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Uncertainty Around USDA’s Rural Development Funding Continues Amidst Staffing Cuts and Office Closures [1]
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Date: 2025-04-16
Reductions in staff and office closures loom at the U.S. Department of Agriculture (USDA) as the agency has opened a ‘path’ to release $10.8 billion, which includes $2.5 billion in loan subsidies, between grant awards and obligated congressional funding for three rural energy programs funded by the Inflation Reduction Act.
On March 25, 2025, Secretary of Agriculture Brooke Rollins announced that the USDA would release funding that was previously obligated to recipients under REAP, New ERA, and PACE. Funding that has been obligated carries a legally-binding commitment, according to the Congressional Budget Office.
Last month’s announcement also said that recipients of the funding will have 30 days to revise their project plans to align with President Donald Trump’s Unleashing American Energy executive order, which, among other actions, revokes Biden-era clean energy executive orders and calls for energy production and exploration on federal lands and waters. The USDA has set up a website for funding recipients to submit their proposed project changes before the end of April.
Funding for such programs was previously frozen by the Trump administration. On April 15, 2025, a federal judge ruled that the USDA, Secretary of Agriculture Brooke Rollins, Office of Management and Budget (OMB) and Director of the National Economic Council (NEC), among several other federal agencies and high-level administrators, were unlawful in their actions freezing federal funding.
“The broad powers that OMB, the NEC Director, and the five Agencies assert are nowhere to be found in federal law,” wrote Judge Mary McElroy of the U.S. District Court for the District of Rhode Island. McElroy was nominated for her current position by President Donald Trump in 2019.
The order instructs the USDA and other agencies to take “immediate steps” to resume the processing, disbursement, and payment of already-awarded funding under the Inflation Reduction Act and the Infrastructure Investment and Jobs Act. McElroy gave the Trump administration until 5:00pm EST on April 16, 2025 to file a status report with information on how they will comply with the order’s directives.
Funding for the three rural energy programs—the Rural Energy For America Program (REAP), Empowering Rural America (New ERA) program, and Powering Affordable Clean Energy (PACE) program —is managed by the USDA’s Rural Development arm. The department provides grants and low-cost loans to farmers, small businesses, and rural electric cooperatives to expand electrification and clean energy.
New ERA and PACE were both established by the Inflation Reduction Act after the climate legislation passed in 2022. REAP, which has been around for decades, received an injection of funding from the law.
Jeremy Fisher, a senior strategy and technical advisor with the Sierra Club’s Environmental Law Program, said it is unclear whether or not it will be necessary for recipients to change their projects in order to receive funding.
“I think an optimistic read of this would be that awardees are actually not expected to make changes to their projects and just continue on forward,” said Fisher. “This is opening the opportunity to change narratives.”
The March 25 announcement describes the 30-day revision process as an opportunity for rural electric providers and small businesses to “refocus” their projects while eliminating “far-left” Biden-era climate features and DEIA—Diversity, Equity, Inclusion, and Accessibility—from their projects. Fisher said that for most awardees, such elements are not a key part of the work that was proposed.
“I think there’s not really much for a farmer or a rural business that said, ‘We intend on achieving savings for our business by putting in this solar panel’ to say about DEI or ‘far-left’ climate initiatives,” Fisher said. “They’re pretty clear it’s about cost savings and affordability.”
For Keith Dennis, who works as the president of the Beneficial Electrification League and helps rural electric cooperatives navigate funding opportunities, the announcement represents a determination on behalf of the Trump administration that the three rural energy programs are “good to go.”
This comes after funding had been paused by the Unleashing American Energy executive order on January 20, 2025, after which time the programs were subject to review.
“I think going into the program, folks knew that at a minimum, there were going to be three different administrations,” said Dennis. “It could be the same president for eight years, but there’s no way you could have the same president for 10 years, so I think they made pretty durable projects that would withstand political changes.”
Reading through the language in the policy section of the Unleashing American Energy executive order, Dennis said that some of the points align with those of the rural energy programs, which he called “bread and butter” projects that make the grid more secure and lower costs for consumers.
“That section could be written about the New ERA program, to make sure there’s ‘reliable energy readily accessible in every state and territory’—that’s essentially what the program does,” Dennis said.
Even as Dennis and Fisher agree that funds are likely to start flowing when the 30-day revision period ends at the end of the month, concern lingers that staffing changes at USDA could impact the money’s disbursement.
On the Chopping Block
At the same time as the funding for Rural Development’s energy programs is set to be released, a second “deferred resignation” offer has been sent to USDA employees. Further job cuts are expected to follow later this spring via a “reduction in force”, or RIF. This comes as plans circulate to close and relocate USDA office space in Washington, D.C., and around the country.
Farah Ahmad, former Deputy Under Secretary for Rural Development under President Joe Biden, said that changes in staffing could pose challenges for the department’s operations.
“You can’t control in a deferred resignation who’s accepting it, and so there could be a really lopsided way of who’s left,” said Ahmad. “It’s going to be very hard for Rural Development, not only with a lack of capacity, but actually that uneven capacity and expertise I think will result from the mass reduction that is expected.”
The USDA’s Rural Development arm has about 4,800 employees between the agency’s Washington, D.C. headquarters and 400 field offices at the state and local levels across the country. Typically, over half of the department’s staff are based at field offices, Ahmad said. This is one of the department’s biggest strengths, she said.
“USDA really is seen as that trusted government partner in these communities,” Ahmad said. “A good share of the staff live and work in the communities they serve, meaning they’re from the rural communities that they’re helping, or they’re nearby, and have strong and deep connections.”
Ahmad said a “large chunk” of Rural Development staff is likely to take this voluntary buyout. That could bring the department’s numbers down to 3,000 employees, which Ahmad said would be a “massive loss.”
After the Inflation Reduction Act passed, $100 million was appropriated to Rural Development to cover administrative costs and salaries, including for employees and contractors brought on to assist with managing programs like REAP, New ERA, and PACE.
That money has been fully allocated, but Fisher said the current status of the jobs it funded is unclear, given the changes at the agency under the Trump administration.
“We understood during statements from USDA in the past that they were bringing on contractors in order to be able to accelerate the process of being able to get these loans and grants out the door,” Fisher said.
As of April 4, 2025, at least six contracts with USDA Rural Development have been terminated.
Ahmad said that at the state level, some Rural Development offices are operating at half the staffing levels of a few months ago. Farmers, small businesses, and others who rely on services from Rural Development are likely already feeling the impact of this reduced capacity in the form of slower response times to email inquiries and in-person appointment requests, she said.
“My guess is they’ve already been feeling it for weeks, and that’ll just continue down the road,” Ahmad said.
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