By Beth C. Neitzel , Noah C. Shaw , James M. Gross , Howard Weiss| Foley Hoag Environmental Practice | Feb 14, 2025
As we warned in a January 29 client alert, President Trump’s Executive Orders and the subsequent Office of Management and Budget (OMB) memorandum ordering federal agencies to “temporarily pause” any and all funding disbursements and obligations were “just the beginning.” Despite the purported rescission of the OMB memorandum and two court orders enjoining its implementation, the status of federal funding is, if anything, even more tenuous two weeks later.
The Administration’s Shifting Positions
Since late January, federal funding recipients have lived in a state of perpetual whiplash. As reported by states and other organizations, federal grantees have lost access to their funds, then temporarily regained access, only to again see their accounts suspended—all on the basis of unknown or shifting rationales.
The Government’s changed positions are too many to recount, particularly when it comes to climate and infrastructure funding appropriated through the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA). To briefly recap, on January 20, Trump issued the “Unleashing American Energy” Executive Order (“the Energy EO”), which directed federal agencies to “immediately pause the disbursement of funds appropriated through the [IRA] or [IIJA].” OMB then issued Memo M-25-11, reiterating the executive order’s “immediate[] pause” of what they dub “Green New Deal” funding. And on January 27, 2025, OMB issued Memo M-25-13, which states in relevant part that:
to the extent permissible under applicable law, Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.Litigation ensued, with twenty-two states and the District of Columbia bringing a federal suit in Rhode Island, and several nonprofit organizations filing a separate lawsuit in Washington, D.C. Each lawsuit challenged the legality of OMB Memorandum M-25-13 and sought a temporary restraining order prohibiting the Government from withholding funds pursuant to the directive. (Two weeks later, on February 13, the States expanded their pleadings to directly challenge and enjoin the Energy EO’s funding-freeze mandate, OMB Memo M-25-11, and other related executive actions.)
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