Can Trump Change Federal Funding Rules with Executive Orders?

In just a few weeks, President Donald Trump’s administration has shown its intense determination to change the way federal funds are distributed.

The White House has sought to either freeze, cut or condition federal funding, in order to fulfill the goals of Trump’s MAGA movement. In one of the most contentious actions of this administration’s first days, the acting head of the Office of Management and Budget (OMB) sent out a two-page memo (PDF) on Jan. 27 directing all federal agencies to temporarily pause funding related to “foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”

A federal judge temporarily suspended the OMB memo two days later, but by that point panic and confusion had spread nationwide about what funding would be affected. The administration soon after rescinded the memo. White House Press Secretary Karoline Leavitt wrote on X that this “is simply a rescission of the OMB memo” and that “the President’s EOs on federal funding remain in full force and effect and will be rigorously implemented.”

Leavitt was referring to the multiple executive orders that Trump has signed since taking office that explicitly call for major changes to federal funding rules — all of which could impact the hundreds of nonprofit organizations, private companies and academic institutions that depend on federal grants and contracts.

There’s no historical precedent for this barrage of executive orders. So the key question is: Does the president have the power to change how federal funding is spent with a single stroke of a pen?

One of Trump’s orders — Ending Radical Indoctrination In K–12 Schooling — calls for officials to eliminate “federal funding or support for illegal and discriminatory treatment and indoctrination in K–12 schools, including based on gender ideology and discriminatory equity ideology.”

In another one — Unleashing American Energy — Trump ordered agencies to “immediately pause the disbursement of funds” that go to build electric vehicle charging stations. And the White House has even threatened to halt research and education grants to hospitals that provide gender-affirming care to transgender individuals under the age of 19.

Other executive orders target federal funding of “gender ideology” — the term used by the White House to discredit the existence and health care needs of transgender individuals — and any programming and staffing across the federal government related to diversity, equity, and inclusion (DEI).

Who controls federal funding?

Although these executive orders are full of direct and bold language, legal experts say that a lot of what they call for goes against the law.

“We’ve never seen a president in history do so much that’s clearly illegal, so fast,” said Erwin Chemerinsky, dean of the School of Law at UC Berkeley.

As mandated by the U.S. Constitution, Congress is the branch of government with the power to tax and spend public money. Every year, the Senate and the House of Representatives must agree on a budget that will fund federal agencies, along with programs that distribute money to state and city governments, research institutions, nonprofit organizations and federal contractors.

Once a budget has been approved, it is the responsibility of the president to see that these funds reach who they are meant for. If Congress sets aside $100 billion for education, the White House has to ensure that $100 billion goes to education spending, and is not used for something else — like the military. But if the president wants to freeze certain funds, he or she will have to send a formal request to Congress and wait 45 days for their approval (PDF).

The funds that the federal government is currently distributing were already confirmed by Congress in previous budget agreements — so by law, Trump is required to fund programs that he may disagree with until every dollar that Congress allocated is spent.

And an executive order can’t override this process either. “In our legal system, executive orders are pretty low on the hierarchy of types of law,” said Dave Owen, professor at UC Law San Francisco, whose research focuses on environmental law and water resource management.

“An executive order can’t change the Constitution. An executive order also can’t change legislation,” he explained. “If Congress enacts spending provisions — for example, funding programs for electric vehicles — and a new president comes in and doesn’t like those programs, he has no authority to just stop spending on those programs.”

When Congress passed the Inflation Reduction Act in 2022, it included millions of dollars in tax credits for individuals and businesses that install electric vehicle chargers, something that the Biden administration hoped would encourage more people to use electric vehicles. Joe Biden may no longer be the president, but the Congressional Budget and Impoundment Control Act requires Trump to still fund this project until the designated dollars run out — despite his executive order that claims otherwise.

What about checks and balances?

If one branch of government is exceeding their authority, the Constitution outlines a system of checks and balances where the other branches can push back.

More than 50 years ago, Congress passed a law that controls how the president distributes federal funding — the Congressional Budget and Impoundment Control Act of 1974 (PDF) (CBA) — in response to President Richard Nixon’s attempts to freeze billions of dollars in federal funding for programs he did not support. This legislation not only requires the president to spend all the money that Congress has set aside in the federal budget, but to spend it in the way that Congress intended.

“Where there’s a federal statute that allocates funds, the president cannot choose to not spend those funds — that’s called impoundment,” said Chemerinsky. “It violates the separation of powers, because it undermines Congress’ spending power.”

Impoundment is exactly what many members of Congress accused Nixon of doing in the 1970s: directing federal agencies to withhold funds from projects he thought were wasteful (PDF). And now this law, originally designed to limit Nixon’s power, may be what decides how much Trump can actually impact the process that distributes federal funds — and how effective these executive orders might be.

But Congress, where Republicans control both chambers, has so far shown little interest in fighting against Trump’s barrage of executive orders.

The other option is through the courts, said UC Berkeley’s Chemerinsky. “There are certainly many things President Trump is doing that are illegal and they require lawsuits to challenge them.”

Federal judges can temporarily block or overturn an executive order if they believe it goes against the Constitution or established law. Individual states and civil rights groups across the country have already announced lawsuits against dozens of Trump’s executive orders. On Feb. 4, for example, the American Civil Liberties Union (ACLU), along with transgender young adults in Maryland, sued the federal government over Protecting Children From Chemical And Surgical Mutilation, the executive order that would block research and education grants that offer gender-affirming care.

Earlier that same week, two federal judges — one in Maryland and another in Washington state — issued a nationwide preliminary injunction stopping the president’s executive order that would severely limit which babies born in the U.S. are eligible for birthright citizenship. As long as that preliminary injunction exists, the Trump administration cannot move forward with its plans to change birthright citizenship.

Couldn’t Trump still make these changes regardless?

In several of these executive orders regarding funding, Trump ordered federal departments to start reviewing existing contracts and grants that deal with DEI, environmental justice and the needs of transgender people.

It is possible for the federal government to break an existing contract. However, the government — just like anybody else — is bound by the agreements it signs and can be sued by the other party for breach of contract. And if the government loses this kind of lawsuit, “it’s going to have to pay damages,” said UC Law’s Owen.

“That means we will pay,” he said. “The American taxpayer is going to be on the hook for massive legal fees and then also a massive breach of contract damages.”

Another option for the Trump administration is wait for Congress to start negotiations for the next fiscal year budget to then push for changes in funding rules.

Congress is still finalizing a budget resolution for the current fiscal year before the March 14 deadline to avoid a government shutdown. If they reach an agreement, Congress will then have to approve a comprehensive budget for the 2025–2026 cycle by Sept. 30, and lawmakers will be looking at recommendations from White House officials to decide what to fund — or cut — across the federal government. This list could include grants and programs that Trump disagrees with.

“This administration wants to politicize everything it can,” said Owen. “In previous administrations, even as the administration had pretty strong policy commitments, there were some things like grant administration for medical or scientific research that were left relatively nonpartisan — and that’s not happening this time around.”

But even though the legal future of these executive orders remains uncertain, individuals and institutions are already feeling the impact of Trump’s actions.

On Feb. 5, Trump signed the order titled “Keeping Men Out of Women’s Sports,” which threatens universities and athletic associations — like the NCAA — with rescinding all federal funds if they allow transgender women to play on the same teams as cisgender women. Within 24 hours, the Department of Education began an investigation into San José State University, where transgender athletes can play on the team that matches the gender they identify with. The investigation will look into whether SJSU discriminated against cisgender female athletes and jeopardized their right to equal opportunity and fair play.

The NCAA, the largest governing body for college athletics in the country, soon after confirmed that it would limit the participation of transgender athletes.

That same week, Children’s Hospital Los Angeles announced that it is pausing new hormone therapies for transgender patients under the age of 19 as the hospital continues “to carefully evaluate the [Protecting Children From Chemical And Surgical Mutilation] Executive Order to fully understand its implications.”

It’s important to remember that the federal government has not yet actually frozen funds for any hospital or research institution due to their care for transgender people. But “there’s no doubt that the president’s executive orders are intimidating people,” said UC Berkeley’s Chemerinsky.

“My hope is that Congress will check the president,” he said, “but that ultimately, public opinion will be a check on the president.”

This story includes reporting from KQED’s Marisa Lagos and Samantha Lim.