A freeze on all federal grants and loans

Summary

Marketplace Morning Report: A Freeze on All Federal Grants and Loans

Release Date: January 28, 2025

In the latest episode of the Marketplace Morning Report, host Sabri Benishore delves into a series of pressing economic and political developments, offering listeners insightful analysis and expert commentary. This episode covers a temporary halt on federal grants and loans, a significant move by Amazon workers to unionize, shifts in corporate compensation strategies, and the potential implications of the Congressional Review Act (CRA) on existing regulations.

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1. Temporary Freeze on Federal Grants and Loans

Sabri Benishore opens the episode by reporting a substantial policy shift: the Trump administration has issued a temporary pause on all federal grants and loans, effective immediately. This directive stems from a memorandum released by the Office of Management and Budget (OMB).

Nancy Marshall Genza provides a detailed breakdown of the memo, highlighting its controversial stipulations. The memo prioritizes funding for sectors deemed essential, such as energy and manufacturing, while labeling expenditures on initiatives like "Marxist equity and transgenderism" as wasteful. Notably, it exempts entrenched programs like Medicare and Social Security, as well as direct individual assistance.

A critical question arises regarding the impact on USDA loans, particularly those supporting Black and Native American farmers. Genza emphasizes the uncertainty surrounding the legality of this freeze, quoting Senate Minority Leader Chuck Schumer:

"The Trump administration must reverse course immediately," Schumer asserts, stressing that "Congress approved these investments and they are not optional" ([00:57]).

The memo mandates federal agencies to submit detailed reports on any paused programs by February 10th, leaving the doors open for future legislative challenges.

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2. Amazon Workers Take a Stand: Whole Foods Unionizes

Transitioning to labor news, Benishore reports that employees at a Whole Foods store in Pennsylvania have voted to unionize. This marks a significant milestone as it is the first instance of Amazon grocery workers seeking formal representation, diverging from previous unionization efforts focused on Amazon's warehouse and delivery sectors.

Nova Safo elaborates on the vote's narrow outcome, with 134 in favor and 100 against, as recorded by the National Labor Relations Board. The store's employees are advocating for a labor contract that ensures wage increases and acknowledges the physical demands of their roles. In response, Amazon maintains that it already offers competitive wages and benefits.

The unionization effort aligns with broader movements within Amazon, including ongoing negotiations with the Teamsters Union to organize delivery drivers and recent strikes by warehouse workers in New York City. Safo notes:

"The United Food and Commercial Workers International Union will now have to negotiate a labor agreement, which could take a while" ([02:11]).

This development signals a growing trend of organized labor pushing for better conditions within major corporations.

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3. Diminishing Prospects for Significant Raises in 2025

In corporate news, Benishore highlights findings from a recent Gartner survey targeting Chief Financial Officers (CFOs). The survey reveals a noticeable decline in the percentage of CFOs planning to implement substantial compensation increases. Specifically, those intending to raise average compensation by 4% or more have decreased from 86% in 2023 to approximately 60-61% in the current year ([03:03]).

This shift suggests increasing caution among corporate leaders, potentially reflecting economic uncertainties or shifts in business priorities. The trend may have broader implications for employee morale and economic growth, as compensation adjustments play a critical role in workforce satisfaction and retention.

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4. The Congressional Review Act: A Tool for Regulatory Rollback

A significant portion of the episode is dedicated to dissecting the Congressional Review Act (CRA), a legislative mechanism that has resurfaced with the advent of the new Congress and administration. Benishore introduces this topic with insights from Marketplace senior Washington correspondent Kimberly Adams.

Adams explains that the CRA, enacted in 1996, allows Congress to overturn regulations set by the previous administration with a simple majority in both houses, contingent upon the new president's support. This scenario requires a complete shift in political control, a condition that the Trump administration has navigated twice since taking office.

Addressing the potential impact, Adams references research from George Washington University's Regulatory Studies Center, which identifies approximately 1,300 Biden-era rules that could be targeted by the CRA. However, only about 100 of these are considered significant. Examples include:

• EPA's methane emissions rule
• EPA's mandate for water systems to eliminate lead pipes within a decade
• Consumer Financial Protection Bureau's prohibition on creditors using medical information in credit decisions ([05:05]).

Sarah Hay, a policy analyst at the Regulatory Studies Center, further emphasizes the selectivity likely to be exercised:

"Each regulatory rollback has to be handled separately," Hay notes, highlighting the logistical challenges Congress faces in attempting to overturn multiple regulations simultaneously ([06:00]).

Moreover, the CRA imposes restrictions that prevent federal agencies from reissuing similar rules in the future if they are rolled back, thus limiting future regulatory flexibility. Hay explains:

"If there's a subject that an agency regulated on and Congress is thinking about overturning it, but then they might say, oh, but maybe we want to issue a regulation on that ourselves in the future" ([06:28]).

This constraint may influence Congress to opt for more tailored adjustments rather than wholesale reversals of policies.

Adams concludes by cautioning that, despite the CRA's potential, practical hurdles such as limited legislative time and procedural requirements may impede comprehensive regulatory rollbacks.

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Conclusion

This episode of the Marketplace Morning Report offers a comprehensive overview of significant developments impacting federal policy, labor movements, corporate compensation strategies, and regulatory frameworks. Through expert interviews and detailed reporting, listeners gain a nuanced understanding of the intricate interplay between government actions and economic forces shaping the current landscape.

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Notable Quotes:

• Chuck Schumer ([00:57]): "The Trump administration must reverse course immediately," emphasizing the non-optional nature of Congress-approved investments.

• Sarah Hay ([06:38]): "If there's a subject that an agency regulated on and Congress is thinking about overturning it, but then they might say, oh, but maybe we want to issue a regulation on that ourselves in the future."

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For more insights and detailed reports, visit Marketplace at Marketplace Morning Report.

Transcript

[MultiCare Representative]

Our state has changed a lot in the last 140 years. We know because Multicare has been here guided by a single making our communities healthier. That comes from making courageous decisions, partnering with local communities to grow programs and services, and expanding healthcare access to those who need it most. Together, we're building a healthier future. Learn [e-mail].

[Sabri Benishore]

A freeze on all federal grants and loans from Marketplace I'm Sabri Benishore, in for David Brancaccio. The Trump administration is ordering a temporary pause of all federal grants and loans. It takes effect at the end of today. The order came yesterday in a memo from the Office of Management and Budget. As Marketplace's Nancy Marshall Genza reports, it leaves a lot of questions unanswered.

[Nancy Marshall Genza]

The memo says taxpayer dollars should be spent on things like energy and manufacturing, and their money is wasted on things like, quote, Marxist equity and transgenderism. It also says Medicare and Social Security benefits will not be impacted, and neither will assistance provided directly to individuals. So will USDA loans to black and Native American farmers be frozen? Another question Is this legal? Senate Minority Leader Chuck Schumer doesn't think so. He sent out a statement last night saying the Trump administration must reverse course immediately, adding that Congress approved these investments and they are not optional. They are the law. The memo does say that federal agencies should cancel awards in conflict with administration priorities. Quote, to the extent permissible by law, they have to submit detailed information on any program subject to the pause by February 10th. I'm Nancy Marshall Genser for For Marketplace.

[Sabri Benishore]

Workers at a Whole Foods store in Pennsylvania have voted to unionize. It's the latest organizing effort by workers at parent company Amazon, but this one is different. Most other efforts have focused on Amazon's warehouse and delivery workers. Marketplace's NovaSafo has more.

[Nova Safo]

The unionization vote at the Philadelphia Whole Foods store was close, 134, 100 against, according to the National Labor Relations Board. Still, it marks the first time that Amazon grocery workers have voted to unionize. The the focus has previously been mostly on the retail giant's delivery operations. Workers at the Whole Foods store say they want a labor contract that raises their wages and recognizes the physical demands they're under from having to work quickly. Amazon says it provides competitive wages and benefits at the store. The United Food and Commercial Workers International Union will now have to negotiate a labor agreement, which could take a while. Unionized Amazon warehouse workers in New York City have been trying for three years. Just before Christmas, they joined up with the Teamsters for a strike. The Teamsters Union is also trying to organize Amazon drivers. I'm Nova Safa for Marketplace.

[Sabri Benishore]

The chances of getting a fat raise are getting a little slimmer in 2025, that is. According to a new survey of chief financial officers by Gartner, the percentage of CFOs who said they were going to raise average compensation by 4% or more went from 86% in 2023 to just 60% 61% this year.

[MultiCare Representative]

For 140 years, MultiCare has been in Washington prioritizing long term solutions, partnering with local communities and expanding access to care. Together, we're building a healthier future. Learn [e-mail].

[Sabri Benishore]

The rules of Congress are byzantine and seemingly endless. And with the start of the new Congress and administration, a rarely used one has come out of the woodwork. It is something called the Congressional Review act and it could allow Republicans to roll back some, but not all, Biden era rules and regulations. Marketplace senior Washington correspondent Kimberly Adams is here to break it down. Good morning.

[Kimberly Adams]

Good morning.

[Sabri Benishore]

Remind us, what is the Congressional Review Act?

[Kimberly Adams]

It's a law from 1996 that allows Congress to overturn rules and regulations issued by the last administration with just a simple majority in both houses plus the President's signature. But it kind of takes a unique situation. You need to have a flip of control of the White House plus plus control of both houses of Congress by the new president's party. That's been a relatively rare scenario since the CRA became law, but Trump has had this situation both times he entered the White House.

[Sabri Benishore]

We have already seen the Trump administration rescind some Biden rules and regulations via executive order. But what sorts of policies might be at risk because of this cra?

[Kimberly Adams]

So there's a look back window in terms of how far back Congress can go to undo regulations. And it goes back to around August of last year. George Washington University's Regulatory Studies center has been tracking which of Biden's rules and regulations could be subject to the CRA and the team there figures there are about 1300 rules that Congress could target, although only about 100 or so are viewed as significant. Sarah Hay is a policy analyst there and she gave me a few examples.

[Sarah Hay]

There's a EPA rule targeting methane emissions and then also EPA's rule telling water systems to remove all lead pipes in the next 10 years. This the Consumer Financial Protection Bureau's rule that's prohibiting creditors from considering medical information.

[Kimberly Adams]

But of course it's up to members of Congress which, if any of these they're going to prioritize well, is there.

[Sabri Benishore]

Anything to stop Congress from just rolling back everything?

[Kimberly Adams]

Well, I mean, time is a big one. In addition to that limited look back window, each ruler regulation they want to overturn has to be handled separately. They can't just bundle a bunch of them together. And floor time in Congress is pretty, pretty limited. But the bigger issue is that if Congress uses the CRA to cancel out a policy, it means the affected agency can never issue a similar rule. Here's Sarah Hay at the Regulatory Studies center again.

[Sarah Hay]

And so if there's a subject that an agency regulated on and Congress is thinking about overturning it, but then they might say, oh, but maybe we want to issue a regulation on that ourselves in the future.

[Kimberly Adams]

And so to preserve that option for the future, members of Congress may want to leave it to the executive branch to tweak a rather than completely throw it out.

[Sabri Benishore]

All right. Marketplace is senior Washington correspondent Kimberly Adams. Thank you so much.

[Kimberly Adams]

You're welcome.

[Sabri Benishore]

Our producers are Nick Perez, Ariana Rosas, Alex Schroeder and Erica Soderstrom. Our senior producer is Meredith Garretson Morby In New York, I'm Sabru Benishore with the Marketplace morning report from 8pm American Public Media.

[MultiCare Representative]

For 140 years, MultiCare has been in Washington prioritizing long term solutions, partnering with local communities and expanding access to care. Together, we're building a healthier future. Learn [e-mail].