The White House budget office has issued a directive to temporarily pause all federal grants and loans, as detailed in an internal memorandum sent on Monday. This move could impact trillions of dollars in government spending and halt public programs that affect millions of Americans.
The memorandum instructs federal agencies to suspend all activities related to the obligation or disbursement of federal financial assistance. This includes stopping the issuance of new grants.
However, the memo clarifies that the pause will not affect Social Security or Medicare benefits, nor will it impact assistance provided directly to individuals.
Set to take effect at 5 p.m. Tuesday, the freeze marks another effort by the Trump administration to exercise control over federal funding, including money that has already been allocated by Congress.
Matthew Vaeth, acting director of the White House Office of Management and Budget, explained in the memo that the pause will allow time for the administration to review agency programs and determine how best to allocate funding in accordance with the law and presidential priorities.
The White House budget office has extended the pause on federal grants and loans to include additional relevant activities, such as financial assistance for foreign aid, nongovernmental organizations, diversity, equity and inclusion (DEI) programs, gender ideology initiatives, and the Green New Deal. This directive was outlined in an internal memo.
The memo emphasizes that both career and political appointees within the Executive Branch must align federal spending with the President’s priorities, reflecting the will of the American people. The administration aims to focus taxpayer dollars on initiatives that strengthen and protect the nation, reduce inflation’s financial burden, boost American energy and manufacturing, combat “wokeness,” and promote government efficiency and public health.
The memo further criticizes the use of federal resources to advance policies related to Marxist equity, transgenderism, and the Green New Deal, calling them a waste of taxpayer money that doesn’t benefit citizens’ everyday lives.
While the pause will impact many programs, the memo notes that the budget office may grant exceptions on a case-by-case basis. Agencies may also take necessary administrative actions, such as closing out grants, as required by law.
Federal agencies are instructed to submit detailed reports on the affected programs by February 10.
The move has drawn sharp criticism from lawmakers. Senator Patty Murray of Washington and Representative Rosa DeLauro of Connecticut expressed “extreme alarm” over the pause, describing its scope as unprecedented and harmful. They urged the White House to uphold the law and deliver federal resources according to established guidelines.
Senate Minority Leader Chuck Schumer also condemned the decision, stressing that the grants approved by Congress are law and not optional. He warned that the freeze would disrupt billions in community grants and financial support, leading to severe consequences, such as missed payrolls, rent payments, and widespread chaos affecting universities, nonprofits, and various communities across the country.