Please note this article has been updated with the latest developments. See more here.

The Office of Management and Budget (OMB) has issued an updated Memorandum clarifying the scope of the pause on federal programs issued last night, substantially narrowing it. The updated guidance specifies that the pause “is expressly limited to programs, projects, and activities implicated by the President’s Executive Orders, such as ending DEI, the green new deal, and funding nongovernmental organizations that undermine the national interest.”

OMB further states the pause is not an impoundment, that is, the Administration is not refusing to spend the appropriated funds, and more importantly, it specifically states that the pause does not apply to:

. . . any program that provides direct benefits to Americans is explicitly excluded from the pause and exempted from this review process. In addition to Social Security and Medicare, already explicitly excluded [emphasis added] in the guidance, mandatory programs like Medicaid and SNAP will continue without pause.

Funds for small businesses, farmers, Pell grants, Head Start, rental assistance, and other similar programs will not be paused [emphasis added]. If agencies are concerned that these programs may implicate the President’s Executive Orders, they should consult OMB to begin to unwind these objectionable policies without a pause in the payments.

While this clarification is reassuring for some programs, it still leaves questions on how implementation will proceed. Feldesman attorneys will continue to follow this pause and issue additional information as available. Please contact Mindy B. Pava, Scott S. Sheffler or Ted Waters for questions.

Additionally, be sure to join Feldesman’s upcoming webinar, “What Grantees Need to Know About the New Administration’s Executive Orders” on Tuesday, February 4, 2025, from 3:00 – 4:00 p.m. ET as Managing Partner Ted Waters and Partner Scott S. Sheffler go over all the recently enacted Executive Orders.