Trump admin’s attack on clean energy and climate funding continues

This week saw the Trump administration launch and then pull back a far-reaching attempt to halt the flow of Congressionally mandated funds to causes the president opposes.

But while the administration walked back this sweeping order that affected trillions of dollars for programs from Medicaid to Head Start, it has not pulled back an earlier one focused specifically on freezing climate spending from the Inflation Reduction Act and 2021 bipartisan infrastructure law. That means the hundreds of billions of dollars in energy, climate, and environmental spending authorized by those laws remains at risk.

Legal and policy experts have attacked the bid to halt spending from these laws — and from federal programs in general — as an attempt to usurp Congress’ constitutional spending authority.

Most of the grant spending from the bipartisan infrastructure law and the IRA has been ​“obligated,” or legally committed under contract. Under existing law, federal agencies and the president have strict limits to their discretion to halt or restrict the flow of obligated funds.

The Trump administration seems intent on challenging those long-standing rules. Russell Vought, President Donald Trump’s nominee to run the Office of Management and Budget, is a co-author of The Heritage Foundation’s Project 2025 and has said repeatedly that the Impoundment Control Act of 1974, which sets those limits, is unconstitutional.

So long as the administration continues to press for the freeze of already-obligated money — be it for clean-energy projects or replacing lead pipes for drinking water systems — the efforts and Vought’s claims will face a legal test. Experts expect this battle to go all the way to the Supreme Court.

So far, despite Wednesday’s pullback on its broad spending freeze, there’s every indication that the Trump administration intends to continue pressing its claim of expansive power over spending.

In the short term, that means continued chaos for the specific programs Trump is still singling out — like those funded by the IRA and infrastructure law. In the long term, if courts rule in favor of the administration, Trump’s moves could vastly expand the power of the presidency and weaken that of Congress.

Recapping the rollercoaster week

Late Monday night, the Trump administration’s Office of Management and Budget issued a memo to federal agencies ordering a pause on all grants and loans to give the administration time to ​“identify programs, projects, and activities that may be implicated by any of the President’s executive orders.”

That blitz of orders in the administration’s first week includes one titled ​“Unleashing American Energy,” which contains the pause on IRA and infrastructure law funding under a section called ​“Terminating the Green New Deal.”

Democratic lawmakers, civic groups, and public officials immediately challenged Monday’s memo as illegal and unconstitutional. A federal judge on Tuesday temporarily blocked the spending freeze for existing programs, and the Trump administration rescinded its memo on Wednesday.

But the pullback was accompanied by a statement from White House press secretary Karoline Leavitt that ​“executive orders issued by the president on funding reviews remain in full force and effect and will be rigorously implemented by all agencies and departments.”

In a social media post, Leavitt expanded on that statement, writing ​“This is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo. Why? To end any confusion created by the court’s injunction.”

State attorneys general representing 22 mostly Democratic-led states and the District of Columbia, who joined a lawsuit seeking to halt the spending freeze, seized on Leavitt’s statements in a Wednesday hearing in federal court, saying they indicate the Trump administration intends to continue to withhold funds. The judge agreed and invited the attorneys to submit a proposal for a temporary restraining order to halt the freeze.

Payment portals: Choke points for federal funds

Organizations reliant on federal funding breathed a sigh of relief after the Trump administration withdrew its Monday memo.

“Layoffs averted. The letters were going to be going out this afternoon,” Dennis Osmer, CEO of Central Coast Energy Services, a California-based nonprofit that assists low-income individuals with energy bills, told Canary Media in a Wednesday email.

Still, it remains unclear if every federal agency has taken action to unlock funds, including restoring the online portals that grantees use to draw money to pay ongoing expenses.

Some grant recipients, including states seeking Medicaid reimbursement and education providers seeking Head Start funds, reported on Tuesday that the federal portals used to pay expenses had stopped working. But despite the Trump administration’s backpedaling and federal judges’ decisions, the Environmental Protection Agency’s funding portal had not been turned back on as of Thursday morning.

That’s according to Zealan Hoover, former senior advisor and director of implementation at the EPA under the Biden administration. Hoover said that EPA grantees with binding contracts to access federal funds have sought to withdraw money from EPA’s funding platform, only to find that it is down due to an ​“application error” and referring them to a technical-assistance hotline.

EPA has awarded about $69 billion in grants from the infrastructure law and the IRA, the vast majority of which are disbursed through the portal in question, he said.

One group awarded a grant from the IRA’s Climate Pollution Reduction Grants program told Hoover that it remained unable to access funds through the portal on Wednesday and was halting billable work for the foreseeable future until it can ​“gain more clarity about funding availability.”

“One of the most wasteful things you can do in infrastructure construction is shut down work and then start it back up again,” Hoover said. 

He shared this screenshot of the portal, taken Wednesday evening.

Recipients of EPA’s $7 billion Solar for All program, which supports solar projects to reduce energy bills in underserved communities, also couldn’t access the EPA’s funding platform, E&E News reported Thursday. Several recipients of funds from the IRA program said they received letters from the EPA saying it was working with the Office of Management and Budget to restrict ​“all funding actions” as per the Trump administration’s executive order.

Phone calls to EPA’s Washington, D.C., media-relations line yielded a voice message stating the number is no longer in service. An EPA representative in Washington, D.C., responded to a Wednesday email by referring Canary Media to the U.S. Department of Justice. A Justice Department public affairs officer reached via email on Thursday declined to comment.

The link between these reported experiences with the EPA funding portal and the Trump administration’s funding-freeze orders remains unclear. But NOTUS reporter Anna Kramer said in a Tuesday social media post that an EPA official told her that the agency ​“has paused all funding actions related to the Inflation Reduction Act and the Infrastructure Investment and Jobs Act at this time.”

In Hoover’s view, shutting off federal agency grant portals amounts to an attempt to ​“illegally throttle the flow of funding.”

Very few grantees get a check for the entire amount of their grant when it’s awarded, he explained. States, cities, tribes, and nonprofits instead regularly draw funds from federally managed accounts to cover costs like payroll and rent.

Grant agreements signed by agencies create a legal obligation for the federal government to pay grantees, according to a January memo from Harvard Law School’s Environmental and Energy Law Program. For that obligation to be met, funds must at some point pass through a payment portal.

Many federal agencies, including EPA and the Department of Energy, which is responsible for the majority of federal clean-energy grant programs, use the Automated Standard Application for Payments (ASAP) platform, a web-based electronic payment and information system developed by the Bureau of the Fiscal Service and the Federal Reserve Bank of Kansas City.

“When an awardee is ready to spend grant money, they request funds in ASAP and generally receive the money within one business day,” the Harvard authors wrote. However, the money in ASAP ​“remains in federal control until spent, and agencies can review ASAP requests before granting them.”

The Harvard memo also lays out how the executive branch can and can’t legally interfere with these disbursements, as established by court decisions and by the Impoundment Control Act. Simply put, beyond clearly defined temporary circumstances, the president can’t refuse to spend money that Congress has ordered.

But Hoover pointed out that ​“before you even get to the Impoundment Control Act, there’s a very clearly established, properly implemented regulation that has been governing grants for many years — and it very clearly says you cannot shut off the payments.”

Federal grantees must be paid in advance if they are in good standing with appropriate financial controls, Hoover said. While some grantees may be required to submit reimbursement requests rather than access funds in advance, federal regulations require they be paid back within 30 calendar days ​“unless there is a reasonable belief that the request is improper,” he said.

“If they went through on a case-by-case basis and identified fact-specific, grantee-specific issues and placed individual grantees into reimbursement status, that would be their right,” he said.

“But that’s not what they’re doing. They’re pausing for policy reasons,” Hoover said — and ​“the Impoundment Control Act makes clear that the executive branch cannot slow down implementation of programs for policy reasons.”

A looming legal struggle

The Trump administration’s freeze on infrastructure law and IRA spending gives final discretion to reinstate spending to the heads of the White House Office of Management and Budget and the National Economic Council.

Vought, Trump’s OMB nominee, wrote a section of Project 2025 that argues federal agencies are ​“increasingly weaponized against the public and a President who is elected by the people and empowered by the Constitution to govern.”

Vought insisted in Senate confirmation hearings this month that the 50-year-old Impoundment Control Act is unconstitutional, drawing harsh rebukes from Democrats and muted criticism from some Republicans.

“What [the Trump administration is] trying to do — not pay contractually obligated funds — runs pretty squarely into the law,” said Sanjay Narayan, managing attorney of Sierra Club’s Environmental Law Program. ​“I think that’s deliberate. I think they want to establish the outer boundaries of what they can do.”

Meanwhile, actions by federal agencies to withhold or deny funding could be challenged by affected government, nonprofit, and private-sector grantees, said Jaron Goddard, an attorney in the energy and climate solutions practice of law firm Wilson Sonsini Goodrich & Rosati. But those challenges could be complicated, costly, and time-consuming.

“Federal agencies can’t simply terminate any existing grant or loan agreement at whim,” she said. ​“The express terms and conditions of the award and regulations in effect control the basis an agency has to terminate or otherwise shorten an award or even take other actions that amount to termination, like refusing to process reimbursements. These are all things that, depending on the case, can be challenged.”

Given the costs and uncertainties involved, Goddard said, ​“every company or nonprofit will have to make the determination: How much is this grant worth to us?”

Federal agencies seeking to slow or halt funds have other ways to do so, such as accusing grantees of violating the terms of their contracts, Goddard said. Harvard Law School’s Environmental and Energy Law Program also noted that federal grant agreements may include terms that allow federal agencies to ​“terminate” the agreements if the ​“award will not accomplish the purposes for which the federal award was made” or if the award ​“no longer effectuates the program goals or agency priorities.” But the Harvard memo added that these terms only apply if they are clearly laid out in the award agreement.

The broad, vague wording of last week’s executive order on ​“terminating the Green New Deal” and Monday’s OMB memo make it difficult for grantees to predict how Trump administration political appointees might interpret those justifications, Goddard said.

“[The administration is] being imprecise on purpose,” she said. ​“The purpose is to sow confusion.”

Ever-changing rules and constant uncertainty over the state of federal energy funding aren’t just bad for clean energy and climate progress, Sierra Club’s Narayan said. It also undermines the Trump administration’s goals of lowering energy costs and expanding U.S. manufacturing capacity to compete on the international stage.

“If you think about regulatory regimes, it’s about bringing predictability and stability to the market,” he said. ​“Regulation provides a level playing field where everybody can see what’s going to happen, which enables the kind of long-term investment decisions that allow a country to have a robust manufacturing sector. That’s what they’re tearing up.”