where he co-leads the firm’s grants management and program implementation practice. A senior fellow at the Center for Digital Government, he formerly served at the White House Office of Management and Budget.
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