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The White House Office of Management and Budget (OMB) issued new guidelines Wednesday clarifying limits on the disbursement of Inflation Reduction Act (IRA) funds ordered by President Trump on Monday.
In one of the Inauguration Day executive orders, Trump ordered federal agencies to “immediately suspend disbursement of funds” from both the IRA and the bipartisan Infrastructure Act of 2021.
A complete halt in disbursement could jeopardize billions of dollars, including projects in red states and districts. The order drew immediate pushback from Democratic lawmakers such as House Energy and Commerce Committee Ranking Member Frank Pallone (D-N.J.), who denounced the move as illegal and “cost (costing) countless Americans their jobs.”
Some Republican allies also expressed reservations about the idea of a total shutdown of disbursements. Sen. Mike Crapo (R-Idaho), who voted for the bipartisan Infrastructure Act, he told Politico it was a “concern, but again I don’t know what concern,” he added “that doesn’t mean the payments won’t be made.”
In Wednesday’s memo, Trump’s OMB clarified that the pause “applies only to funds that support programs, projects, or activities that may be implicated by the policy set forth in section 2 of the order,” which includes funding related to climate change mitigation and incentives for electric vehicle charging.
“For purposes of implementing section 7 of the Order, funds supporting the ‘Green New Deal’ refer to any earmarking for purposes that contravene the policies set forth in section 2,” the memo states. “Agency heads may disburse funds as deemed necessary after consultation with the Office of Management and Budget.”
Trump has often falsely conflated Biden-era climate policies with the “Green New Deal,” an ambitious set of energy and environmental legislation backed by lawmakers such as Reps. Alexandria Ocasio-Cortez (D-N.Y.) and the Sen. Ed Markey (D-Mass.).
The memo comes the same day that Russell Vought, Trump’s nominee for OMB director, was questioned by Democrats on the Senate Appropriations Committee about the order. Vought, a lead author of the conservative political project Project 2025, said he would “defend the law” as director, but argued that the Reservoir Control Act of 1974, which limits the White House’s ability to restrict the funding approved by Congress, was unconstitutional.
