On January 27th, the Trump administration ordered a freeze on all disbursements of federal funds through a memorandum signed by the Office of Management and Budget (OMB). The OMB memo stated that the freeze does not apply to benefits that go directly to individuals, such as Medicaid, Social Security, and other mandatory programs. Just minutes before the freeze was to go into effect—on the evening of Tuesday, January 28^th, at 5:00pm EST—U.S. District Judge Loren AliKhan ordered a stay on the freeze, which prohibited the Trump administration from suspending payments of any federal programs funded by acts of Congress until February 3rd at 5:00pm EST. On January 29th, the Trump administration rescinded the order in response to significant pushback from both sides of the aisle in Congress.

The OMB memo directed all federal agencies to “temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency
activities” covered by the following executive orders:

• • Protecting the American People Against Invasion (Jan. 20, 2025)
  • Reevaluating and Realigning United States Foreign Aid (Jan. 20, 2025)
  • Putting America First in International Environmental Agreements (Jan. 20, 2025)
  • Unleashing American Energy (Jan. 20, 2025)
  • Ending Radical and Wasteful Government DEI Programs and Preferencing (Jan. 20, 2025)
  • Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government (Jan. 20, 2025)
  • Enforcing the Hyde Amendment (Jan. 24, 2025)

It its memo, the OMB stated that the purpose for the temporary pause was to dedicate financial assistance from the federal government “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.”

To achieve that goal, the OMB directed all agencies to freeze all financial disbursements, “including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”

Democracy Forward, representing various public-health advocates, nonprofits, and businesses, filed suit less than 24 hours after release of the OMB memorandum. Nearly two dozen states filed separate actions against the Trump administration to claim the temporary pause would cause irreparable harm to their citizens. Judge AliKhan blocked the OMB memo from becoming effective by implementing a brief stay to provide the court with more time to consider the issue and the potential harms that could result.

In a separate action, the attorneys general of twenty-three different states filed suit against Trump, the OMB, and various federal officials, seeking an emergency temporary restraining order to prevent enforcement of the funding freeze. The plaintiff-states claimed the OMB directive violates the U.S. Constitution and the Administrative Procedure Act, and that “[t]he substantial confusion created by the OMB Directive and unlawfully withheld funding pursuant to the OMB Directive’s directive [sic] will result in immediate and devastating harm to Plaintiff States.”

Impact on Tribal Governments and Alaska Native Corporations

Although the OMB has retracted the memo, the Trump administration’s dedication to ending “wokeness” and DEI initiatives has the potential to harm tribes and tribal entities disproportionately, many of which rely on federal funding for essential programs, benefits, and governmental services to address and support the needs of their communities. The legal basis for federal funding of tribes and tribal entities is enshrined in the U.S. Constitution and in this nation’s trust obligations based on the United States’ government-to-government relationship with federally recognized tribes and sui generis relationship with Alaska Native Corporations.

Despite this longstanding history and the well-established legal background that supports federal funding to tribes, ANCs, and tribal entities, the proclaimed commitment of the Trump administration to gut DEI, environmental conservation efforts, and other priorities as stated in the OMB’s memorandum could have a destructive impact on tribal communities. Of particular concern is the uncertainty over whether the Trump administration will acknowledge its government-to-government relationship with tribal nations, and its legal treatment of tribes, ANCs, and their members as a political classification rather than as a racial group—a legal distinction rooted in the Constitution and affirmed by the Supreme Court for over 50 years.

The recission of OMB’s temporary freeze has provided a brief reprieve for organizations and communities that would have been harmed by the order, including tribal entities, but the motivation behind the recission remains unclear. Tribal governments, ANCs and tribal entities, and all parties likely to be impacted by the Trump administration’s proclaimed agenda should consider proactively engaging with federal agencies to identify the effects that Trump’s executive orders might have on federal programs and funding on which they rely. They may also consider being prepared to educate federal agencies and appointees about federal programs that provide funding and benefits to tribal governments, ANCs, and tribal entities that are Constitutionally protected and that fulfill the government’s trust responsibilities.

This article summarizes aspects of the law and does not constitute legal advice. For legal advice with regard to your situation, you should contact an attorney.

We also acknowledge the contributions of Molly Gunther, one of our Anchorage Law Clerks, in the development and drafting of this article.