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On January 29, White House press secretary Karoline Leavitt announced that the freeze of federal grants and loans issued on Monday by Matthew J. Vaeth, the acting director of the Office of Management and Budget, would be lifted. The freeze was intended to give incoming political appointees a chance to scrutinize each program before it continued forward by the Trump Administration.
The OMB memo told agencies to examine which programs conflict with Trump’s executive orders to halt government spending that falls under “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”
The pause was scheduled to take effect on Tuesday at 5 p.m. to give Department Heads and political appointees a chance to review about $3 trillion in on-going federal grant and loan programs. Just before 5 p.m. U.S. District Judge Loren L. AliKhan enjoined the action pending a hearing on Feb. 3. Her order was in response to a lawsuit filed by a number of nonprofits that receive federal grants.
At the Feb. 3 hearing, Judge AliKhan said, ““I don’t want to hide the ball. I will note that I am leaning in favor of finding this not moot, because we do have, as recently as last night, individuals who are unable to access funding platforms.” She asked the nonprofits and health organizations suing to propose language for the scope of her order by early Monday afternoon, which they quickly did, and the government to respond within three hours.
Meanwhile, 22 mostly Democratic-led states and the District of Columbia filed a request for a temporary restraining order to block the policy that they said could have a devastating effect on their budgets. Just minutes before Chief U.S. District Judge John McConnell in Providence Rhode Island was set to rule on this request, Leavitt announced the policy rollback. Leavitt said “in light of the injunction” OMB is pulling back its memo “to end any confusion on federal policy created by the court ruling and the dishonest media coverage.”
Acting OMB Director Vaeth, in a new memo issued January 29, wrote, “OMB Memorandum M-25-13 is rescinded. If you have any questions about implementing the President’s Executive Orders, please contact your agency General Counsel.”
As a result, Judge McConnell found the Press Secretary’s statements to be confusing and asked the parties to propose how to word a new restraining order. On Friday, January 31, Judge McConnell granted a temporary restraining order. McConnell ordered the federal government not to “pause, freeze, impede, block, cancel, or terminate” funding promised to the states while the order is in place, unless any other laws apply. McConnell writes in his order, “Are there some aspects of the pause that might be legal and appropriate constitutionally for the Executive to take? The Court imagines there are, but it is equally sure that there are many instances in the Executive Orders’ wide-ranging, all-encompassing, and ambiguous “pause” of critical funding that are not. The Court must act in these early stages of the litigation under the “worst case scenario” because the breadth and ambiguity of the Executive’s action makes it impossible to do otherwise. The Court finds that, based on the evidence before it now, some of which is set forth below, the States are likely to succeed on the merits of some, if not all, their claims.” McConnell’s order will remain in effect until he can rule on a motion for a preliminary injunction.
On Feb. 3, the Department of Justice filed a notice confirming with Judge McConnell that all affected federal departments were notified of his order. However, the pleading noted:
“Defendants do not read the Order to prevent the President or his advisors from communicating with federal agencies or the public about the President’s priorities regarding federal spending. Nor do Defendants construe the Order as enjoining the President’s Executive Orders, which are plainly lawful and unchallenged in this case.”
All of President Trump’s Executive Orders remain in effect, but grants and loans can now continue absent further action. Meanwhile, press reports that a number of National Science Foundation peer review panels that meet to award new grants have cancelled their meetings for this week. National Institute of Health panels were also cancelled through at least February 2.
Cornell President Kotlikoff and Provost Bala issued a statement on the evening of January 28 stating:
“Our best advice is to not interrupt ongoing programs by pausing research or grant spending on existing awards, absent specific instructions from federal agencies. It is vital that we continue this important work in partnership with our federal sponsors, unless otherwise directed.”
In essence, each federal research grant is a contract between Cornell and the federal government. The contracts are not only detailed and lengthy, but they also incorporate many pages of federal regulations by reference. If the new administration wishes to change the standard terms of federal research grants, particularly on the topics mentioned in the OMB memo, the grant-funding agencies can simply amend their regulations. However, that process takes time and the efforts to have OMB skip over those necessary legal steps drew the legal challenges.
Many of the detailed research grant provisions require Cornell and the grant’s research team to comply with various federal laws. It is not clear whether an Administration goal was to reduce the number of requirements or to increase them. In any event, it is important for Cornell to maintain credibility with all research funding agencies, including complying with both “specific instructions” and statutory provisions.
RELATED: Research Continues to Build Cornell’s Stature
Cornell will continue to monitor and lobby on proposed legislation, including budget appropriations, that affect research grants. Cornell receives $636.5 million per year in federal research grants.
Cornell is offering a new website to update the community on implementation of recent Executive Orders.
