January 28, 2025: FAQs on the federal funding "pause"
Yesterday, the White House directed all federal agencies to pause all federal grant, loan, and financial assistance programs. This will have immense, harmful implications for individuals and communities nationwide. Below, I outline some key questions—some of which we can answer, many of which we cannot—and the potential effects this pause will have. We will continue to monitor this, along with our partners, and will provide timely updates as more information becomes available.
First, a disclaimer: this analysis is based on currently available information, which is limited. Additionally, I am cognizant that this broad directive will impact millions of people who depend on federal funding for food, shelter, and other necessities. Nothing here should be construed as an instruction for any person or entity to stop using federal funds they have received.
What funding did the administration pause?
The White House’s memo requires all federal agencies to “temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities” to review them for alignment with the President’s priorities.
The memo does not identify specific federal funding programs to pause and only identifies extremely narrow exemptions (more on that below). Agencies reportedly received additional information this morning with specific questions to consider and accounts to examine, but it is not clear yet whether this guidance will narrow the memo’s impact.
As a result, agencies may respond by cutting off funding for innumerable programs Congress has funded. I’ll get into some possible examples below.
What kinds of federal funds are covered here? Are we just talking grants?
In addition to federal grants, the White House’s directive covers cooperative agreements, direct appropriations, food commodities, loans, insurance, and more.
Specifically, the memo defines “federal financial assistance” to include all forms of assistance listed in paragraphs (1) and (2) of the definition of this term at 2 CFR 200.1, and assistance received or administered by recipients or subrecipients of any type except for assistance received directly by individuals.
The memo doesn’t specify whether states are included in the definition of recipients—more on why that matters below.
What funding isn’t cut off?
The memo states, “nothing in this memo should be construed to impact Medicare or Social Security benefits” and purports to exempt “assistance provided directly to individuals.” Again, I’ll dive deeper into this below.
Give me some examples—what funding might stop flowing?
In the realm of grants alone, we could be talking about cancer research funded by the National Institutes of Health; funding for community health centers; funding to get lead out of drinking water at schools and child care centers—this list goes on and on. It’s hard to underscore just how sweeping this is.
The White House claims to exempt “assistance provided directly to individuals.” However, a lot of federal funding that ultimately goes to individuals is administeredby another entity. For example, states and tribes administer the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), which gives low-income moms and babies resources to buy nutritious foods and infant formula, along with other services. Because this federal assistance is not given directly to individuals, this memo could be interpreted to cut off WIC funding. Indeed, WIC is listed among the programs the White House has told agencies to examine.
Does this only apply to new federal funding going forward?
No. The memo halts the “issuance of new awards” and “disbursement of Federal funds under all open awards.” This means that agencies must stop sending out funding that’s already been awarded.
What if a federal agency is currently considering applications for federal funding?
The memo instructs agencies to pause all activities to consider applicants for funding opportunities, too.
When does the pause go into effect?
Today, January 28, at 5:00PM.
When will the pause be lifted?
The memo does not say.
It directs agencies to report to the White House by February 10 (in less than two weeks), describing the programs the pause implicated. The memo does not say when the White House will review that information or decide whether or not to lift a funding pause. At the same time, guidance issued to agencies this morning asks for “all planned obligations and disbursements through March 15, and asks for a response by Feb. 7.”
Who will decide whether this pause gets lifted?
The memo does not say, but it seems like the White House, plus Trump loyalists installed at agencies.
While the White House will get the reports mentioned above, the memo also directs all agencies to, for every federal financial assistance program, “assign responsibility and oversight to a senior political appointee to ensure Federal financial assistance conforms to Administration priorities.” So, presumably, a Trump appointee will also have a role in deciding whether to let funding out the door or hold it back.
What does it mean to “conform” to administration priorities?
The memo doesn’t define this—so, it could mean whatever the administration wants it to mean.
The memo specifically condemns “the use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies.” It also refers to several executive orders issued last week, including those targeting funding from the Infrastructure Investments and Jobs Act (IIJA) and Inflation Reduction Act (IRA) and diversity, equity, and inclusion (DEI) programs.
Additionally, the guidance issued today poses the following question, among others: “Does this program support any activities that must not be supported based on executive orders issued on or after January 20, 2025 (including executive orders released following the dissemination of this spreadsheet)?”
Presumably, this means the administration will gauge whether a given federal funding program adheres to its policy vision—however it chooses to define that—and previous and future executive orders, then decide whether funding can continue to flow.
Is this legal?
No. A coalition of state attorneys general has announced that they will sue the administration later today.
Please stay tuned for further information as it becomes available. You can sign up for future updates here. As always, your feedback is appreciated, as is your patience as we all work to navigate emerging issues.
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Addendum
Given the pace at which information is emerging about last night’s federal funding freeze and the ensuing (justified) confusion around its implications, I wanted to share a short addendum to the update I circulated earlier today.
The White House has indiscriminately cut off resources families and communities depend on, whether they claim they have or not.
Folks may have seen a follow-up White House memo that leaked earlier today, which claims that certain funding was not frozen, such as Medicaid. This does not mean that these programs aren’t impacted.
For example, there have been several reports that Medicaid portals have gone down nationwide, jeopardizing health care for more than 72 million Americans. Myriad more examples are circulating regarding veterans’ housing, community health centers, Meals on Wheels, and more. In addition, the House Appropriations Committee’s Democratic Staff has released a helpful fact sheet describing additional funding the White House has cut off and what that means for the public.
Bottom line: do not assume the memo walking back this funding freeze has “unfrozen” funding. Check with the entities (states, localities, nonprofits, etc.) that administer federal funds where you live to verify this.
We and our partners will continue to share updates on this topic. You can sign up to receive those updates here. Please take care of yourselves.