aamc.org does not support this web browser.
  • Washington Highlights

    OMB Issues and Rescinds Memo Ordering Pause of Federal Funding

    Sinead Hunt, Senior Legislative Analyst
    For Media Inquiries

    The White House Office of Management and Budget (OMB), on Jan. 29 issued a memo (PDF) rescinding an OMB memo (PDF) from two days earlier directing all federal agencies “to the extent permissible under federal law” to “temporarily pause all activities related to the obligation or disbursement of all Federal financial assistance, and other relevant agency activities, that may be implicated by the executive orders [issued recently by President Trump].”  

    The funding freeze memo referenced several executive orders recently unveiled by the president regarding immigration, diversity, equity, and inclusion programs, and gender identity, among other topics [refer to Washington Highlights, Jan. 24], and explicitly exempted the Medicare and Social Security programs from the pause. The memo directed federal agencies to submit additional information about the programs and activities affected by the pause to OMB by Feb. 10. 

    In a Jan. 28 guidance document (PDF), the OMB clarified that the pause and review process will not apply to any program that “provides direct benefits to Americans,” including mandatory programs like Medicaid and the Supplemental Nutrition Assistance Program. Separately, the Federal Student Aid Office of the Department of Education published a Jan. 28 electronic announcement clarifying that the temporary pause does not impact Higher Education Act Title IV student aid funds provided to individual students.  

    In response to a lawsuit seeking to block implementation of the memo, a federal judge in Washington, D.C., issued an administrative stay on the memo until at least 5 p.m. on Feb. 3. The OMB subsequently rescinded the original memo but directed agencies to contact their general counsels for guidance on continuing to implement the executive orders. Another federal judge presiding over a second lawsuit filed in Rhode Island by state attorneys general indicated on Jan. 29 that he intends to issue an injunction on the funding freeze after plaintiffs revise their suit to reflect the funding freeze rather than the memo itself.