COST Act
- Sponsor
- Sen. Ernst, Joni [R-IA]
- Committees
- Homeland Security and Governmental Affairs Committee (primary), Small Business and Entrepreneurship Committee
- Last action
- Mar 18, 2026
Bottom line
The COST Act aims to increase transparency in federal spending by requiring clear public disclosure of funding sources for federally supported projects, while also creating new administrative and compliance burdens.
What it actually does
This bill, known as the COST Act, mandates that all federal agencies and recipients of federal funds (including state/local governments and research grant recipients) publicly disclose the percentage and dollar amount of federal and non-governmental funding for any program, project, or activity in most public communications. It also requires recipients to certify compliance in their performance reports and directs the Office of Management and Budget (OMB) to conduct annual compliance reviews and establish a public reporting mechanism for non-compliant communications.
Proponents argue
Proponents argue that this bill will significantly enhance transparency and accountability in how taxpayer dollars are spent, allowing the public to clearly see the federal contribution to various projects. They contend it will reduce waste, improve public trust, and ensure that credit for projects is accurately attributed, preventing agencies or other entities from obscuring the true source of funding.
Opponents contend
Opponents might argue that while transparency is a worthy goal, the bill imposes significant new administrative burdens and compliance costs on federal agencies and, more critically, on thousands of federal fund recipients, including state and local governments, universities, and non-profits. These compliance costs could divert resources from the actual programs and projects, potentially leading to less public communication or reduced efficiency in program delivery.
The bill is short and straightforward, making it highly accessible for a reader to understand its core provisions quickly.
Section 2(a), amending 31 U.S.C. 1356(b)
Mandatory Disclosure of Funding Sources
This provision requires any federal agency or entity receiving federal funds to clearly state in most public communications (e.g., statements, press releases, bid solicitations) the exact percentage and dollar amount of federal funds used for a project, as well as the percentage and dollar amount from non-governmental sources. This aims to provide a complete financial picture of federally supported activities.
Supporters argue
Supporters argue this provision is crucial for empowering taxpayers with knowledge about how their money is being used, ensuring accountability, and preventing misleading claims about project funding. It promotes a clearer understanding of federal investment.
Critics contend
Critics might contend that while the intent is good, the detailed disclosure requirements could be overly burdensome, especially for smaller entities or those managing numerous projects. The administrative overhead might detract from actual program delivery.
Tradeoffs
This provision balances the public's right to know with the administrative burden placed on federal agencies and recipients. It aims to maximize transparency but at the cost of increased compliance efforts.
Section 2(a), amending 31 U.S.C. 1356(c)
Compliance Certification Requirement
This section mandates that any individual or entity receiving federal funds must include a certification of compliance with the disclosure requirements as part of their regular performance progress reporting. This certification specifically covers communications, including those under 280 characters, which are otherwise exempt from the direct disclosure rule.
Section 2(a), amending 31 U.S.C. 1356(d)
OMB Compliance Review
The Director of the Office of Management and Budget (OMB) is required to annually review a random sample of public communications from both federal agencies and recipients of federal funds to check for compliance with the disclosure requirements. The findings of these reviews must then be made publicly available.
Section 2(a), amending 31 U.S.C. 1356(e)
Public Reporting Mechanism for Non-Compliance
Within one year of enactment, OMB must establish a public, anonymous mechanism for individuals to report communications that do not comply with the disclosure requirements. Such reports must include the non-compliant communication itself (or its location) and identifying information about the program or project.
The disclosure requirements apply to 'any statement, press release, request for proposals, bid solicitation, or other document describing the program, project, or activity, other than a communication containing not more than 280 characters.'
Section 2(a), amending 31 U.S.C. 1356(b)
Why it matters:This is a practical carve-out, acknowledging the limitations of platforms like Twitter where character counts are restricted, and is standard legislative practice to avoid overly burdensome requirements for brief communications.
Case for: Supporters would argue that this exception is a pragmatic approach, allowing for quick, informal communications without requiring full disclosure in every tweet or short social media post, which would be impractical and potentially hinder timely information dissemination.
Case against: Critics might argue that this exception creates a loophole, allowing entities to strategically use short-form communications to avoid full transparency, especially for potentially controversial projects where detailed funding information might be less desirable to highlight.
Estimated impact: This exception will significantly reduce the compliance burden for short digital communications, but it also creates a potential avenue for less transparent messaging in specific contexts.
The certification requirement for compliance with disclosure rules, which is part of performance progress reporting, explicitly 'include[s] a certification indicating whether the individual or entity complied with the disclosure requirements under subsection (b) with respect to communications containing not more than 280 characters relating to the program, project, or activity.'
Section 2(a), amending 31 U.S.C. 1356(c)
Why it matters:This is a legislative technique to ensure comprehensive accountability. While direct disclosure on short posts is impractical, the intent is to prevent entities from using the 280-character limit to entirely bypass transparency obligations. It's a standard way to ensure broad compliance without overly prescriptive rules.
Case for: Proponents would argue that this ensures the spirit of transparency is maintained even for brief communications. Entities cannot simply ignore the disclosure principle for short posts; they must still certify that their overall communication strategy, including short posts, aligns with the bill's goals.
Case against: Opponents might find this an overly broad and difficult-to-enforce requirement. Certifying compliance for every short communication could be an immense administrative burden, particularly for large organizations with many social media accounts or public-facing staff.
Estimated impact: This provision extends the accountability framework to all communications, regardless of length, by requiring a certification, potentially increasing the internal monitoring burden for recipients of federal funds.