Latest Updates: Scroll down for new information on the federal funding pause.
The Office of Management and Budget (OMB) issued a memorandum on Jan. 29, rescinding a Jan. 27 order to pause federal grants, loans and other financial assistance.
“The Executive Orders issued by the President on funding reviews remain in full force and effect and will be rigorously implemented by all agencies and departments," White House spokeswoman Karoline Leavitt said in a statement Wednesday. "This action should effectively end the court case and allow the government to focus on enforcing the President’s orders on controlling federal spending.” Additional executive actions are expected in the coming weeks and months.
The executive orders include:
White House officials have communicated that any program not implicated by the Executive Orders above is not subject to the pause. Any program that provides benefits directly to individuals was not subject to the pause. And a list of the programs subject to the pause does not currently exist as they are still identifying how funds are being spent.
Additional key updates include:
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The reversal followed a federal judge's temporary stay on the initial pause on Jan. 28, which would have continued until Feb. 3 to provide time for thorough deliberation on the matter.
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On Jan. 28, the Office of Management and Budget released a follow-up Q&A document to clarify that the pause is not intended to stop all funding, but instead is “expressly limited to programs, projects, and activities implicated by the President’s Executive Orders, such as ending DEI, the green new deal, and funding nongovernmental organizations that undermine the national interest.”
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The office also clarified that the order does not apply to programs providing direct benefits to individuals, such as Social Security, Medicare, Medicaid and SNAP.
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Certain federal payment systems were inaccessible on Jan. 28. The administration reported that the system outage was unintended.
NCSL staff are actively engaging with state legislatures to assess the implications of these developments on state programs. They have also communicated with the White House to address concerns and gather insights. For ongoing updates, legislators and staff are encouraged to share their questions with NCSL via [email protected]. As the situation evolves, NCSL will continue to provide support and information to state legislatures navigating these changes.
Latest Updates
Feb. 10, 2025 | Justice Orders Trump Administration To Unfreeze Funds
Judge John McConnell of the U.S. District Court for the District of Rhode Island issued an order of enforcement against the Trump administration in New York vs. Trump. The order threatens criminal contempt if the administration does not restore frozen federal funds and reiterates the court’s prohibition of “all categorical pauses or freezes in obligations or disbursements based on the OMB Directive or based on the President’s 2025 Executive Orders.”
Feb. 4 | Court Temporarily Halts Trump Administration's Freeze on State Funding
Multiple courts are addressing the issue, including a temporary restraining order issued on Feb. 3 in the case of New York v. Trump. This order mandates that the Trump administration "shall not pause, freeze, impede, block, cancel, or terminate compliance with awards and obligations to provide federal financial assistance to the states. Furthermore, they shall not impede the states' access to such awards and obligations, except as permitted by the applicable authorizing statutes, regulations, and terms."
Jan. 31 | EPA Pauses Solar Funding
The Environmental Protection Agency sent letters to recipients of a nationwide solar program Jan. 28 informing them that their grants had been paused until further notice, E&E News by Politico reports. Solar for All program recipients—state and local government agencies and a few nonprofits—have signed contracts with the EPA amounting to $7 billion. The program is designed to help offset climate pollution and energy costs by financing community and rooftop solar in low-income communities.
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