The White House Office of Management and Budget (OMB) issued new guidance Wednesday clarifying limits to the disbursement of Inflation Reduction Act (IRA) funds ordered by President Trump Monday.
In one of a flurry of Inauguration Day executive orders, Trump directed federal agencies to “immediately pause the disbursement of funds” from both the IRA and the 2021 Bipartisan Infrastructure Law.
A full halt to the disbursement could imperil billions of dollars, including to 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-NJ), who denounced the move as illegal and “cost[ing] countless Americans their jobs.”
Some Republican allies also expressed reservations at the idea of a full shutdown of disbursement. Sen. Mike Crapo (R-Idaho), who voted for the Bipartisan Infrastructure Law, told Politico it was a “concern, but again I don’t know how big a concern,” adding “that doesn’t mean the payments aren’t going to be made.”
In the Wednesday memo, the Trump OMB clarified that the pause “only applies to funds supporting programs, projects or activities that may be implicated by the policy established in Section 2 of the order,” which includes funding related to climate change mitigation and incentives for electric vehicle charging.
“For the purposes of implementing section 7 of the Order, funds supporting the ‘Green New Deal’ refer to any appropriations for objectives that contravene the policies established in section 2,” the memo states. “Agency heads may disburse funds as they deem necessary after consulting with the Office of Management and Budget.”
Trump has frequently falsely conflated Biden-era climate policies with the Green New Deal, the ambitious suite of energy and environment supported by lawmakers like Rep. Alexandria Ocasio-Cortez (D-N.Y.) and 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 Budget Committee about the order. Vought, a primary author of the conservative Project 2025 policy blueprint, said he would “uphold the law” as director but argued that the 1974 Impoundment Control Act, which restricts the White House’s ability to restrict congressionally-approved funding, was unconstitutional.
