White House Clarification Means Most IIJA Dollars Continue Flowing

What happened: The White House Office of Management and Budget (OMB) issued a special memorandum Jan. 22 attempting to clarify an earlier Executive Order (EO) that led to the temporary pause of all federal highway reimbursements Jan. 21.

The original EO, one of many signed by President Donald Trump following his swearing-in Jan. 20, targeted investments for electric vehicle (EV) charging infrastructure. As written, the directive appeared to pause all funding, including for highway and transit projects receiving federal dollars under formula programs. For much of Tuesday afternoon, that resulted in the Federal Highway Administration (FHWA) halting repayments to states and localities for work completed.

ARTBA made several contacts with senior staff at the U.S. Department of Transportation (U.S. DOT), Capitol Hill and colleague associations, expressing serious concern over this stoppage and requesting clarification to avoid any unintended consequences under the EO. FHWA turned its system back on late Tuesday afternoon, with the OMB memo following soon after clarifying that the EO pause was focused on the EV programs.

Current situation: FHWA is continuing to reimburse state departments of transportation and localities for construction work completed, both for formula projects and discretionary grants with an agreement in place.

ARTBA has learned that U.S. DOT has paused awarding of new grants and moving forward on other discretionary projects – announced by the Biden administration in its waning days – without a signed grant agreement in place. This pause is typical of a new presidential administration.

What’s next: President Trump’s nominee for U.S. Transportation Secretary, former Wisconsin Rep. Sean Duffy, is expected to be confirmed by the Senate soon and build out his department’s team. He has made verbal commitments to lawmakers that he will get the discretionary grant process moving again. However, in considering future awards, the Trump administration will likely change many of the criteria put in place by its predecessor.

ARTBA will continue working with all parties to ensure disruptions to the funding pipeline, including payments to contractors, are minimized.