Since assuming office last week, President Trump has signed several executive orders related to various policy topics, including energy, climate, and infrastructure. Among those actions is an executive order temporarily halting disbursement of remaining funds appropriated under the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, as well as a related order to temporarily freeze all federal assistance programs. Combined, the Executive Orders have created uncertainty for the future of spending under both laws and call into question continued reliable and sustainable infrastructure investment from the federal government.
First, an Executive Order signed on inauguration day that would temporarily halt IIJA and IRA funds has been viewed by some lawmakers as only a pause for specific programs related to EVs and EV charging. Unfortunately, language in the Executive Order is unclear, which led to the Federal Highway Administration (FHWA) briefly shutting down any disbursements for IIJA programs last week. While, FHWA is once again reimbursing states for expenses, the initial confusion concerned many infrastructure stakeholders who questioned the Trump Administration’s implementation of IIJA programs over the final two years of the legislation.
Furthermore, that same order also rescinded the Biden Administration’s executive order placing climate change at the forefront of U.S. domestic and national security policy, as well as the previous administration’s “Justice40 Initiative,” which directed at least 40 percent of climate investment be dedicated to investing in environmental justice communities. While the rescission of those policies was not unexpected, it does illustrate the priorities that the Trump Administration will examine when administering over $80 billion in additional discretionary spending still remaining from the IIJA.
After an initial flurry of Executive Orders on inauguration day, President Trump continues to sign additional sweeping policy changes over the past several days. The most sweeping was an order published on Monday January 27th calling for a temporary halt to “all Federal financial assistance programs.” While that order was soon rescinded by the Office of Management and Budget on Wednesday, January 29th, the funding pause created widespread confusion among the organizations, individuals, and levels of governments who benefit from federal government assistance.
The quick reversal from the Trump administration follows a federal judge issuing an injunction on Tuesday afternoon against the funding pause, temporarily blocking the administration’s efforts to restrict payments for federal grants and assistance programs. The lawsuit, led by organizations including the National Council of Nonprofits and the American Public Health Association, argued that OMB failed to provide a legal basis for suspending funds already approved by Congress. Attorneys general from 22 states and the District of Columbia also filed a separate legal challenge, claiming that millions of Americans rely on federally funded programs for healthcare, social services, and economic support. Despite the memo’s withdrawal, the court-ordered injunction remains in effect until at least February 3rd, because of the administration’s comments on continuing to freeze funding.
If allowed to come into effect, the pause on federal assistance could have had wide reaching implications for critical transit and infrastructure programs that rely on government dollars to fund their operations. Among the myriad initiatives that would have been affected by the funding freeze are programs impacting infrastructure planning and construction. While legal precedent holds that the President cannot block congressionally approved spending, like the IIJA, even a slowdown could have large scale ramifications for state and local projects.
In addition to the two Executive Orders mentioned above, President Trump has also signed multiple executive orders aimed at increasing production of fossil fuels. Most notably, he signed an order declaring a “National Energy Emergency.” This order was signed with the intent of allowing for increased production of fossil fuels while allowing for sidestepping of certain rules and regulations which could delay production increases. This executive order is expected to face court challenges in the coming weeks and months. ASCE supports national energy generation and production policies that promote a broad and balanced energy source portfolio, supports engineering and industry practices that protect public health, safety, water resources, and the environment during exploration and production and generation.
As we move forward, it is likely the current administration will continue to reevaluate federal spending and efforts to drastically slash Congressionally appropriated dollars will face significant resistance. In the meantime, ASCE will continue to advocate for sustained and reliable federal investment in our nation’s interconnected infrastructure systems. Legislation like the IIJA provides a much-needed infusion to address the nation’s growing infrastructure investment gap. However, in addressing deficiencies for long-term outcomes, sustained investment at and above current levels will be required to meet existing and future infrastructure demands. ASCE will continue to closely monitor the impact of any executive orders on infrastructure funding and coordinate with partners on an appropriate industry response when necessary.