The Federal Funding Freeze Begins to Thaw

Despite the cherry blossoms blooming, 2025 has been unseasonably cold (and not just in terms of weather). The federal funding freeze that’s lingered since early this year has left many organizations in a deep chill. However, with agency guidance shifting, court challenges cooling down, and new cabinet members settling in, we may finally be trading snow boots for sandals. While there is still a feeling of uncertainty, signs point to a slight thaw that could bring long-awaited movement to stalled funding programs. 

ICED OUT:  

On January 27, the Office of Management and Budget (OMB) issued a memo directing a temporary pause on all federal financial assistance activities. This action aimed to ensure alignment with several executive orders issued by President Trump, focusing on policy shifts in energy, environmental, and social programs. The memo's broad scope led to widespread uncertainty and, frankly, chaos among grant recipients and agencies. After drawing multiple legal challenges and substantial public outcry, the OMB rescinded the memo on January 29.  

Although the funding freeze memo was rescinded, some programs are still stalled. However, a clearer picture is emerging as new cabinet members finalize their reviews of agency structures and funding programs. Transportation Secretary Sean Duffy has directed his agency to move programs away from the previous administration's focus on climate and social justice and renew focus on economic analysis and cost-benefit considerations in transportation policy. The Department of Energy (DOE) has paused several clean energy grant programs and is reevaluating previously announced awards, signaling a shift toward traditional energy sources and away from large-scale decarbonization initiatives. Many agencies have issued updated guidance reflecting revised priorities under the Trump administration’s policy agenda, resulting in the rescission of some previously approved programs and delays in others. 

These shifts are taking place against the backdrop of widespread proposed cuts to federal agencies and the civil service workforce, part of a broader effort by the administration to streamline government and reduce what it sees as bureaucratic overreach. While some programs may be restored or retooled under new leadership, others have already been shelved, reinforcing the importance of aligning with current executive branch directives. 

MELTING POINT: 

Congress passed a full-year Continuing Resolution (CR) on March 14 to fund the federal government through the remainder of Fiscal Year 2025. The CR maintains funding levels consistent with the previous fiscal year and provides a much-needed framework for federal agencies to resume operations and move forward with key grant programs. While the measure does not introduce significant new appropriations, it does offer stability after months of uncertainty, enabling agencies to begin processing backlogged awards and advancing delayed solicitations. This legislative action signals a green light for organizations with pending applications or paused projects, provided those projects align with current priorities.  

Through late March and into April, grant solicitation sites have seen a steady increase in funding opportunities as federal departments finalize their reviews and publish opportunities aligning with new administration goals. Multiple departments, such as Health & Human Services (HHS) and the Department of Labor’s (DOL) Employee Training Administration (ETA), have released several opportunities over the past few weeks. The Department of Transportation (DOT) has been the first to begin publishing its annual marquee programs— the Maritime Administration released its Small Shipyards program on April 1 and announced that an amended notice of funding opportunity (NOFO) for the Port Infrastructure Development Program will soon be released.  

There is also a movement for large-scale investments aimed at advancing the administration’s priorities. On March 20, President Trump signed an Executive Order to boost domestic critical minerals production using various strategies. The most notable was the invocation of the Defense Production Act (DPA), which authorizes the Department of Defense (DOD) and the International Finance Corporation to support U.S. minerals production. The Executive Order also includes other strategies, such as opening more Federal Land for mineral exploration, streamlining the permitting process, and utilizing the Export-Import Bank to help secure global feedstock offtake. Like the large-scale, high-profile Battery Manufacturing and CHIPS programs, the Executive Order will provide a significant competitive funding opportunity for companies mining or processing critical minerals.  

As the freeze gives way to forward movement, organizations should not mistake the thaw for a return to business as usual. This new phase demands careful attention to shifting priorities, readiness to respond to evolving guidance, and a strategic recalibration of funding plans. By staying informed and proactive, applicants can turn this moment of transition into an opportunity, positioning themselves not just to compete but to lead in a reshaped federal funding landscape. 

Follow Capitol Funding Solutions’ LinkedIn page to stay updated on newly released programs and updated agency guidance. If your organization is looking for help developing tailored funding strategies, please email mlaborde@capitolfunding.us or jnictakis@capitolfunding.us for additional information.