The 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 states its orders should not be “construed” to impact 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.”
The order may impact at least tens of billions of dollars in payments, said Brian Riedl, a senior fellow at the Manhattan Institute, a center-right think tank.
The memo also states that of the $10 trillion “that the Federal Government spent [in fiscal year 2024, which ended Sept. 30, 2024], more than $3 trillion was Federal financial assistance, such as grants and loans.” It was not immediately clear where those figures came from; the nonpartisan Congressional Budget Office
says the government spent $6.7 trillion in fiscal 2024.
A person familiar with the order, speaking on the condition of anonymity to describe confidential decisions, confirmed the accuracy of the document and said it applied to all grants. The memo goes into effect Tuesday. The agencies are also required to submit detailed lists of projects suspended under the new order by Feb. 10.
“The funding delays are going to prove very difficult for grantees under the impression the money is coming, and have rent and salary payments dependent upon it,” Riedl said. “It seems like a very big deal.”
The memo was
reported earlier Monday by journalist Marisa Kabas.
Federal grants support a broad range of recipients and causes. They go to universities for education and research programs, and to nonprofits for health care and studies, among thousands of other purposes.
Several congressional Democratic aides, speaking on the condition of anonymity to describe private conversations, said they were bewildered by the memo and trying to understand its implications for the federal government.
The order’s legality may be contested, but the president is generally allowed under the law to defer spending for a period of time, according to budget experts.
G. William Hoagland, senior vice president at the Bipartisan Policy Center, said the administration should be legally able to pause the money temporarily but would need to submit a formal request to Congress to do so beyond a set window.
Still, Hoagland and other budget experts have expressed concern about Trump’s promises to wrest spending control away from Congress. Hoagland said he fears the deferral could be a precursor to a broader assertion of executive spending power.
“I worry this is an effort to hold back on not implementing the law of the land as it relates to the budget process,” Hoagland said. “And in terms of the impact, it could be huge.”
The Trump administration has also acted rapidly to freeze most
public communications by federal health agencies, as well as
temporarily pausing foreign aid.
Read the full memo below. If you can’t see it, click
here.
