Montpelier, VT – Yesterday, President Trump’s Office of Management and Budget issued a memo ordering all federal agencies to withhold a wide range of funding already appropriated by Congress. Legal scholars and experts have stated that the memo is unconstitutional and contradicts federal law. A further memo issued this afternoon has driven additional uncertainty and fear among Vermonters and organizations. The Treasurer’s Task Force on the Federal Transition will meet to discuss the federal action tomorrow.
Trump’s memo purports to be effective today, January 28 at 5:00 p.m. and requires a freeze on certain “federal financial assistance,” expressly excluded from the memo is assistance that goes directly to individuals (like Social Security and Medicare). It particularly targets funding that is deemed to advance “Marxist equity, transgenderism, and green new deal social engineering policies[,] . . . DEI, woke gender ideology” and all funding that “may be implicated” by any of the dozens of executive orders the President has issued since January 20.
“This memo is the presidential equivalent of highway robbery, a direct threat to take money out of Vermonter’s pockets,” said Treasurer Pieciak. ““I have already heard from Vermonters that this action had caused confusion and uncertainty. Our office has been in touch with state treasurers across the country to assess the impact of this federal action and how best to respond. We will also continue to consult with our Federal Transition Task Force and state leaders to ensure Vermonters are protected from this action.”
As the legality of the memo is reviewed by the judicial system, Pieciak emphasized that the state is well-positioned financially to consider providing temporary bridge funding to state entities and nonprofits that might be impacted by the pause of federal funds. “Just as we’ve supported municipalities awaiting FEMA reimbursement for flood recovery, the Treasurer’s Office is actively reviewing how we could assist those who might be impacted.”
Federal dollars are a very significant source of revenue for Vermont, as they are in every state, making up roughly a third of Vermont’s state revenues in FY24 (Joint Fiscal Office FY2024 Fiscal Facts). The memo says that it does not affect federal payments provided “directly to individuals,” like Social Security and Medicare. But on its face, it appears to call into question other “federal assistance” to Vermont and every other state.
Even those within the federal government who received the memo are unsure exactly what it means. As the Wall Street Journal noted, it has “sowed widespread confusion” among the very people who, evidently, are meant to implement it. It has been correctly described as “cryptic, thinly reasoned,” and “transparently harmful [and] preposterous.”
Treasurer Pieciak, his staff, and his office’s Task Force on the Federal Transition, will aggressively work to protect Vermonters from reckless federal actions.
“State governments and non-profit entities rightly depend on the federal government keeping its word. President Trump threatens to break that promise,” said Treasurer Pieciak “I am proud to stand with other Vermonters – including our Attorney General – and other Treasurers nationwide to protect our residents.”
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