Topline
The Trump administration paused all federal financial assistance programs and ordered agencies to conduct a review of whether the programs align with the executive orders President Donald Trump issued last week—a surprise decision leaked Monday that could impact tens of billions of dollars in government spending.
President Donald Trump during a news conference in the Roosevelt Room of the White House on January … [+]
Key Facts
The temporary moratorium, detailed in an Office of Management and Budget memo first obtained by independent journalist Marisa Kabas and published on Bluesky Monday, applies to all federal grants, an unnamed source familiar with the order told the Washington Post.
The pause becomes effective at 5 p.m. EST Tuesday and agencies are required to report to the Office of Management and Budget by Feb. 10 which programs and activities they have paused.
Agencies must examine which programs conflict with Trump’s executive orders to halt government spending that falls under “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal,” according to the memo.
All federal agencies must also task “a senior political appointee” to monitor spending “to ensure federal financial assistance conforms to administration priorities.”
The pause does not apply to Social Security and Medicare payments or “financial assistance provided directly to individuals,” and OMB could grant other exceptions on a “case-by-case basis.”
Big Number
$3 trillion. That’s how much the federal government spent on assistance in the 2024 fiscal year, the memo reportedly saidthough it’s unclear where the figure is from.
What Programs Will The Grant Funding Pause Cover?
The language in the order can be broadly interpreted but could apply to a sweeping range of funding programs across education, medical research, infrastructure programs, small business loans, housing and more. Grants that have been awarded but not disbursed are also subject to the pause, according to the Associated Press. OMB Acting Director Matthew Vaeth wrote in the memo that “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.”
How Is Foreign Aid Impacted?
Trump last week ordered a separate, 90-day freeze on “foreign development assistance” pending a foreign policy review. A second, more sweeping order issued later in the week by the State Department, also halts foreign aid grants for 90 days, according to multiple reports. Military assistance for Israel and Egypt and emergency food aid is exempt from the freeze, the Wall Street Journal reported. The U.S. Agency for International Development put dozens of officials suspected of actions “designed to circumvent the President’s Executive Orders” on leave, according to multiple reports. The directive appears to apply to weapons assistance for Taiwan and Ukraine and mandates stop-work orders for nongovernmental organizations and aid groups to prohibit them from spending U.S. aid that’s already been distributed, the Journal reported.
How Have Democrats Reacted To The Grant Pause?
The memo has created widespread alarm and confusion among Democrats and entities that rely on federal financial assistance. Sen. Chuck Schumer, D-N.Y., cast doubt on the legality of the order, writing on X that “Congress approved these investments and they are not optional, they are the law.” Sen. Amy Klobuchar, D-Minn., questioned whether it meant cancer trials at the National Institutes of Health would be put on hold, and Sen. Patty Murray, D-Wash., and Rep. Rose DeLauro, D-Conn., predicted “far-reaching consequences” in a letter to Vaeth.
Further Reading
Trump’s Executive Orders: Here Are All His Big Day-One Actions On Immigration, Energy, TikTok And More (Forbes)
Trump Expected To Sign Executive Orders Banning DEI, Transgender Service Members From Military (Forbes)
Trump’s Diversity Orders Rattle CEOs: What Companies Should Know About New DEI Rules (Forbes)
