Update on January 28,2025 at 3:04 p.m. PT
A federal district judge granted an administrative stay on Tuesday afternoon, temporarily blocking part of the federal funding pause minutes before it was set to begin. The stay, which only applies to disbursements on open grants, remains in effect until a hearing scheduled for Monday, February 3 at 11:00 AM.
White House orders broad pause of federal funding programs
A memorandum issued by the Office of Management and Budget (OMB) on January 27 requires federal agencies to temporarily pause disbursing funds and issuing new awards across all federal financial assistance programs. This pause, which takes effect January 28, 2025 at 5:00 PM, halts payments on existing grants and stops new grant reviews while agencies align their programs with President Trump’s policies and requirements.
Breaking down the $3 trillion impact
In Fiscal Year 2024, federal financial assistance accounted for more than $3 trillion of federal spending. The pause stops payments and new awards for grants, cooperative agreements, non-cash contributions, direct appropriations, food commodities, loans, loan guarantees, interest subsidies and insurance. Medicare and Social Security benefits are not impacted.
What agencies must do now
During this pause, federal agencies cannot:
- Make payments on existing awards
- Issue new awards
- Review grant applications
- Continue merit review panels
- Process funding opportunities
The review specifically focuses on programs involving foreign aid, nongovernmental organizations, DEI initiatives, gender-related programs and environmental projects.
Critical deadlines and exceptions
Federal agencies must submit detailed information to OMB by February 10, 2025 on all affected programs and activities. The OMB may grant exceptions for new awards or other actions on a case-by-case basis. Agencies may continue administrative actions required by law.
How BPM can help
BPM is monitoring the federal funding pause and its impact on organizations receiving federal assistance. As clients face challenges with reimbursements and federal fund drawdowns, our team is ready to provide guidance. Organizations impacted by this pause should reach out directly for additional information.
