Last Tuesday was an unusual day. The previous evening, President Trump’s Office of Management and Budget (“OMB”) issued a memorandum (M-25-13), “freezing” federal financial assistance funds on a wide variety of federal programs. More precisely, the memo called for a temporary pause of agency grants, loans and other financial assistance programs pending the completion of a “comprehensive analysis” of those programs. Although it is not clear that the President had the authority to withhold funds appropriated by Congress, this action has raised substantial questions as to whether payments could be made across a wide range of federal programs.
Early on Tuesday, OMB followed up with an instructional memo detailing the requested information, along with a lengthy 51-page list in very small print that outlined all the agencies and programs from which this information was being sought. For the FCC, the programs referenced include all four Universal Service Fund (“USF”) programs, including E-Rate, the closed Emergency Connectivity Fund (“ECF”), and the Cybersecurity Pilot Program.
Later on Tuesday, OMB released a “Clarification Memo” stating that only programs implicated in seven of the President’s Executive Orders are subject to the “pause.” Those programs, clearly having nothing to do with E-Rate, were:
Still later on Tuesday, responding to the day’s chaos and specifically to concerns that Medicaid payments had already been affected, the U.S. District Court for the District of Columbia issued a temporary stay of the original OMB freeze memo.
Wednesday morning, OMB blinked and released a two-line rescission memo (M-25-14) indicating that “OMB Memorandum M-25-13 is rescinded.” We here at E-Rate Central — and undoubtedly millions of others going well beyond E-Rate — could breathe again.
At least for the moment. What we do not know is whether a revised memo might be forthcoming — presumably without an immediate freeze — reinstating the request to complete a similar spreadsheet for all the Federal financial assistance programs with an implied threat of funding cuts.
We believe that the E-Rate program, with or without hotspots, remains an important, ongoing, program with broad bipartisan support. The uncertainty surrounding the upcoming changes, however, still persists.