On Jan. 31, 2025, a federal district court in Rhode Island entered a temporary restraining order (“TRO”) prohibiting all federal agencies from pausing, canceling or terminating any awards or obligations as directed by an Office of Management and Budget (“OMB”) Memorandum published by the Trump administration on Jan. 27, 2025. The TRO applies to all federal financial assistance programs and requires such agencies to comply with the TRO immediately.
A summary of the key terms is provided below:
- Federal agencies cannot pause, freeze, impede, block, cancel or terminate any
awards or obligations on the basis of the OMB Memorandum, or on the basis of the
President’s recently issued Executive Orders. - This prohibition applies to all awards or obligations — not just those involving the
plaintiff states in the above-referenced case — and also applies to future assistance (not just current or existing awards or obligations). - Agencies may exercise their own authority to pause awards or obligations, provided
agencies do so purely based on their own discretion — not as a result of the OMB
Memorandum or the President’s Executive Orders — and provided the pause complies with all notice and procedural requirements in the award, agreement, or other
instrument relating to such a pause.
If the OMB Memorandum is allowed to proceed once the TRO expires, the Trump administration would be allowed to freeze funding that had already been approved by Congress. The freeze would not include assistance received directly by individuals such as Medicare, Social Security Benefits or Section 8 vouchers, but would include all assistance in the form of grants, loans, cooperative agreements, funding for housing construction, preservation of affordable housing, community development programs and many more.
It is important to note the temporary nature of this order, as the litigation is ongoing. We advise all agencies and recipients of federal financial assistance to seek guidance from legal counsel with any questions about the impact of this OMB Memorandum and TRO.
Harris Beach Murtha’s Public Finance and Economic Development Practice Group, Municipalities and Local Agencies, Real Estate Developers, and Energy industry teams (among others) are monitoring this development and related matters. For further details on how this proposed federal spending freeze might impact your projects, or if you have questions for our lawyers, please reach out to attorney Jeffrey Storch at (212) 912-3504 and jstorch@harrisbeachmurtha.com; attorney Michael A. Discenza at (212) 912-3605 and mdiscenza@harrisbeachmurtha.com; attorney Linnea Spagnoletti at (585) 419-8623 and lspagnoletti@harrisbeachmurtha.com; attorney Sean McCabe at (585) 419-8571 and smccabe@harrisbeachmurtha.com; or the Harris Beach Murtha attorney with whom you most frequently work.
This alert does not purport to be a substitute for advice of counsel on specific matters.
Harris Beach Murtha’s lawyers and consultants practice from offices throughout Connecticut in Bantam, Hartford, New Haven and Stamford; New York state in Albany, Buffalo, Ithaca, New York City, Rochester, Saratoga Springs, Syracuse, Long Island and White Plains, as well as in Boston, Massachusetts, Newark, New Jersey and Washington, D.C. For more information, visit www.harrisbeachmurtha.com.
