White House pauses all federal grants, sparking confusion
Trillions of dollars could be on hold, according to an Office of Management and Budget memo.
Updated
January 27, 2025 at 9:24 p.m. EST17 minutes ago
By Jeff Stein, Jacob Bogage and Emily Davies
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.
Temporary Pause to Review Agency Financial Assistance Programs
January 27, 2025
M-25-13
MEMORANDUM FOR HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES
FROM: Matthew J. Vaeth, Acting Director, Office of Management and Budget
SUBJECT: Temporary Pause of Agency Grant, Loan, and Other Financial Assistance
Programs
The American people elected Donald J. Trump to be President of the United States and
gave him a mandate to increase the impact of every federal taxpayer dollar. In Fiscal Year 2024,
of the nearly $10 trillion that the Federal Government spent, more than $3 trillion was Federal
financial assistance, such as grants and loans. Career and political appointees in the Executive
Branch have a duty to align Federal spending and action with the will of the American people as
expressed through Presidential priorities. 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. 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.
This memorandum requires Federal agencies to identify and review all Federal financial
assistance
1 programs and supporting activities consistent with the President’s policies and
requirements.
2 For example, during the initial days of his Administration, President Donald J.
Trump issued a series of executive orders to protect the American people and safeguard valuable
taxpayer resources, including 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,
1 2 CFR 200.1 defines Federal financial assistance to mean “[a]ssistance that recipients or subrecipients receive or administer” in various forms, but this term does not include assistance provided directly to individuals.
For the purposes of this memorandum, Federal financial assistance includes: (i) all forms of assistance listed in paragraphs
(1) and (2) of the definition of this term at 2 CFR 200.1; and (ii) assistance received or administered by recipients or subrecipients of any type except for assistance received directly by individuals.
2 Nothing in this memo should be construed to impact Medicare or Social Security benefits.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).
These executive orders ensure that Federal funds are used to support hardworking American
families.
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
may be 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.
This temporary pause will provide the Administration time to review agency programs
and determine the best uses of the funding for those programs consistent with the law and the
President’s priorities. The temporary pause will become effective on January 28, 2025, at 5:00
PM. Even before completing their comprehensive analysis, Federal agencies must immediately
identify any legally mandated actions or deadlines for assistance programs arising while the
pause remains in effect. Federal agencies must report this information to OMB along with an
analysis of the requirement. OMB also directs Federal agencies to pause all activities associated
with open NOFOs, such as conducting merit review panels.
No later than February 10, 2025, agencies shall submit to OMB detailed information on
any programs, projects or activities subject to this pause. Each agency must pause: (i) issuance of
new awards; (ii) disbursement of Federal funds under all open awards; and (iii) other relevant
agency actions that may be implicated by the executive orders, to the extent permissible by law,
until OMB has reviewed and provided guidance to your agency with respect to the information
submitted.
OMB may grant exceptions allowing Federal agencies to issue new awards or take other
actions on a case-by-case basis. To the extent required by law, Federal agencies may continue
taking certain administrative actions, such as closeout of Federal awards (2 CFR 200.344), or
recording obligations expressly required by law.
Additionally, agencies must, for each Federal financial assistance program: (i) assign
responsibility and oversight to a
senior political appointee to ensure Federal financial assistance conforms to Administration priorities; (ii) review currently pending Federal financial assistance announcements to ensure Administration priorities are addressed, and, subject to program statutory authority, modify unpublished Federal financial assistance announcements, withdraw
any announcements already published, and, to the extent permissible by law, cancel awards
already awarded that are in conflict with Administration priorities, and; (iii) ensure adequate
oversight of Federal financial assistance programs and initiate investigations when warranted to
identify underperforming recipients, and address identified issues up to and including
cancellation of awards.
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