The White House Office of Management and Budget (OMB) has ordered a temporary pause on all federal grants and loan disbursements, as outlined in an internal memo sent Monday. This move could affect trillions of dollars in government spending and disrupt public programs benefiting millions of Americans.
The memo, issued by Acting OMB Director Matthew Vaeth, instructs federal agencies to “pause all activities related to the obligation or disbursement of all Federal financial assistance.” This includes halting the issuance of new grants. However, the pause will not impact Social Security, Medicare benefits, or any assistance provided directly to individuals.
The freeze is set to begin at 5 p.m. Tuesday and is tied to President Donald Trump’s recent executive orders, which aim to reassess federal spending in line with the administration’s priorities. The memo also notes that the pause includes funding for foreign aid, non-governmental organizations, and initiatives linked to diversity, equity, and inclusion (DEI), as well as climate programs like the Green New Deal.
The OMB has clarified that exceptions may be granted on a case-by-case basis, allowing agencies to issue new awards or take necessary actions. Agencies must also submit detailed reports on programs affected by the pause by February 10.
The announcement sparked concern among Democrats and nonprofit organizations, with many expressing alarm over the potential impacts. Diane Yentel, president of the National Council on Nonprofits, warned that the pause could severely disrupt critical services, such as research for childhood cancer cures, homeless shelters, food assistance, and domestic violence prevention.
The Association of American Universities also voiced concerns, as federal funding is essential for research and education at leading institutions across the country.
Top Democratic lawmakers, including Sen. Patty Murray and Rep. Rosa DeLauro, strongly criticized the move, calling it “breathtaking” and “unprecedented.” Senate Minority Leader Chuck Schumer added that the freeze could lead to “chaos” for universities, charities, and communities nationwide, jeopardizing crucial resources approved by Congress.
