After a day of confusion and legal challenges across the country, the Trump administration cancelled a memo freezing federal grants, loans and other assistance, according to reporting from various news outlets.
A federal judge on Tuesday had temporarily halted the change shortly before it was set to go into effect.
The pause had been intended to ensure that federal spending aligns with the Trump administration’s priorities and would include previously greenlit projects, according to a White House memo released Monday and related documents. Hundreds of millions of dollars for new recycling facilities and other industry initiatives were at risk of being put on hold.
“Each agency must complete a comprehensive analysis of all of their Federal financial assistance programs to identify programs, projects, and activities that may be implicated by any of the President’s executive orders,” Matthew J. Vaeth, acting director of the Office of Management and Budget, wrote in the original White House memo earlier this week.
“In the interim, to the extent permissible under applicable law, Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”
U.S. District Judge Loren L. AliKhan’s administrative stay had paused the freeze until Monday and followed a lawsuit filed by several nonprofits.
At a Tuesday press conference, Trump Press Secretary Karoline Leavitt emphasized the pause was temporary and said she had spoken with President Donald Trump’s nominee for OMB director, Russell Vought.
“He told me to tell all of you that the line to his office is open for other federal government agencies across the board, and if they feel that programs are necessary and in line with the president’s agenda, then the Office of Management and Budget will review those measures,” Leavitt said.
Confusion and uncertainty over the effects of the Trump administration’s move were widespread.
“There’s an absence of detail on criteria with respect to OMB review in this memo,” Mitch Hecht, International Recycling Group’s co-founder and CEO, said in an email Tuesday. “So, we’re hopeful there will be more clarity in the coming days on details and timing of the review process.”
IRG last summer secured a multimillion-dollar loan from the U.S. Department of Energy for about 60% of the financing for a massive plastic recovery facility to mechanically process plastics in Pennsylvania and equipment to produce an iron-reducing feedstock for steel-making furnaces in Indiana.
Critics said the freeze amounted to an unconstitutional seizure of Congress’s power of the purse. All of the funding in question was passed by Congress and signed into law by a previous president.
“Trump has effectively instituted an illegal government shutdown of investments to states and communities throughout America. At EPA, this means that funds for safe drinking water projects, Superfund cleanup, and sewage construction will halt, costing jobs and harming public health,” Environmental Protection Network Executive Director Michelle Roos said in a written statement. “We are now on a steep and slippery slope toward a presidency that abuses taxpayer funds to reward political loyalty on a case-by-case basis rather than supporting the impartial pursuit of the public good for all Americans.”
The OMB memo vastly broadened several earlier spending holds, including a Jan. 20 executive order directing all agencies to “immediately pause” the release of funding from the Inflation Reduction Act and the Infrastructure Investment and Jobs Act, often called the Bipartisan Infrastructure Law, pending further review over the following 90 days.
Grants and other support have been awarded to a wide variety of recycling projects over the past few years, such as through the U.S. EPA’s Recycling Education and Outreach program and its Solid Waste Infrastructure for Recycling, or SWIFR, grants.
“Practically speaking, it means projects will be reviewed to cull out those that undermine the Administration’s belief that renewable energy shouldn’t be subsidized to tilt the playing field against affordable and available fossil-based energy,” Hecht said of the Jan. 20 order, adding that he was confident the company’s loan would continue after a temporary pause. He said Tuesday that “the OMB memo echoes the intent of the original Executive Order.”
Hecht and other industry officials said they believe their projects align with government and public priorities. Tennessee-based Eastman, for example, moved forward with its second U.S. chemical recycling plant in Texas after receiving an IRA-related DOE grant of up to $375 million in March 2024.
“Our Texas project is an investment in the U.S. industrial base and a demonstration of our continued commitment to growing the U.S. economy, onshoring critical supply chain products and bringing high-paying jobs to Texas,” Eastman spokesperson Kristin Parker said Jan. 24.
IRG’s Hecht added, “In terms of recycling, investment in recycling is completely consistent with the stated goals of all petrochemical companies that plastics are a vital and sustainable material that can be part of the circular economy. That’s what the public demands.”
The Association of Plastic Recyclers, owner of Resource Recycling, Inc., also expressed optimism prior to Tuesday’s freeze that recycling related projects would continue.
“Recycling is a nonpartisan issue as a strong recycling system is an important driver of manufacturing jobs in the U.S.,” said Kate Bailey, APR chief policy officer. “With that in mind, we are optimistic that recycling projects will be encouraged by the Trump Administration, and we look forward to working with federal agencies and Congress to advance these efforts.”
A focus on multicultural initiatives
One of the Trump Administration’s priorities is to scale back or undo programs meant to support civil rights and diverse communities. Among other changes, it eliminated the Biden administration’s environmental justice initiatives, suspended refugee aid and put a freeze on civil rights enforcement after rescinding an executive order dating back to the Civil Rights Era that, in its present form, banned federal contractors from discriminating against employees “because of race, color, religion, sex, sexual orientation, gender identity, or national origin.”
The EPA’s Recycling Outreach and Education grants, whose first winners were announced in late 2023, put a particular emphasis on environmental justice and reaching diverse and underserved communities from coast to coast. A second round of applications also opened last fall.
Recipients appeared to still have access to those grants on Monday, several said at the time.
In Portland, Oregon, the nonprofit Oregon Community Warehouse, which collects donated furniture and other home goods for formerly homeless families and others in need, won a slightly smaller grant to spread awareness of its services, especially among the city’s multicultural communities. Around $300,000 has been spent on community research, advertising and staff salaries, Communications Manager Phil Gerigscott said.
“We’re definitely a little nervous, but it seems like hopefully still smooth sailing,” he said Monday, adding he had accessed some of the grant dollars as recently as Thursday.
“The EPA has generally been very communicative with us,” Gerigscott added, but he hadn’t heard from them after the executive order – possibly reflecting a broader drop in public communications from the agency. “We’re under the assumption that no news is good news.” Late Tuesday he said the organization had been notified that funding was halted until further notice.
The city of Tacoma, Washington, won $2 million to grow its community ambassador program and reach multilingual residents. So far the city has spent around $177,000 in labor and contractors, spokesperson Maria Lee said.
“The City will be reviewing the Executive Orders to ensure it is following legal and constitutional requirements, and will be working closely with its state and federal partners to understand the potential impacts and respond to federal policies,” she wrote in an email Tuesday.
The EPA didn’t return a request for comment.
Marissa Heffernan and Antoinette Smith contributed to this report.
A version of this story appeared in Resource Recycling on Jan. 28.
