Aug. 11 Federal Update: President Trump Signs Executive Order to Increase Oversight of Federal Grantmaking

On Aug. 7, President Trump signed an executive order to strengthen the oversight and coordination of agency grantmaking as a means for increasing the accountability of the use of public funds. The order directs each agency head to designate a senior appointee to create a process to review new funding opportunity announcements and discretionary grants to ensure that they are consistent with agency priorities and the national interest. The order also encourages the use of plain language and interagency coordination to promote consistency and eliminate redundancy.

The executive order specifies that discretionary awards are not to be used to fund, promote, encourage, subsidize, or facilitate any initiatives that compromise public safety or promote anti-American values, racial preferences, illegal immigration, and the denial by the grant recipient of the sex binary in humans or the notion that sex is a chosen or mutable characteristic.

For future discretionary grant agreements terms and conditions, the order encourages language to prohibit recipients from directly drawing down general grant funds for specific projects without the affirmative authorization of the agency. It also recommends requiring grantees to provide written explanations or support, with specificity, for requests for each draw down.

For existing discretionary grants, the order directs agencies to revise their terms and conditions to permit their termination if an award no longer effectuates the program goals or agency priorities. In the case of a partial termination by the recipient, language should be standardized to include the grant’s termination if the agency determines that the remaining portion of the federal award will not accomplish the purposes for which the award was made.

Federal Agencies Pause Policies Restricting Eligibility of Certain Public Benefits

The Departments of Labor, Education, Justice, and Health and Human Services recently released notice of restricted eligibility for specific populations of immigrants and citizens receiving public benefits through the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. The named benefits include programs that increase access to community mental health care, nutrition, housing support, and early childhood education.

Lawsuits were filed by 20 states and the District of Columbia in response, alleging federal agencies did not follow the required rulemaking process in issuing new immigration verification requirements.

The plaintiffs reached an agreement with the Trump administration to temporarily pause the policies’ enforcement until Sept. 3. The agreement is effective for the District of Columbia and the following states: New York, Washington, Rhode Island, Arizona, California, Colorado, Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Vermont, and Wisconsin.

Senate Committee Approves FY 2026 Labor, HHS, Education Appropriations Bill

On July 31, the Senate Committee on Appropriations approved the FY 2026 Labor, Health and Human Services, Education, and Related Agencies Appropriations Act by a vote of 26 to 3.

The bill increases discretionary funding for the U.S. Department of Health and Human Services by $446 million, compared to FY25. Key funding increases were approved for the Child Care and Development Block Grant, Head Start, and IDEA Special Education State grant programs. Additionally, the bill increases funding for the Substance Use Prevention, Treatment, and Recovery Services Block Grant, State Opioid Response grants, and the 988 Suicide Prevention Lifeline. It restores dedicated funding for the LGBTQ+ youth specialized services line.

The Senate Committee on Appropriations voted to maintain funding for the Administration for Community Living and increase funding for the Low Income Home Energy Assistance Program (LIHEAP). For further information, read the detailed summary of the bill published by Vice Chair of Appropriations Sen. Patty Murray (D-Wash).

Head Start Approves Temporary Supplemental Funds for Nutrition and Healthy Eating

The Administration for Children and Families released program instructions outlining the process for Head Start grant recipients to request one-time supplemental funding to promote nutrition services and healthy eating for enrolled children and families. Funds may be allocated toward food service upgrades, materials, supplies and equipment, nutrition education resources, or non-recurring personnel costs.

Grant recipients are encouraged to assess programmatic and community nutrition and health needs and consider the immediate, interim, and long-term impact and associated costs. Applications will be reviewed on a rolling basis and the priority deadline is Aug. 22.

Senate Holds Hearing to Address Elder Abuse & Neglect

On July 30, the U.S. Senate Special Committee on Aging held a hearing to discuss elder abuse and neglect. Senators and witnesses emphasized the importance of preventive approaches and maintaining a comprehensive network of support, especially since several instances of older abuse and neglect remain undetected.

Specifically, witnesses discussed the importance of Area Agencies on Aging to ensure older adults have access to necessary resources and opportunities for support through trusted relationships. They recommended equipping multidisciplinary teams with specialized training to grow community awareness and increase support for caregivers. Witnesses also encouraged the reauthorization of the Older Americans Act and strengthening the enforcement of federal standards in nursing facilities.

Sector Updates from the Judiciary

District Court Pauses Conditions on Domestic Violence Grants
The U.S. District Court for the District of Rhode Island issued a temporary restraining order to prevent the U.S. Departments of Health and Human Services and Housing and Urban Development from enforcing certain grant requirements. Specifically, the policies enabled the departments to deny funding for programs that support diversity, equity, and inclusion initiatives.

The temporary restraining order is effective for a coalition of 22 organizations that filed the lawsuit as the court considers an injunction.

District Court Dismisses Lawsuit Against Sanctuary Policies
The U.S. District Court for the Northern District of Illinois dismissed a lawsuit filed by the Trump administration that alleged sanctuary policies obstruct federal efforts to enforce immigration laws. While sanctuary cities do not have a single definition, they typically refer to a broad range of policies that limit cooperation with federal immigration enforcement actions.

The Trump administration argued Illinois’ city, county, and state laws restrict information sharing with federal law enforcement officials and prevent immigration agents from identifying certain individuals.

Judge Lindsay Jenkins determined that the U.S. lacks standing to sue over sanctuary policies, as Illinois’ decision to enact the sanctuary laws is protected by the 10th Amendment. The 10th Amendment reserves any power for the states that is not explicitly granted to the federal government or denied to the states through the U.S. Constitution.

District Court Issues Nationwide Injunction Against Birthright Citizenship Executive Order
The U.S. District Court for the District of Massachusetts issued a nationwide injunction to pause an executive order that would restrict birthright citizenship to newborns with at least one parent who is a U.S. citizen or green card holder.

The lawsuit was filed by 18 states, alleging that they would suffer significant financial harm if the executive order were to take effect and citing the complexities of a patchwork system of citizenship.

Appeals Court Dismisses Lawsuit Challenging Washington Law Regarding Care for Transgender Youth
The U.S. Court of Appeals for the Ninth Circuit determined that parents do not have the legal authority to file a lawsuit against a Washington law that addresses the rights of transgender runaway youth who seek gender-affirming care at shelters.

The 2023 state law, SB 5599, excuses shelters from notifying parents whose children seek gender-affirming treatment and reproductive health services when the shelters have concerns that a notification could lead to parental abuse or neglect.

The lawsuit also addressed legislation governing outpatient treatment without parental consent and the obligations of state health officials to work with parents of runaway children.

District Court Pauses Medicaid Cuts to Planned Parenthood
The U.S. District Court for the District of Massachusetts issued a preliminary injunction against a provision of the recently enacted tax and spending bill, H.R. 1. The provision would prevent Planned Parenthood and its members from receiving Medicaid funding if they continue to provide abortions.

U.S. District Judge Talwani determined that the law likely violates the U.S. Constitution by specifically excluding Planned Parenthood’s health centers due to their status as abortion providers. The judge maintained that the law also violates Planned Parenthood members’ equal protection rights under the U.S. Constitution’s Fifth Amendment.

While litigation continues, the U.S. Department of Health and Human Services cannot apply the provision to exclude any of Planned Parenthood’s health centers from Medicaid reimbursements.

District Court Pauses Termination of LGBTQ+ Health Research Grants
The U.S. District Court for the District of Maryland issued a preliminary junction, blocking the cancellation of more than $800 million in National institutes of Health (NIH) LGBTQ+ health research grants. The grants funded research considering issues related to gender dysphoria, mental health, and HIV/AIDS care.

The lawsuit was filed by the American Association of Physicians for Human Rights against the NIH and Department of Health and Human Services. The plaintiffs alleged that by targeting only certain, predominantly LGBTQ+-related research projects for funding cuts, the NIH engaged in unlawful discrimination.

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