The Trump administration paused federal grants, loans, and other financial assistance in a late-night move – that could have big impacts for everyday Americans.
The Office of Management and Budget distributed a memo Monday ordering federal agencies to pause any federal financial assistance to allow President Donald Trump and his administration to review whether that aid is consistent with his policies.
The scope of the order is not immediately clear. Outside of a few honorable mentions — “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology and the Green New Deal” — the memo did not spell out which programs would be impacted.
The order does, however, explicitly exclude Medicaid and Social Security benefits from being affected. Experts warned that a wide range of activities, including nonprofits, food assistance, student loans and scientific research, could be impacted by this order. Specifically, the Pell Grant program, Supplemental Nutrition Assistance Program (SNAP), and Women, Infants, and Children (WIC) program could be frozen.
Each federal agency is required to conduct a “comprehensive analysis” of each of its financial assistance programs to determine whether they are implicated by the president’s flurry of executive orders, states the memo from Matthew Vaeth, acting director of OMB.
Senate leader Chuck Schumer warned that this order “blatantly disobeys the law.”
“Congress approved these investments and they are not optional, they are the law,” the New York Democrat said in a statement posted to X.
This order will lead to “missed payrolls and rent payments and everything in between: chaos for everything from universities to non-profit charities, state disaster assistance, local law enforcement, aid to the elderly, and food for those in need,” he continued.
On Monday, the top Democrats of the Congressional Appropriations Committees, Rep. Rosa DeLauro and Sen. Patty Murray, wrote to Vaeth with “extreme alarm about the Administration’s efforts to undermine Congress’s power of the purse, threaten our national security, and deny resources for states, localities, American families, and businesses.”
They called the extent of the order “breathtaking, unprecedented, and will have devastating consequences across the country.”
The Democrats added: “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.”
Diane Yentel, President and CEO of the National Council of Nonprofits, also braced for the impacts of the sweeping order.
“This order is a potential 5-alarm fire for nonprofits and the people and communities they serve. From pausing research on cures for childhood cancer to closing homeless shelters, halting food assistance, reducing safety from domestic violence, and shutting down suicide hotlines, the impact of even a short pause in funding could be devastating and cost lives,” Yentel said in a post on X. “This order could decimate thousands of organizations and leave neighbors without the services they need.”
The agencies must submit the information on such programs by February 10, according to the memo.
“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,” said the memo.
“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,” he continued.