OMB Q&A Regarding Temporary Pause Executive Order
In implementing President Trump’s Executive Orders, OMB issued guidance requesting that agencies temporarily pause, to the extent permitted by law, grant, loan or federal financial assistance programs that are implicated by the President’s Executive Orders.
Unleashing American Energy
This Executive Order (EO) has wide possible impacts on federal funds appropriated from the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) as it paused all distributions for programs that relate to Section 2, which references the elimination of vehicle subsidies and electric vehicles (EV) mandates among other broad energy principles.
Local governments have received and were planning to apply to IRA and IIJA programs authorized by Congress for infrastructure and equipment, and all distributions paused for the transition. While OMB further clarified the impact is limited to programs related to Section 2 of the EO, the full scope of IIJA and IRA various programs impacted is unknown at this time.
Lack of stability and waiting for clarity on infrastructure programs can have outsized costs to local budgets and delay their economic benefits. Cities have already been putting aside local revenues to match the federal investment for these infrastructure projects, and federal agencies pausing or clawing back programs can lead to cost overruns as local governments keep projects waiting and inflation continues to weigh down project budgets.
Ending Radical and Wasteful Government DEI Programs and Preferencing
This Executive Order will impact federal grant programs that address equity and vulnerable populations that are targets for service by the grant awards. Grant programs that aim to address equity goals, especially those that include equity factors in the application and sub-granting award process, will likely be impacted.
A broad interpretation may unintentionally include essential technical assistance and community support grants that support economic development and infrastructure programs oriented toward rural and disadvantaged communities.
Regulatory Freeze Pending Review
This order halts new regulation proposals until reviewed by a department or agency head appointed after the start of President Trump’s second term. This would also withdraw unpublished rules for review. Such a regulatory review is customary by new administrations and could prove beneficial to local governments where there are rulemakings that NLC has raised concerns about.
America First Trade Policy
This memorandum mandates that multiple reports be made to the President by April 1, 2025, covering trade deficits, unfair practices, United States-Mexico-Canada Agreement (USMCA) impact, eliminating loopholes in export controls, and more.
Depending on the content of these reports, local governments could potentially incur higher costs in construction and materials through subsequent trade adjustments until new trade agreements are in place.
Initial Rescissions of Harmful Executive Orders and Actions
This order rescinds 78 of the Biden Administration Executive Orders and Presidential Memorandums on the topics of COVID-19, diversity, climate, immigration and others.
For example, the order rescinds the Biden Administration Executive Order 13986. In doing so, the Trump Administration may attempt to make the decennial U.S. census only account for U.S. citizens. This would likely undercount the individuals that local governments are serving in their communities regardless of citizenship status, inaccurately determining the impact of the populations in various areas across the nation, which could result in disproportionate federal fund disbursement and inaccurate data collection.
The order also rescinds the Biden Administration Executive Order 14008, which established the Justice40 Initiative and created a whole-of-government approach to addressing climate change. Without a federal partner or federal commitment to addressing climate change, it makes it harder for cities to meet their own climate action goals. Disadvantaged communities are no longer prioritized for 40% of all federal infrastructure/climate funding.
Council to Assess the Federal Emergency Management Agency
The Executive Order establishes the “FEMA Review Council” composed of up to 20 members, including the Secretary of Homeland Security and the Secretary of Defense, tasked with assessing and enhancing FEMA’s effectiveness.
The purpose of the council is to address concerns about FEMA’s performance, political biases, and mission focus. It is responsible for evaluating FEMA’s disaster responses over the past four years, comparing them with responses from other sectors, and providing recommendations for improvements. The council’s recommendations could lead to significant reforms in FEMA operations and programs, potentially impacting how FEMA assists local governments on disaster mitigation, response and recovery in the future.
Delivering Emergency Price Relief for American Families and Defeating the Cost-of-Living Crisis
This memorandum orders federal agencies to deliver emergency price relief for American consumers and to take action to increase prosperity for American workers. Specific policy areas for de-regulatory intervention to lower costs include housing development and home rental and purchases, healthcare, retail appliances, food, and fuel. To assist workers, agencies are required to advance actions to draw discouraged workers into the labor force and to eliminate costs related to climate policies.
Executive Orders on Immigration
There are a half dozen Executive Orders on Immigration that affect municipal governments including:
Guaranteeing the States Protection Against Invasion
Designating Cartels and Other Organizations as Foreign Terrorist Organizations and Specially Designate Global Terrorists
Protecting the American People Against Invasion
Securing Our Borders
Realigning the United States Refugee Admissions Program
Emergency at the Southern Border of the United States
Generally, and collectively, the impact of these actions is on local authority, local public safety and law enforcement operations, some financial and legal implications and supporting the needs of individual communities.
These actions could significantly pressure local government programs related to law enforcement and public safety and could place additional demands on local resources and agencies as they respond to potential federal initiatives and community impacts stemming from these designations.
Specifically, threats to withhold federal funding to pressure local governments to comply with federal immigration enforcement are concerning to the autonomy of local authority and principles of federalism under the 10th Amendment.
Please review these resource pages with your municipal professionals for specific impacts on your municipality. This resource page does not provide nor intend to provide legal advice to cities, towns and villages. It is meant for educational purposes only. As developments warrant, we will share further information.
Contact: Paul Penna, Director of Government Affairs, ppenna@njlm.org, 609-695-3481, x110.