The White House budget office has ordered a pause on all federal grants and loans, according to an internal memorandum sent Monday, potentially impacting trillions in government spending and halting public programs that affect millions of Americans.
Federal agencies “must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance,” White House Office of Management and Budget acting director Matthew Vaeth said in the memorandum, a copy of which was obtained by CNN. The pause also blocks the issuance of new grants.
The memo specifies that the pause will not affect Social Security or Medicare benefits, nor does it include “assistance provided directly to individuals.”
The freeze on federal assistance is slated to take effect at 5 p.m. Tuesday. It marks the latest move by the Trump administration to exert control over federal funding, even that which has already been allocated by Congress.
“This temporary pause will provide the Administration time to review agency programs and determine the best uses of the funding for those programs consistent with the law and the President’s priorities,” Vaeth wrote.
The memo suggests that the pause is in line with President Donald Trump’s executive orders last week.
The pause also applies to “other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal,” according to the memo.
“Career and political appointees in the Executive Branch have a duty to align Federal spending and action with the will of the American people as expressed through Presidential priorities,” Vaeth wrote.
“Financial assistance should be dedicated to advancing Administration priorities, focusing taxpayer dollars to advance a stronger and safer America, eliminating the financial burden of inflation for citizens, unleashing American energy and manufacturing, ending ‘wokeness’ and the weaponization of government, promoting efficiency in government, and Making America Healthy Again,” he continued. “The use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve.”
According to the memo, the budget office “may grant exceptions allowing Federal agencies to issue new awards or take other actions on a case-by-case basis.”
“To the extent required by law,” agencies may also take “certain administrative actions” like closing out grants, it states.
The memo calls on agencies to submit to OMB “detailed information on any programs, projects or activities subject to this pause” by February 10.
Sen. Patty Murray of Washington state and Rep. Rosa DeLauro of Connecticut — the top Democratic appropriators in Congress — wrote a letter to the White House on Monday night outlining their “extreme alarm” with the move.
“The scope of what you are ordering is breathtaking, unprecedented, and will have devastating consequences across the country,” the lawmakers wrote. “We write today to urge you in the strongest possible terms to uphold the law and the Constitution and ensure all federal resources are delivered in accordance with the law.”
Senate Minority Leader Chuck Schumer also quickly criticized the pause.
“Congress approved these investments and they are not optional; they are the law,” the New York Democrat said in a statement Monday night. “These grants help people in red states and blue states, support families, help parents raise kids, and lead to stronger communities.”
Schumer added that the action jeapordizes “billions upon billions of community grants and financial support that help millions of people across the country.”
“It will mean missed payrolls and rent payments and everything in between: chaos for everything from universities to non-profit charities,” he said.