UPDATE: January 29, 2025
OMB Acting Director Matthew Vaeth released a memorandum this morning which rescinds OMB Memorandum M-25-13 that called for a temporary freeze on some federal grants and contracts.
January 28, 2025
The Office of Management and Budget (OMB) has issued Memorandum M-25-13, directing all federal agencies to pause the obligation and disbursement of financial assistance programs. The directive, signed by Acting OMB Director Matthew J. Vaeth, is part of a broader effort to align federal spending with the priorities of President Donald J. Trump’s administration.
Key Highlights of the Memorandum:
Temporary Pause: Effective January 28, 2025, at 5:00 PM, federal agencies must halt activities related to grants, loans, and other financial assistance programs unless mandated by law.
Presidential Priorities:
The pause allows for a comprehensive review of programs to ensure federal funding supports the administration’s goals, including strengthening national security, promoting American energy and manufacturing, and eliminating initiatives tied to diversity, equity, and inclusion (DEI), as well as other initiatives deemed inconsistent with the administration's objectives.
Scope:
The memorandum applies to all federal financial assistance except individual entitlements such as Medicare and Social Security. It also impacts open Notices of Funding Opportunity (NOFOs), which are now on hold pending further guidance.
Agency Actions Required:
Agencies must assign oversight of financial assistance programs to senior political appointees, review and potentially modify or cancel existing awards, and submit detailed reports to OMB by February 10, 2025.
The memorandum explicitly links this review to a series of executive orders issued on January 20, 2025, emphasizing a pivot away from previous policies associated with equity, environmental initiatives, and gender ideology.
What’s Next?
Federal agencies must submit program analyses and compliance updates to OMB for evaluation. Exceptions to the pause may be granted on a case-by-case basis. The administration has clarified that this directive does not affect statutory deadlines or legally required actions but aims to enhance oversight and efficiency in federal spending.
For further details, read the full OMB memorandum.
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