Trump pauses on grants, aid leaves federal cyber programs in state of confusion  – CyberScoop

A series of Trump administration maneuvers to freeze federal aid has thrown cybersecurity grant programs into doubt for recipients ranging from state governments to small businesses to foreign allies.

An Office of Management and Budget memo sent Monday and that went into effect Tuesday directs federal agencies to “temporarily pause all activities related to obligations or disbursement of all Federal financial assistance.” There are dozens of cybersecurity-specific federal grant programs and broader grant programs across the federal government that can be used to bolster cyber defenses, accounting for billions in past aid.

It follows a separate pause last week on aid from two laws that could impact federal cyber grants to states, and a 90-day State Department halt to foreign aid grants that could likewise impact cyber assistance.

A federal judge temporarily halted the order Tuesday afternoon, which accounts for some of the doubt about what comes next. But it’s also not obvious to some observers and participants about how the specifics of the freezes will occur.

“It’s unclear what exactly [the OMB memo] means,” said Bob Kolasky, former head of the Department of Homeland Security’s National Risk Management Center, who served under both presidents Joe Biden and Donald Trump. The pause is “creating uncertainty” around things like how program priorities of delivery rates change, which could lead to a “loss of momentum,” he said.

Mississippi Rep. Bennie Thompson, the top Democrat on the Homeland Security Committee, was more blunt.

“As we speak, departments and agencies across government are scrambling to understand the full scope of the President’s slapdash Executive Orders,” he said. “For political theater, the President is throwing the entire Federal government into chaos and our adversaries are watching.”

There is “zero reason” to freeze grants under the four-year, $1 billion State and Local Cybersecurity Grant Program, which had bipartisan support and “is necessary to help our states, cities, and towns protect themselves from ever-evolving cyber attacks on their networks and critical infrastructure necessary for our daily lives,” Thompson said, accusing the administration of searching for money to give tax cuts to billionaires.

Alex Whitaker, director of government affairs for the National Association of State Chief Information Officers, said in a StateScoop story Tuesday that while the future of that $1 billion program is unclear, it’s one of the organization’s top priorities and has been hugely beneficial.

There are also fears about how the pause in foreign aid could impact foreign cyber vulnerabilities and goodwill toward the United States.

Federal cyber grants go beyond those at DHS. The Labor Department has a program for job training through higher education. The National Science Foundation’s CyberCorps Scholarship for Service offers scholarships in exchange for work at government agencies. The Defense Department has a scholarship program geared toward recruiting and retaining cyber talent.

It’s possible, though, that the impact on federal cyber aid could be muted or even beneficial, some said. Many states have already spent grant money from the last batch of State and Local Cybersecurity Grant Program funds, a $280 million disbursement, said Chris Cummiskey, a former top DHS official.

Cummiskey, now CEO of his own strategic consulting firm, said another area to watch is Trump administration language in the OMB memo about scrutinizing whether grant programs run afoul of the issues outlined in the president’s executive orders, such as banning federal diversity, equity and inclusion initiatives. “I would think that most programs are not running contrary to the stated goals of the EOs” and could “come off the list pretty quickly.”

Said Kolasky, now senior vice president for critical infrastructure at Exiger: “If they’re looking at ways to more effectively streamline getting the assistance out so that states can use it for their top needs with a little less of a heavily burdensome process, that could be a good thing.”

But there are also reasons to question how highly the new administration views those programs. DHS Secretary Kristi Noem has made it clear that she’s “not a fan” of State and Local Cybersecurity Grant Program grants, Cummiskey said. And Trump has criticized the Federal Emergency Management Agency — which co-administers grants through that program — to the point of questioning its future existence and issuing an executive order to review it.

Federal agency officials should move carefully until the legal questions about how federal funds are allocated and spent are addressed, said Bruce McConnell, the former deputy undersecretary for cybersecurity at DHS.

“We don’t yet know what the implications are since the legality of parts of the order is disputed,” said McConnell, a distinguished fellow at the Stimson Center. “Organizations potentially affected should exercise fiscal caution until the dust settles.”

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