New York Note: OMB Memorandum on Temporary Pause of Financial Assistance Programs

Yesterday evening, January 27, 2025, Matthew Vaeth, the Acting Director of the Office of Management and Budget (OMB), distributed a Memorandum to all federal department and agency leaders, instituting a temporary pause on nearly all federal financial assistance programs. Below, please find additional details on the process for the corresponding review, along with information on the specific federal accounts under investigation. While the Cozen O’Connor Public Strategies team is actively engaging our clients on the full series of Executive Orders issued over the past eight days, if your organization has any relationship with the federal accounts specified by OMB, we strongly encourage an immediate dialogue on efforts we can undertake to mitigate any disruption to the execution of awards or the flow of federal funding.

Available to Provide Immediate Risk & Strategy Support

Cozen O’Connor Public Strategies stands ready to immediately assist current and
prospective clients with a comprehensive funding risk assessment and strategy assessment to identify areas of concern, determine risk, and engage with the Trump Administration, including agency officials, and Congress to address issues with federal financial assistance.

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Purpose of Temporary Pause and Review

According to the OMB memorandum, the Administration is seeking to evaluate all federal financial assistance (federal funding) for compliance with Executive Orders that have been issued by President Trump since January 20, 2025. While several sectors of federal funding are already subject to a longer federal pause, such as the 90-day “stop-work orders” issued by the State Department for nearly all foreign aid funding on January 24, 2025, this particular order pertains to nearly all federal departments, offices, agencies and subagencies.

The review is both reactive and proactive. Each government subdivision must review programs for both their applicability to previously issued Executive Orders, as well as broadly for their potential to advance President Trump’s agenda. Pertinent Executive Orders include the following:

• Protecting the American People Against Invasion (Jan. 20, 2025)
• Reevaluating and Realigning United State Foreign Aid (Jan. 20, 2025)
• Putting America First in International Environmental Agreements (Jan. 20, 2025)
• Unleashing American Energy (Jan. 20, 2025)
• Ending Radical and Wasteful Government DEI Programs and Preferencing (Jan. 20, 2025)
• Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government (Jan. 20, 2025)
• Enforcing the Hyde Amendment (Jan. 20, 2025)

Timeline for Review

Pause Effective – January 28, 2025 at 5pm EST

Intervening Period – During the next 13 days, all agencies must pause all open Notices of Funding Opportunity (NOFOs), halt any new awards, cease disbursement of any additional federal funding under existing awards, and suspend any other agency actions that could be covered by the President’s Executive Orders.

Submission to OMB – By February 10, 2025, agencies are expected to submit a report to OMB that contains further detailed information and analysis of each account subject to the pause, as well as identifying “any legally mandated actions or deadlines for assistance programs” that could occur during the temporary pause.

OMB Review – OMB is expected to review the documentation provided by February 10, 2025, and will provide guidance to each agency individually.

Agency Review – Agencies are further instructed beyond February 10, 2025 to utilize “senior political appointees” to ensure federal financial assistance conforms to the President’s Executive Orders, and seeks to grant these officials broad authority, including the capability to revise prospective or current programs and related materials, as well as potentially cancel awards found to be in violation of the Executive Orders.

End of Temporary Pause – No specifics have been given on the end of the temporary pause. We take the lack of specifics to mean that OMB will be clearing programs, projects and agencies per their review and notify agencies as these federal assistance programs can be restored.

Federal Assistance Subject to Review

All federal assistance is subject to review. OMB has identified programs, per 2 CFR 200.1, as any grant, cooperative agreement, non-cash contribution or donation of property, direct appropriations (including community funding projects), food commodities, loans, loan guarantees, interest subsidies, and insurance. The memorandum further identifies any other government assistance administered by recipients or subrecipients as being included in the review.

Please download this list of applicable programs, organized by agency, that has been circulated for review. We encourage all clients to review the list to assess their exposure to both the temporary funding pause, and the subsequent review of their specific funding by agency officials.

Federal Assistance Excluded from Review

The OMB memorandum specifically exempts any federal assistance that is directly received by an individual, as well as any federal assistance that impacts Medicare or Social Security benefits. At this time, we do not believe that Medicare or Social Security are globally exempted, just funding that has implications for individual benefits.

In response to concerns expressed overnight, OMB has issued a very brief FAQ that has extended the exclusion from the temporary pause to Medicaid, SNAP, small business programs, farm programs, Pell grants, Head Start, rental assistance, “and other similar programs.”

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