On Monday, Jan. 27, 2025, the White House Office of Management and Budget (OMB) issued a memo halting all federal grants and loans. The pause mandates that federal agencies review their programs to ensure compliance with President Trump’s executive orders.
The memo requires a comprehensive report from federal agencies no later than Feb. 10, 2025 to identify which programs, projects and activities may be implicated under any of the president’s executive orders. In the meantime, they are required to 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 is able to review and provide guidance to the agency.
In conjunction with the memo, OMB provided more specific instructions to agencies regarding compliance with the directive which includes a full list of programs on which agencies are to report – and which could be affected by the pause. Notably for the security industry, this includes most homeland security grant programs, as well as infrastructure grants through U.S. Department of Transportation agencies. At least some federal grant program administrators sent instructions to grant recipients on Tuesday, Jan. 28, to temporarily curtail spending.
OMB Memo Rescinded, Freeze Remains in Place
On Jan. 29, 2025, the OMB office rescinded its Jan. 27 memo ordering a pause in federal grants until agencies can review programs and projects for consistency with President Trump’s executive orders (EOs) pertaining to federal funding. However, White House officials subsequently clarified that while the memo (which was subject to Court injunction) was rescinded, the freeze was not, and that the EOs on federal funding “remain in full force and will be rigorously implemented.”
The original directive sparked widespread confusion among grant recipients and criticism on Capitol Hill, with both Republicans and Democrats expressing concern for protecting congressional appropriations authority, which prompted OMB to release a Q&A document on Tuesday in an attempt to clarify the scope, stating that “any program not implicated by the President’s Executive Orders is not subject to the pause,” and specifying “DEI, the green new deal, and funding nongovernmental organizations that undermine the national interest” as programs, projects and activities implicated by priorities in the executive orders.
Nevertheless, the National Council of Nonprofits and other organizations took action in court against the Office of Management and Budget for failing to explain the source of OMB’s legal authority, citing “immediate nationwide harm and disruption” from the guidance. Just minutes before the directive was supposed to take effect at 5:00 p.m. EST on Tuesday, Jan. 28, a federal judge issued an administrative stay, blocking the funding freeze until Monday, Feb. 3, when another court hearing is scheduled to consider the issue.
While much remains unclear, we understand that so far some agencies and programs have lifted their freeze by allowing drawdowns to resume, while others have not yet done so. This indicates the process for review and implementation of the EOs with respect to grants may vary agency-by-agency, at least at the moment.
For this reason, it is advisable to pay close attention to any program-specific guidance and instructions directed to grant recipients. Some available analysis indicates the freeze should not be interpreted as a stop work order unless recipients are specifically directed otherwise, and that further legal action challenging these policies very likely. SIA will continue to keep members updated as events warrant.
Jake Parker is senior director of government relations for Security Industry Association. The original version of this post appeared on SIA’s website and is used with permission.