President Trump has ordered the suspension of all federal grants, loans, and other financial programs pending a thorough agency review. The decision was announced in a two-page memo from the Office of Management and Budget titled “Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs.” According to the memo, it affects at least $3 trillion in federal outlays.
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The freeze refers to several Trump executive orders as the authority — Protecting the American People Against Invasion (Jan. 20, 2025),
Reevaluating and Realigning United States Foreign Aid (Jan. 20, 2025), Putting America First in International Environmental Agreements (Jan. 20, 2025), Unleashing American Energy (Jan. 20, 2025), Ending Radical and Wasteful Government DEI Programs and Preferencing (Jan. 20, 2025), Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the
Federal Government (Jan. 20, 2025), and Enforcing the Hyde Amendment (Jan. 24, 2025). It immediately ends funding for Green New Deal, NGO support (see JD Vance Suggests Mammon, Not God, May Explain the Stance of US Catholic Bishops on the Migrant Invasion), diversity, and foreign aid programs.
To implement these orders, each agency must complete a comprehensive analysis of all of their Federal financial assistance programs to identify programs, projects, and activities that maybe implicated by any of the President’s executive orders. In the interim, to the extent permissible under applicable law, Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.
The memo does not affect Medicare, Medicaid, Social Security, student loans and grants, or social safety net payments to individuals, though some leftist politicians will undoubtedly make that claim.
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Panties are definitely wadded among those who live by suckling the federal teat.
Donald Kettl, professor emeritus and former dean of the University of Maryland School of Public Policy, said the language in the memo is confusing, making its specific effects unclear. There will be widespread panic, Kettl said, as state and local governments as well as the people most reliant on federal-funded grants scramble to figure out if and when their cash flow will stop.
“In two pages, we’ve got what amounts to 60 years of tradition and policies that are thrown up in the air,” said Kettl, who has consulted for multiple government agencies. “For those suffering most, the uncertainty will be immense.”
The 90-day hold is well within the letter of the Impoundment Control Act and is sure to inconvenience some grantees. What it does is prevent the federal government from directly funding activities, like abortion and alien smuggling, that are against the stated policy of the administration.
