Regulatory Alert: White House Issues Order Temporarily Pausing Federal Financial Assistance; Impact on Airports Unclear
January 28, 2025
Yesterday evening, the White House’s Office of Management and Budget (OMB) reportedly issued a memorandum directing each federal agency, including the Federal Aviation Administration (FAA), to “temporarily pause” all activities related to the “obligation or disbursement of all Federal financial assistance” that may be implicated by any of the executive orders signed by President Trump since he took office last week. Neither the White House nor OMB has publicly released the memorandum, although multiple news outlets have shared a copy of it and published stories on the pause.
Based on our review of the memorandum, which can be viewed here, we do not believe the OMB directive requires FAA to temporarily pause activities associated with any airport-specific grant programs, including the Airport Improvement Program (AIP) or funding made available through the Infrastructure Investment and Jobs Act (IIJA), known as the Bipartisan Infrastructure Law (BIL). None of these programs appear to conflict with the policies outlined in President Trump’s executive orders. We have already urged FAA to take this position as they evaluate the directive. However, the impact on airports remains unclear, and we have requested clarity from the administration. In the event that impacts may be expected, we will provide further updates.
Summary of the OMB Memorandum. In the memorandum, OMB directs each agency to conduct a “comprehensive analysis” of all their federal financial assistance programs to “identify programs, projects, and activities that may be implicated by any of the President’s executive orders.” OMB further requires: “In the interim, to the extent permissible under applicable law, Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders.” (Emphasis in original and added.)
According to the memorandum, the pause applies to the issuance of new awards and disbursement of federal funds under all open awards, although the pause should occur “to the extent permissible by law.” Agencies may receive an exemption from OMB or issue new awards or take other actions on a case-by-case basis. OMB indicates that the temporary pause will take effect today, January 28, at 5 p.m. Agencies are required to complete their analysis and submit to OMB information on any program, project, or activity subject to the pause by February 10. The pause applies until OMB has reviewed the information provided and provides further guidance to the agency.
Initial Reaction and Analysis. Based on our review of the memorandum, there are three primary takeaways.
- First, we do not believe the AIP or any of the BIL-related airport programs implicate the policies stated in any of the executive orders issued by President Trump since he took office. In the memorandum, OMB specifically referenced “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal” as areas of concern. FAA’s grant programs do not implicate these stated areas of concern or any of the other major policies outlined in the orders. We have strongly urged FAA to take this position, but as of this writing, the agency has not provided any clarification or guidance on how they are interpreting the memorandum.
- Second, the OMB memorandum specifically states that the “temporary pause” should occur “to the extent permissible under applicable law.” We do not believe it would be consistent with the law for the administration or FAA to pause the disbursement of funds or processing of payment requests made under grant agreements that airports have executed with FAA.
- Third, the OMB memorandum is distinct from last week’s executive order that directed each federal agency to “immediately pause the disbursement of funds” appropriated through BIL and the Inflation Reduction Act (IRA) to ensure each program is consistent with the Trump administration’s new energy policy goals. You can find additional details in our January 22 Regulatory Alert. In that case, OMB clarified that the BIL funding pause was only directed at specific grant programs in contravention of President Trump’s energy policies. In response, FAA did not pause any BIL-related airport programs. We believe the newest directive from OMB should be similarly interpreted by FAA.
