UPDATE — January 28, 2025, 4:15 p.m. MT:
A District Court Judge in Washington, DC, has delayed the Office of Management & Budget directive to pause federal grant and finance programs pending agencies’ review and alignment with Administration priorities.
U.S. District Judge Loren AliKhan issued a “brief administrative stay” in the freeze as nonprofit and healthcare groups filed suit against the Trump Administration. The Judge’s order lasts until Monday, February 3, and only covers funds that congress has already appropriated.
Judge AliKhan cited the “specter of irreparable harm” should funding be paused, suddenly, and that the additional time is necessary as cases are pending. The stay does not touch on whether the funding freeze itself is legal.
Original Story — January 28, 2025, 10:30 a.m. MT: Federal Grant and Loan Programs to be Halted for Review (AASD)
Federal agencies were informed of the sweeping pause and ordered to review programs in a White House Office of Management and Budget (OMB) memo issued late Monday. The directive impacts all federal grant and finance activities – including grant funding that has been awarded but not sent yet, any program open for application (with an open “Notice of Funding Opportunity”), and awarding any new funding. The flow of funding for individual assistance programs, specifically Medicare and Social Security, will not be impacted.
What does this mean? — Special districts (and all local governments) that have received award letters for any federal program but have not received funding are impacted, as these funds are included in the freeze. There is no guarantee that obligated funding will be carried through and awarded upon the review’s conclusion.
The memo further states that federally agencies may “to the extent permissible by law, cancel awards already awarded that are in conflict with Administration priorities.” In other words, grants already in-progress could be canceled if the program funding the project is not consistent with the Administration’s priorities.
AASD will cover this news and more during our virtual Q1 Public Policy Coffee
on Thursday, January 30, at 11 a.m. ET / 8 a.m. PT.
Register here (No cost for AASD Members)
Anticipated notices of funding opportunities will be delayed, such as the Adequate Fire and Emergency Response (SAFER) program, which was expected in the final week of January. Further, any funds special districts were anticipating on a pass-through basis via a state or county, such as transportation, water utility infrastructure, community development, rural healthcare, and more, are also paused for review of priority alignment. This includes disaster and hazard mitigation programming to state and local governments (not individuals).
In the memo, Acting OMB Director Matthew Vaeth, told federal agency heads that $3 trillion of the $10 trillion in federal dollars spent went toward grant and loan programs and called for a review of how this money spent. Specifically, Vaeth wrote that funding should be used to:
- Focus on Trump Administration priorities.
- “Advance a stronger and safer America.”
- Combat inflation and reduce the cost of living.
- Boost American energy production and manufacturing.
- End “‘wokeness’ and the weaponization of government”
- Drive efficiency in government operations.
- “Make America Healthy Again.”
Details will continue to emerge. AASD will monitor this news and update our members as it continues to develop in the coming days and over the weeks ahead.
Email contact@americasdistricts.org for questions or concerns.
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