Sudden policy changes leave employees in limbo and millions of dollars up in the air: 'Now very much in doubt'

Hundreds of billions of dollars are up in the air after the Trump administration issued executive orders for government agencies to halt spending.

What is happening?

Federal clean energy and energy-efficiency projects funded by the 2022 Inflation Reduction Act have been in limbo since Trump took office, as Canary Media reported. And since any final change to the IRA would require an act of Congress, there is "significant political uncertainty" about the future among clean energy manufacturers, according to Antoine Vagneur-Jones, BloombergNEF's lead trade and supply chains analyst, in an interview with The New York Times. 

In just one of the impacts, Zero Emissions Northwest furloughed all its employees on Jan. 30. The company, which helps rural Washington and Idaho businesses save money on energy and reinvest in their communities, had won $3.7 million in grants from the U.S. Department of Agriculture to save farmers and other stakeholders $20 million in the long term. Per the news report, the USDA was dodging questions from ZEN president David Funk at the end of January and had failed to pay $250,000 in reimbursements for work completed in the fourth quarter of 2024.

"​[The businesses] have been investing millions of dollars into these projects that they were confident were going to be paid by the federal government," Funk told Canary Media.

In another case from the report, 13 Illinois school districts had awarded $15 million to use electric school buses as backup power in the case of power outages. A contractor is considering completing the work without knowing whether they'll be paid.

These and other actions, which could have dire consequences, appear rooted in Project 2025, a plan by conservative think tank the Heritage Foundation to remake the federal government. As a result, grantees could land "in a financial bind that prevents them from meeting their contractual obligations as a pretext for canceling those contracts," Canary Media reported.

Why is this important?

"Hundreds of nonprofits, governments, and businesses have received funding under the Inflation Reduction Act and [Infrastructure Investment and Jobs Act] programs over the last three years," the outlet stated.

"Most of that funding has already been obligated, or legally committed under contract, meaning recipients like the rural businesses Funk's organization helps felt confident spending money and making long-term investment plans based on the belief — now very much in doubt — that the federal government would honor its commitments."

Canary Media reported that in the last week in January, despite two court orders for federal agencies to resume spending, it was unclear whether that was happening.

How could this impact Americans' bottom lines? 

Federal judges halted the spending ban, though the administration issued a memo that directed agencies to "exercise their own authority to pause awards or obligations." The legal filings are likely to end up with the Supreme Court, according to Canary Media.

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Also at risk, per the report, are power projects in the most rural areas of the country, as well as $600 million to modernize utility infrastructure damaged by Hurricanes Helene and Milton. Even government websites and data have been rendered inaccessible by the administration, and officials are refusing to answer questions from grantees, the outlet reported.

In a letter, congress members said Department of Energy moves based on executive orders were "unlawful actions" and would stop Americans from saving $1 billion on energy bills via the IRA and jeopardize 50,000 jobs.

"The President's attempt to freeze the Home Energy Rebates Program means these costs will fall back on American consumers," Sen. Patty Murray of Washington state and Rep. Marcy Kaptur of Ohio stated, per Canary Media.

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