Photo illustration: Lindsey Bailey/Axios. Photos: Chip Somodevilla, Bloomberg, Pool via Getty Images
The White House's federal funding freeze has brought fresh havoc to the federal clean energy grant and tax-credit processes.
Why it matters: The Office of Management and Budget memo leaked widely halts a huge chunk of spending from the IRA and infrastructure law and programs that Congress funds every year.
- The memo has sent companies across the energy sector scrambling to figure out whether they'll get loans and grants that they've been promised.
Driving the news: "All of these programs look in peril to me," including the IRA's clean energy tax credits, Sen. Ron Wyden told reporters.
- Wyden said he office has already fielded "lots of calls" from people in the energy and housing sectors who were set to receive federal money.
- "I was surprised at its breadth," Appropriations Chair Susan Collins told reporters before heading into the Senate chamber.
Zoom in: The OMB memo follows through on President Trump's executive order pausing IRA and infrastructure law spending at the agencies.
- Much of the IRA and IIJA money is already obligated, creating a legally binding contract between a grant recipient and the federal government.
- That's true for more 90% of the grant money EPA was appropriated under the IRA, for example.
- The memo directs agencies to pause obligation and disbursement "to the extent permissible under applicable law."
That's to say that this move could see quick challenges in the courts and on the Hill.
- Senate Minority Leader Chuck Schumer this morning called it an "illegal act" and said New York's attorney general is contemplating action to stop it.
- "This is clearly illegal, and the lawsuits being filed should lead to quick relief from the courts," Zealan Hoover, who led implementation of the IRA and IIJA at EPA during the Biden administration, said in an email.
- In the near term, the focus for Democrats will be on individual assistance rather than grants that were supposed to go to energy companies.
The big picture: Democrats labeled it a constitutional crisis with grave implications.
- "If they don't get this sorted, this is the beginning of a recession," Sen. Martin Heinrich told Axios.
- And independent Sen. Angus King told reporters: "It's blatantly unconstitutional ... The results of this are going to be dramatic on real people."
What we're watching: A number of Democrats voted against confirming Transportation Secretary nominee Sean Duffy on the floor Tuesday because of the funding freeze.
- Trump's picks for Interior, EPA and DOE could see similar opposition.
