How Some Federal Grantees Are Impacted by the Unleashing American Energy Executive Order

This post was originally published on January 23, 2025 by Grants Works for its Federal Grant Insights newsletter on LinkedIn.

In the Unleashing American Energy executive order (EO), the current president orders all agencies to “immediately pause the disbursement of funds appropriated through the Inflation Reduction Act of 2022 (IRA) or the Infrastructure Investment and Jobs Act of 2021 (IIJA) better known as the Bipartisan Infrastructure Law.

The EO goes on to note that this pause includes but is not limited to funds for electric vehicle charging stations made available through the National Electric Vehicle Infrastructure Formula Program and the Charging and Fueling Infrastructure Discretionary Grant Program.

During the pause, agencies will need to review their processes, policies, and programs for issuing grants, loans, contracts, or any other financial disbursements of the appropriated funds "for consistency with the law and the policy outlined in section 2 of this order. "

Within 90 days of the date of the EO, all agency heads must submit a report to the Director of the National Economic Council and the Director of the Office of Management and Budget (OMB) with their findings and recommendations on how to align with the EO.

Important Detail To Note: No funds shall be disbursed by a given agency until the Director of the OMB and Assistant to the President for Economic Policy have determined that such disbursements are consistent with any review or recommendations they have chosen to adopt.

That means thousands of infrastructure, renewable energy, workforce development and apprenticeship, broadband, environmental remediation, research, and other projects have been paused.

What Are the IRA and the IIJA?

The Inflation Reduction Act and the Infrastructure Investment and Jobs Act (aka the Bipartisan Infrastructure Law) were passed by Congress and signed into law by President Biden.

In a blog I wrote in October 2022, I summarized the IRA. The IRA was signed into law by President Biden on August 16, 2022 and its stated aim is to reduce the federal deficit, reduce the cost for prescription drugs, health care and energy, and make significant investments in clean energy and environmental programs. IRA authorized $891 billion in total spending and a lot of that spending was awarded as federal grants to states, nonprofits, Tribal and territorial governments, businesses, school districts, and colleges and universities.

The IIJA (Bipartisan Infrastructure Law) was signed into law by President Biden on November 15, 2021. It authorized $973 billion in federal funds for “all modes of transportation, water, power and energy, environmental remediation, public lands, broadband, and resilience.” It was often described as “the most comprehensive infrastructure law passed by Congress in decades.” Check out the August 2022 blog summarizing the IIJA, Build.gov, the Building A Better America Guidebook, and much more.

The current president will soon announce his own infrastructure investment plans.

How Are Federal Grantees Impacted by the EO

As I mentioned above, recipients of this funding include states, colleges and universities, businesses, and others. Many are likely at a standstill while they wait for details on the validity of their current grant and cooperative agreements and the ability to access funds for expenses already incurred. Many are also pausing their projects and deciding what to communicate to their subawardees, contractors, and other partners.

As I wrote earlier, several of our current clients are impacted by this and other executive orders and we’re staying abreast of updates and advising them accordingly.

Impoundment

According to a recent article by Canary Media, it was reported that the new president’s OMB Director, Russell Vought, believes that presidents can choose to withhold federal funds appropriated by Congress through impoundment.

The article goes on to explain that Vought’s belief “challenges the constitutionality of a law passed in 1974 barring the president from interfering with Congress’ constitutionally defined power over taxing and spending.” A consultant quoted in the article noted that the grants authorized by the IRA and IIJA are not discretionary, they are mandatory which may complicate matters even further.