Federal courts ordered OMB to temporarily lift its plan to freeze all federal funding
More than $570 million for Colorado grantees is still inaccessible
WASHINGTON – U.S. Senators John Hickenlooper and Michael Bennet and Colorado Governor Jared Polis called on Office of Budget and Management (OMB) Director Russell Vought to address the more than $570 million in federal funding that remains inaccessible for Colorado grantees, following the OMB’s illegal attempt to pause all federal funding.
Two weeks ago, in a chaotic late-night, two-page OMB memo, President Donald Trump froze all federal grants and loans. The sudden freeze from this memo and multiple executive orders threatened hundreds of millions of dollars in federal funding, which would have affected thousands of organizations in Colorado and hurt millions of Americans. Federal courts ordered the Trump administration to temporarily lift the freeze on federal funds. However, over $570 million in federal funding obligated for Colorado organizations remains withheld.
“We write to express deep concern regarding the ongoing challenges Colorado grantees face in accessing obligated grant funding… The consequences of this continued uncertainty are severe and could have a devastating effect on the programs and people this funding supports,” wrote the lawmakers. “Companies are considering staff furloughs. Employers in rural communities are rescinding job offers. Long-standing Colorado businesses, some with over 40 years of operation, now struggle to pay contractors working on facility expansions.’
They continued: “This disruption threatens local economies and the workforce across the state, particularly in rural communities, where the funding freeze creates widespread ripple effects.”
In their letter, the Colorado lawmakers called on Vought to explain what steps OMB is taking to comply with the court orders and clarify which streams of funding did not immediately resume following the multiple court orders to halt the funding freeze.
More information about how a freeze would impact Coloradans is available HERE.
Last week, Hickenlooper spoke on the Senate floor against the nomination of Russell Vought, President Trump’s pick to lead the Office of Management and Budget (OMB), and voted “No” on Vought. The OMB oversees the performance of federal agencies and administers the federal budget. Vought previously served as acting OMB director during President Donald Trump’s first term and was a primary architect of Project 2025, which details MAGA Republicans’ far-right agenda to dismantle the federal government under a Trump administration.
Full text of the letter available HERE and below.
To Director Vought,
We write to express deep concern regarding the ongoing challenges Colorado grantees face in accessing obligated grant funding. Grantees who have signed contracts with federal agencies and have initiated projects now struggle to cover outstanding expenses. This disruption threatens local economies and the workforce across the state, particularly in rural communities, where the funding freeze creates widespread ripple effects.
On January 27, 2025, the White House Office of Management and Budget (OMB) issued a memorandum directing all federal agencies to pause activities related to federal financial assistance obligations and disbursements. Although this memo was quickly rescinded – and its implementation blocked by a federal court – the consequences of this funding freeze effort and the ongoing funding blockages through various executive orders continue to harm state and local governments, Tribal Governments, private companies, and the people we serve across the state, raising serious concerns about the future of these funds in Colorado.
We have engaged extensively with agencies responsible for disbursing these funds, and heard directly from the agencies that the Administration’s intention is to comply with the court order and dispense federal financial assistance. The Environment Protection Agency (EPA), for instance, has notified us that:
“[p]ursuant to the recent Court directive in the case of New York et al. v. Trump addressing financial assistance, the Court directed that federal financial assistance shall not be paused based on the Office of Management and Budget’s direction in the rescinded OMB memorandum or the President’s Executive Orders while ongoing litigation proceeds or until otherwise directed by the Court. Consistent with the Order, the EPA’s financial system will now enable the obligation of financial assistance. This includes programs within the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, including federal financial assistance in the State and Tribal Assistance Grants, Brownfields, and Superfund. Additionally, the disbursement of funds from EPA’s financial assistance programs is continuing.”
Nonetheless, companies, local governments, state agencies and nonprofit organizations entitled to funds from a range of programs continue to report that they cannot access their federal grant portals or receive reimbursements due to them under their federal grant contracts despite both the court order and the promises from the agencies. In some cases, grants appear as “suspended” or are missing entirely from their grant system. These funds have already been allocated, contracts have been signed, and work has begun – yet invoices remain unpaid. It remains to be seen how and when the Administration will comply with the court orders to remove the barriers to this funding across all agencies and programs.
In Colorado alone, we are aware that more than $570 million in obligated funding remains inaccessible. The consequences of this continued uncertainty are severe and could have a devastating effect on the programs and people this funding supports. Companies are considering staff furloughs. Employers in rural communities are rescinding job offers. Long-standing Colorado businesses, some with over 40 years of operation, now struggle to pay contractors working on facility expansions.
We want to relay the urgency needed to resolve these funding access issues and ensure grantees receive the resources that were appropriated by Congress and promised by the Administration. Communities, businesses, and families depend on this. To ensure transparency in this ongoing process, we ask that you answer the following questions by Friday, February 14, 2025:
- Please identify any forms of federal financial assistance for which federal funding disbursements did not promptly resume following the recission of OMB Memorandum M-25-13.
- For all forms of federal financial assistance that did not promptly resume, please describe the steps you have taken or will take to resume the disbursement of funds in compliance with court orders. Also indicate when the disbursement of funds can be expected to resume.
- For any disbursement of funds that have not been promptly resumed, what is your legal basis for continuing to withhold funds?
- What steps have you taken to identify and communicate with grant recipients who have been negatively affected by this oversight?
- What steps will you take to ensure that this issue does not occur again?
We appreciate your prompt attention to this matter.
Sincerely,
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