Chutzpah or mishegoss?

The Trump OMB announced yesterday a pause on government spending.

“The memo required agencies to pause all spending, with a footnote exempting “assistance received directly by individuals.” HHS suspended states from drawing down Medicaid funds and tribal facilities from drawing down Indian Health Service Funds. Also suspended were grants that provide funds for Head Start, child care, LIHEAP, and more. By midday yesterday, OMB issued a corrective note explaining that the footnote excluded Medicaid and Head Start, as well as other programs like SNAP and Pell grants. That was good, if incoherent, since Medicaid makes payments through intermediaries (states, which may in turn pay managed care organizations which pay providers) as much as any federal program. And the order leaves in the crosshairs, just at HHS, programs offering drug treatment and mental health services, funding foster care, serving the homeless, engaging in medical research, and on and on.

 

“Smart lawyers have focused on the question whether the delay violates the Impoundment Control Act (sure seems to), but there’s another problem. The actions now unfolding may well violate the terms of any number of grant agreements. Grant agreements bind two parties—not only the grantee, but also the government. Here’s a snippet from the key text, the Uniform Grants Guidance:

 

“Payments for allowable costs must not be withheld at any time during the period of performance unless required by Federal statute, regulations, or in one of the following instances: (i) The recipient or subrecipient has failed to comply with the terms and conditions of the Federal award; or (ii) The recipient or subrecipient is delinquent in a debt….

 

“OMB says it is seeking to “cancel awards already awarded that are in conflict with Administration priorities,” but there are rules for that too. The first Trump Administration instructed agencies to make it easier to terminate grants, while the Biden Administration made it harder. Depending on the timing and the agency, these directions will be captured differently in actual agreements. Even under the old Trump guidance, the grant agreement had to include the terms allowing for the termination, and the government’s actions had to be consistent with those terms. In some circumstances, HHS grantees can appeal to the Department Appeals Board. And they can go to the courts, under the Administrative Procedure Act, as several just did, winning a temporary reprieve.”

Boldness? Sloppiness? Stupidity? What’s obvious is that these decisions will cost money, both to defend and to repair damage. Who’s in charge here? Oh, yeah.

https://open.substack.com/pub/eatingpolicy/p/vast-carelessness?r=2133ns&utm_campaign=post&utm_medium=email

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