Overview of OMB Memo M-25-13 and Federal Financial Suspension

What is OMB Memo M-25-13?

Matthew J. Vaeth, Acting Director for the Office of Management and Budget (OMB), issued a memo (M-25-13) temporarily pausing federal agency grants, loans, and other financial assistance programs. Exceptions apply to funding and grants paid directly to American citizens, such as Social Security and Medicare benefits, but the impact on tribal programs remains unclear.

In Fiscal Year 2024, of the nearly $10 trillion the Federal Government spent, more than $3 trillion was allocated to federal financial assistance, including grants and loans, funding that is critical to tribal sovereignty and economic stability.

Definition of Federal Financial Assistance

Federal financial assistance includes various forms of support that recipients or subrecipients receive or administer. This includes:

  • Grants and cooperative agreements
  • Non-cash contributions or property donations (such as donated surplus property)
  • Direct appropriations and food commodities
  • Loans, loan guarantees, interest subsidies, and insurance

Additionally, for § 200.216, federal financial assistance includes grants, cooperative agreements, loans, and loan guarantees.

The OMB memo states that exceptions may be granted on a “case-by-case basis”, making it difficult to determine which programs and services will be impacted and to what degree.

Timeline of the Suspension and Federal Court Intervention

  • January 28, 2025 (5 PM ET): Federal funding suspension takes effect.
  • February 3, 2025 (5 PM ET): Federal Judge Loren Aliken temporarily blocks the suspension.
  • February 10, 2025: Agencies must submit detailed reports on affected programs, projects, or activities.

Agency Compliance Requirements

Each federal financial assistance program must:

  • Assign a senior political appointee to oversee program alignment with Administration priorities.
  • Review current and pending announcements to ensure they address Administration priorities.
  • Modify, withdraw, or cancel awards that conflict with Administration priorities, within legal limits.
  • Ensure proper oversight, initiate investigations into underperforming recipients, and cancel awards if necessary.

Tribal Programs Directly Impacted by OMB Memo M-25-13

Impact on Tribal Self-Governance

The ability for Tribes to be self-governed remains highly dependent on federal funding. The current actions of this Administration pose a real and immediate threat to the everyday lives of millions of American Indian and Alaska Native families, their communities, and the Tribal enterprises they rely upon.

“To implement these orders, each agency must complete a comprehensive analysis of all of their Federal financial assistance programs to identify programs, projects, and activities that may be implicated by any of the President’s executive orders.”

Uncertainty Regarding Medicaid Waivers

The OMB memo (M-25-13), dated January 27, 2025, has raised concerns about its impact on federal Medicaid waivers. While the memo mandates a temporary pause on federal financial assistance programs, it does not explicitly mention Medicaid waivers. However, there is a concern that the broad definition of federal financial assistance could potentially include Medicaid funding.

Advocates and policymakers are calling for clarification from the Administration to ensure that Medicaid and the Children’s Health Insurance Program (CHIP) remain unaffected.

The memo specifies that Medicare and Social Security benefits are exempt, but whether Medicaid waivers fall under the same exemption remains unclear.

Key Tribal Programs at Risk

Economic and Community Development

Infrastructure and Technology

Agriculture and Natural Resources

Energy and Environment

Cultural Preservation

Emergency and Disaster Relief

  • American Rescue Plan Act: Invests $1.75 billion in American Indian and Alaska Native government programs administered under the Department of Interior.

Substance Use Disorder Programs

  • Substance Abuse Prevention and Treatment Block Grant (SABG): Provides funds to states, territories, and tribes to support prevention, treatment, and recovery services for individuals with substance use disorders. 
  • State Opioid Response (SOR) Grants: Offers funding to states and territories to address the opioid crisis by increasing access to medication-assisted treatment, reducing unmet treatment needs, and reducing opioid overdose-related deaths. 
  • Tribal Opioid Response (TOR) Grants: Supports tribal communities in addressing the opioid crisis through prevention, treatment, and recovery support services. 
  • Comprehensive Opioid, Stimulant, and Substance Abuse Program (COSSAP): Provides funding to state, local, and tribal governments to develop, implement, or expand comprehensive efforts to identify, respond to, treat, and support those impacted by illicit opioids, stimulants, and other drugs of abuse. 
  • Drug-Free Communities (DFC) Support Program: Funds community coalitions to reduce youth substance use through evidence-based prevention strategies. 

Health and Human Services

Education and Youth Services

Indigenous Pact’s Response and Support

The Indigenous Pact intergovernmental affairs office has well-placed resources and a constant presence in Washington, D.C. We are actively engaged in this issue, monitoring federal and state policies and their impacts on Tribal health and governance.

As a partner with Indigenous Pact, you have access to:

Expert analysis of federal and state policy changes.

Direct briefings with our policy experts.

Real-time updates on funding developments.

For further insights or to request a direct policy briefing, contact Indigenous Pact’s tribal intergovernmental

affairs office

Ashley@www.indigenouspact.com