Temporary OMB freeze on Federal grant funding affects our budget too

Pago Pago, AMERICAN SAMOA — American Samoa woke up yesterday morning to the reality of our financial dependency on the United States, causing somewhat of a panic among local agencies who depend on Federal funding.

Federal funding makes up 38% of the FY 2025 budget of the territory. This does not include CIP funding or funding that is obtained through the Department of Interior for ASG and LBJ.

Via a memorandum, that Samoa News was able to obtain, the US Office of Management and Budget (OMB) implemented a temporary pause on the disbursement of certain federal grants and loans, while each Federal agency “identify and review all Federal financial assistance' programs and supporting activities consistent with the President's policies and requirements.”

The temporary pause, according to the OMB memo, would become effective on January 28, 2025, at 5:00 PM.

However, hours later it was announced that a federal judge had temporarily blocked the temporary funding freeze. The administrative stay pauses the freeze until this coming Monday, with the notion of seeking clarity of what the Trump Administration can and cannot freeze with funding appropriated by Congress.

Portals used to drawdown grant funding were closed early yesterday morning, with “down for maintenance” messages, while not allowing entry onto the sites. A panic set in locally as news of the ‘pause’ was revealed through US national news, as some local agencies found that the portal they used for drawdowns was closed.

At that time, there was no word from the Governor’s Office as to what exactly was happening.

Around 10 am local time, the PMS portal that’s used for the Department of Health & Human Services grants opened, but was said to be very slow in responding.

According to a message on the site, the portal will now only be available during the hours of 9am to 4pm EST, Monday thru Friday, until further notice. It also noted that there would be payment delays due “to Executive Orders regarding potentially unallowable grant payments, PMS is taking additional measures to process payments. Reviews of applicable programs and payments will result in delays and/ or rejections of payments.”

Other portals used by different grantors were said to re-open too, while others did not. It’s unknown exactly which ones are now operable, although Medicare and Medicaid funding is said not to be affected according to the head of the local Medicaid office. However, reports of the portals being extremely slow are consistent.

The Governor’s Office in a brief response to Samoa News queries about the issue via email noted that the “Governor is to issue a memo out to dept/ agencies/ authorities regarding this issue soon. Basically … wait until we clarify from Grantors how each grant is affected.”

Congresswoman Uifa’atali Amata said in a press release on the issue that she wants to reassure the people of American Samoa that “congressional grants are like to continue following a brief review of federal spending that is in the pipeline, including billions in spending that President Biden ordered in his final days in office.

“President Trump’s order creates a review by the Office of Management and Budget with a working date of February 10th,” said Congresswoman Amata. “American Samoa relies on federal support including grants for services. Many are yearly grants, so those local services should go forward, and I expect prompt federal resolution as Congress and the administration work on the President’s concerns.

“The President does have a clear responsibility to review spending and prevent waste, but Congress must ensure that funding mandated under the law takes place.

“I understand the President’s urgency to get our massive national debt spending under control, and this nationwide order will be a temporary effort to rapidly assess spending and address waste, goals he campaigned on, then release important funding very soon.

“Much of federal spending is mandated by law, while in some cases the executive might have leeway to spend ‘up to’ the upper limit set by Congress. So, aspects of this order could be tested in the courts.

 “This is a developing story, and I will be transparent about whatever I learn regarding how this can affect American Samoa. As always, I will work to secure what American Samoa needs and ensure we are fairly treated with the states.”

Amata concluded: “Finally, we are a people of faith, and are advised many times in Scripture to not live in fear. I am confident our necessary funding will come through, and I will continue to report back from Washington.”

The OMB memo introduces the ‘temporary pause’ as a mandate given to President Donald J. Trump by the American people who elected him. The mandate is “to increase the impact of every federal taxpayer dollar.”

As such, it states that “career and political appointees in the Executive Branch have a duty to align Federal spending and action with the will of the American people as expressed through Presidential priorities.

“Financial assistance should be dedicated to advancing Administration priorities, focusing taxpayer dollars to advance a stronger and safer America, eliminating the financial burden of inflation for citizens, unleashing American energy and manufacturing, ending "wokeness" and the weaponization of government, promoting efficiency in government, and Making America Healthy Again.

“The use of Federal resources  to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve.”

The memo continues outlining what it expects each of the agencies do and notes “this temporary pause will provide the Administration time to review agency programs and determine the best uses of the funding for those programs consistent with the law and the President's priorities…”

OMB states that “no later than February 10, 2025, agencies shall submit to OMB detailed information on any programs, projects or activities subject to this pause.”

In the meantime, it writes that “each agency must pause: (i) issuance of new awards; (ii) disbursement of Federal funds under all open awards; and (iii) other relevant agency actions that may be implicated by the executive orders, to the extent permissible by law, until OMB has reviewed and provided guidance to your agency with respect to the information submitted.”

Cancellation of awards is on the table for “awards already awarded that are in conflict with Administration priorities,” or upon review found to underperform.

According to a footnote in the memo, Federal financial assistance means assistance that recipients or sub-recipients receive or administer in various forms, but this term does not include assistance provided directly to individuals.

Of note, the footnote points out that “nothing in this memo should be construed to impact Medicare or Social Security benefits.” Medicaid is not mentioned.

BACKGROUND

In anticipation of the administrative stay on the freeze being extended, one of the questions posed by those opposing the freeze is that funding appropriation is one of the powers given to Congress by the US Constitution, and not to the President.