he White House budget office is ordering a pause to all grants and loans disbursed by the federal government, according to an internal memo sent to agencies Monday, creating significant confusion across Washington.
In a two-page document, Matthew J. Vaeth, the acting director of the White House Office of Management and Budget, instructs federal agencies to “temporarily pause all activities related to obligations or disbursement of all Federal financial assistance.” The memo, a copy of which was obtained by The Washington Post, also calls for each agency to perform a “comprehensive analysis” to ensure its grant and loan programs are consistent with President Donald Trump’s executive orders, which aimed to ban federal diversity, equity and inclusion initiatives, and limit clean energy spending, among other measures.
The memo, which goes into effect Tuesday, states its orders should not be “construed” to affect Social Security or Medicare recipients, and also says the federal financial assistance put on hold “does not include assistance provided directly to individuals.”
But the document says programs affected are “including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”
Even before taking effect, the broad directive from the White House sent shock waves through Washington and across the country, as organizations dependent on the federal government struggled to understand its impact.
Trump and his aides have long vowed to halt spending on some programs reviled by the right, such as DEI and foreign aid, but the order appears to go far beyond those priorities to affect programs that serve tens of millions of Americans.
Experts said the memo as written was poised to bring a rapid halt to scores of federal functions, from assistance to homeless shelters to financial aid for college students. Health grants distributed by the Centers for Disease Control and Prevention, and state aid for disaster reconstruction, might face delays. Developers expecting federal grants to expand the nation’s energy supply could be disrupted. Questions quickly emerged about whether Medicaid, the health insurance program used by more than 70 million Americans, would see a pause in payments, which are distributed from the federal government to the states….
The order’s legality may be contested, but the president is generally allowed under the law to defer spending for a period of time if certain conditions are met, according to budget experts. To comply, though, Trump must make clear which budget accounts are frozen, and the budget office’s order may not have given sufficient grounds under the law to pause the funding. Pausing it over policy disagreements is not legal, said Bobby Kogan, a federal budget expert at the left-leaning Center for American Progress and a former Biden administration official.