On January 29, the Trump administration appears to have rescinded its executive order freezing federal grant funding. A prior order freezing foreign aid is still in effect. Press Secretary Karoline Leavitt suggested, however, that the freeze might continue in some form in a post on X: “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. The President's EO's on federal funding remain in full force and effect, and will be rigorously implemented.” A separate executive action, still in effect, offers buyouts to over two million federal workers.
Despite the press secretary’s post, it appears that funds are again flowing. If the freeze were to come into effect, it would affect employee ownership companies and programs. As has been true for a number of President Trump’s executive orders, the language is more ambiguous and rhetorical than is typical for executive orders, which tend to be crafted by attorneys and be fairly to very detailed. As a result, impacts are uncertain. The orders are also being challenged as violating federal law.
The foreign aid freeze could affect three of the four largest United States Agency for International Development (USAID) contractors that are ESOP-owned (Chemonics, DAI, and Abt Associates). The much broader spending freeze would have affected many ESOP companies, especially those doing infrastructure work and in the social services sector. Some of the grant money that could be frozen currently supports state centers and other programs to promote employee ownership.
We will update this blog as needed to reflect whatever further clarifications come from the administration.