Reports: OMB rescinds federal funding freeze

Editor's note: This is an updated version of an earlier story about the Trump administration's temporary pause on federal grants, loans and financial assistance.

The Trump administration has rescinded a freeze on federal grants, loans and other financial assistance that was announced by the Office of Management and Budget (OMB) on Monday, several national media outlets are reporting this afternoon. 

The OMB sent a brief memo today to announce it is rescinding its call for a temporary freeze on the federal funding, following mass confusion across the country, The New York Times, Washington Post and other national news media organizations are reporting. 

Yesterday, a federal judge temporarily blocked the freeze from taking place at least through Feb. 3.

The freeze, which OMB said was being implemented to review whether the funding was consistent with Trump administration priorities, would have included grants for transportation infrastructure projects approved with funding from the Infrastructure Investment and Jobs Act of 2021.

If enforced, the OMB's funding freeze would have included Federal Railroad Administration competitive grants such as those issued through the Consolidated Rail Infrastructure and Safety Improvements (CRISI) and Railroad Crossing Elimination (RCE) programs, according to the American Short Line and Regional Railroad Association. That would have impacted short-line project grantees.

"We think that it should be clear after a hopefully quick review that neither the CRISI program nor the RCE program are in conflict with any of the administration's policies or executive orders. For instance, the vast majority of short line CRISI projects are track rehabilitation and track construction and we don’t see any challenges there," said ASLRRA President Chuck Baker in an email.

What remains unclear, if the freeze is upheld after Feb. 3, is how the administration would review the funded programs — at the whole program level or at the individual project level, Baker said.

"Even if the review takes place at the individual project level, I don’t believe there are any project awards that should run afoul of the administration’s priorities," said Baker. "However, if every single project has to be reviewed and reconsidered, that could be a lengthy delay. There are hundreds of projects just in those two programs, and spread across the whole government the number of projects would likely run well into the tens of thousands."

Baker added that it would be "bad precedent" to allow a new administration to cancel or unnecessarily delay projects that have already been selected by the previous administration under the statutory criteria at the time, as long as the grantee is keeping up its end of the bargain.

"It’s one thing to change the criteria going forward or to make different types of selections in the next round than the previous administration would have made, that is their right and the expected consequence of an election," Baker said. "But to undo prior grants risks making the whole program less effective and predictable, and that uncertainty would make building infrastructure more expensive."

ASLRRA officials anticipate that Sean Duffy, who received U.S. Senate confirmation and was sworn in yesterday as the new U.S. transportation secretary, "would approach this with considered common sense and get projects reviewed and approved quickly," Baker added.