After a flurry of panic, White House narrows IRA funding restrictions in prior executive order

Executive orders and actions have been coming fast and furious out of the Trump White House. And while speed can get the agenda moving quickly, it can also lead to some problems.

Take for example, section seven of the executive order titled “Unleashing American Energy,” which orders, among other things, an immediate pause to the disbursement of federal funds tied to certain components of the Inflation Reduction Act and the Infrastructure Law.

Which components exactly? That was a lot less clear.

Early Tuesday afternoon, Jeff Davis, a senior fellow at the Eno Center for Transportation, started getting some frantic phone calls:

“(They were) saying that the executive order signed by President Trump the day before purporting to stop Green New Deal spending was having the effect of suspending all Federal Highway Administration payments and new project approvals,” he said.

Davis said the FHA started shutting down disbursements out of an abundance of caution, even for things like road and bridge work.

The idea that promised funding could be on hold changes the calculus for state policymakers, said Adie Tomer, a senior fellow at the Brookings Institution.

“They may be hesitant to continue projects where they might be liable for enormous sums of money. We’re talking tens to potentially hundreds of millions of dollars,” he said.

After that panic, the White House issued guidance clarifying it was just talking about the Green New Deal stuff, like electric vehicle charging infrastructure. 

Other funding can keep flowing if agencies check in first. The whole thing is causing a ton of confusion.

“I will tell you that there is a lot of people reaching out … that are wondering what is going on,” said Marsia Geldert-Murphey.

She’s the president of the American Society of Civil Engineers and also works as an engineering consultant in five states.

“Everybody in those states are all equally concerned about what is going to happen to this money that hasn’t been hasn’t been received yet, but was promised,” she said.

Because tens of billions of dollars have been promised for projects tied to the Inflation Reduction Act and the Infrastructure Law.

Jody Freeman directs the program on environmental and energy law at Harvard Law School. She said if the President tries to block that funding permanently, it’s considered impoundment.

“That would be the President actually impounding money that Congress has appropriated, and that would lead to a legal battle over,” she said.

Plus, Freeman said, states that already spent money with the expectation of reimbursement would likely sue to get it back.