OMB Memo on Freezing Federal Financial Assistance

Earlier this week the White House Office of Management and Budget released a memo temporarily freezing all obligations and disbursements related to federal financial assistance.
 
Agencies were required to submit information to OMB on all such programs, with the exception of direct payments to individuals, by February 10, 2025. Several Presidential Executive Orders were referenced in the memo related to the Green New Deal, DEI, Wokeness, etc., implying any programs running afoul of such Executive orders would need to be altered before they could continue.
 
Yet the memo and its freeze applied to all federal assistance programs. On the following day, after many questions and an outcry from affected parties, OMB issued a clarifying memo on programs that would be exempted because they benefited individuals, such as Medicaid disbursement to states and funding for small businesses, farmers, Head Start, rental assistance and others.
 
The confusion, however, continued when yesterday OMB rescinded the entire memo. Still, further confusion developed when the White House press secretary announced that while the memo had been rescinded the freeze on programs remained. This led a second federal judge to place an injunction on the implementation of the memo due to the confusion.
 
To make a long story short, federal agencies are still being required by OMB to submit information on financial assistance programs, including AFG and SAFER, to determine if they run counter to the numerous Presidential Executive Orders. 
 
At initial review, we do not believe that AFG and SAFER would be subject to any of the President’s Executive Orders, although our review continues. Click here for the instructions. 

This clearly is an evolving situation which is most likely not entirely resolved. If OMB freezes funds for any period of extended time, the issue of “impoundment” will come into play and the Administration risks being in violation of the Impoundment Act of 1974.  
 
Please stay tuned for more information as it develops.