January 28, 2025
That was the new White House press secretary Karoline Leavitt talking about the controversial plan by president trump announced last night to put a temporary pause on all federal grant and loan programs.
While the press secretary did name some programs that won’t be affected – there are still tons of questions about other funding that she couldn’t answer. What about federal funds for veterans’ organizations? Does this include housing assistance, disaster assistance? What about state funding to help with education or infrastructure?
Look – there is a lot of confusion about this order. And the fact is – the white house has not given anyone any solid clarity. And when there’s lack of clarity – that leaves folks to guess and speculate about what’s happening and leaves them fearful that they will be impacted. I certainly do not have the answers but I do have the facts of what we know so far. And here it is.
Last night the office of management and budget issued this two page memo to every single executive department and agency of the federal government. This memo says under President Trump’s direction – all agencies must “temporarily pause all activities related to obligation or disbursement of all federal financial assistance”. Why? According to the white house, because in fiscal year 2024 – there was three trillion dollars of federal spending on some kind of financial assistance programs for Americans or American organizations. The memo says if taxpayer money is being use those financial assistance programs should be advancing the trump administration priorities not “Marxist equity, transgenderism, and green new deal social engineering policies.” The memo says by 5 p.m. eastern today — every government agency and department must “each agency must pause: (i) issuance of new awards; (ii)disbursement of federal funds under all open awards; and(iii) other relevant agency actions that may be implicated by the executive orders, to the extent permissible by law, until OMB has reviewed and provided guidance to your agency with respect to the information submitted.” Then by February 10th each one of those agencies and departments must provide a comprehensive list of all those programs and activities so that it can be reviewed to make sure that basically – it’s Trump approved.
Ok – there are a few things to clarify here – one – the press secretary said repeatedly this order would not impact federal funding that directly goes to individuals…but the question is – what about the federal funding that goes to organizations and charities that then distribute that money to individuals. The press secretary would not give specifics. Instead she kept saying this.
I have yet to see that list. When I get it I will make sure you have it too.
The other thing to clarify is the legality of this. There are many in congress and many state attorneys general who say this move by trump is blatantly illegal. Why? Because this money was already approved by a law passed by congress and signed by a president. Lawmakers say the constitution gives them the power of the purse and if congress approves funding for something and the president signs the law – which president Biden and all the presidents before him have – then President Trump can’t just on his own decide not to distribute that money.
The other important part of this that you need to understand is – there’s a separate law that prevents the president from doing this specific thing. It’s called the impoundment control act of 1974. This law reasserted congress’s constitutional power of the purse. This law specifically prevents the president and other government officials from unilaterally substituting their own funding decisions for those of the congress. This law was passed in response to what congress saw as President Nixon’s executive overreach during his term.
Now – several non-profit organizations and several states attorneys general have already sued the Trump administration looking for a judge to pause this freeze on federal funding for grants and loans. I’m sure there will be more.
Read the 2-page OMB memo here.
Read the OMB clarification memo here.
