White House Pauses All Federal Grants, Sparking Confusion

January 28, 2025

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by Jeff Stein, Jacob Bogage and Emily Davies (Washington Post) Trillions of dollars could be on hold, according to an Office of Management and Budget memo. -- 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, 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 feared disruption highlighted the extent of the new Trump administration’s determination to target long-standing functions of the federal government.

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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 agencies are also required to submit detailed lists of projects suspended under the new order by Feb. 10. Federal agencies must assign “responsibility and oversight” to tracking the federal spending to a senior political appointee, not a career official, the memo states.

“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,” said Brian Riedl, a senior fellow at the Manhattan Institute, a center-right think tank.

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“They say this is only temporary, but no one should believe that,” Senate Minority Leader Charles E. Schumer (D-New York) said in a statement. “Donald Trump must direct his Administration to reverse course immediately and the taxpayers’ money should be distributed to the people. Congress approved these investments and they are not optional; they are the law.”

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.

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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.”

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.

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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 ... click here. READ MORE

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Excerpt from Washington Post: A federal judge on Tuesday temporarily blocked President Donald Trump from imposing a sweeping pause on trillions of dollars in federal spending, capping a frenetic day of disruption to government programs that fund schools, provide housing and ensure low-income Americans have access to healthcare.

The order prevented the new restrictions from taking effect until at least Feb. 3, buying time for a coalition of public-health advocates, nonprofits and businesses — represented by the left-leaning group Democracy Forward — to proceed with a case that may test Trump’s claims of expansive power over the nation’s fiscal trajectory.

The decision arrived amid a wave of chaos and confusion in Washington, where few appeared to understand the scope and intention of a White House memo that had directed agencies to “temporarily pause” the disbursement of key federal funds. Even before it could officially take effect at 5 p.m., thousands of government services — many dedicated primarily to Americans’ health, safety and well-being — appeared to be at risk of interruption or shutdown, at least temporarily.

For hours, states reported issues accessing funds under Medicaid, even though the White House later said it wasn’t supposed to be affected by the spending halt. Preschool centers struggled to obtain reimbursements from the federal program known as Head Start, putting some child-care services at financial risk.

A web portal that housing providers use to draw down money for government voucher and rental assistance funds stopped working Tuesday, though the cause was not immediately clear. And federal health and education officials similarly said they had to halt work in response to the mixed messages from the White House. That stalled money for some after-school programs, charter schools and the Special Olympics, a spokesperson for the Education Department confirmed.

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In seeking to institute a freeze, the White House illustrated in the starkest terms to date that Trump would be willing to push the limits of the president’s purview over the budget. The U.S. Constitution affords the power of the purse to Congress, but Trump has signaled he could circumvent lawmakers anyway, potentially terminating entire categories of spending that he opposes.

Under a 1974 budget law, the White House can temporarily delay federal funds only if certain procedures are met and conditions followed — not simply because the White House disapproves of its purpose, according to David Super, an administrative law professor at Georgetown Law School.

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But Trump and his incoming budget chief, Russell Vought, have indicated they believe that law is unconstitutional. Instead, they have publicly embraced a controversial power, known as impoundment, that could allow them to reduce or eliminate spending regardless of the amounts enacted by Congress. READ MORE

Excerpt from Washington Post: More chaos ensued when some states discovered they were unable to access federal dollars for some programs, such as Medicaid, that the White House said were not intended to be impacted by the freeze.

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Some answers about what could be frozen have emerged: For example, student loan disbursements will not be impacted by the freeze, an Education Department spokeswoman said Tuesday.

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The Post is tracking which federal funds and programs are subject to the hold — should it be reinstated — which funds will not be affected and which buckets of money appear to be in limbo. We will update this list as we know more.

Subject to freeze.

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Research grants. Some National Institutes of Health grants for research projects that are already underway are subject to the Trump administration’s pause, according to an NIH employee who spoke on the condition of anonymity because they were not authorized to discuss the issue publicly.
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NIH is the largest public funder of biomedical research in the world. The funding pause would affect researchers at universities, medical schools and other research institutes outside of the NIH who have received funds.
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Funding for electric vehicles. Payments for the National Electric Vehicle Infrastructure Program will be paused, according to a message sent out by the Federal Highway Administration that was obtained by The Post.
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Discretionary grants at the Education Department.
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Some grants for clean energy. In a Day 1 executive order on “unleashing American energy,” Trump directed federal agencies to “immediately pause the disbursement of funds” under the Inflation Reduction Act of 2022 and the bipartisan infrastructure law of 2021. The two laws authorized grants for states and nonprofit groups to install rooftop solar panels, electric vehicle charging stations and other green technologies. The budget office has confirmed that the funding freeze applies to grants targeted by this executive order.
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Not frozen

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Money for small businesses and farmers. The budget office document published Tuesday said these programs would not be frozen. READ MORE

Excerpt from Politico's E&E News: The OMB memo marks the most significant step taken yet by the Trump administration to move toward impoundment, a maneuver to restrict funds appropriated by Congress. The directives do not explicitly claim impoundment authority as the basis for the pauses, and the White House said Tuesday that it believes its actions are “within the confines of the law.”

Both Trump and Russell Vought, his pick to lead OMB, have said they want to consider such action to claw back funding for clean energy and climate programs, among other programs.

Vought said during his confirmation hearing last week that the Trump administration would be implementing a legal “review” to test the limits of the Impoundment Control Act of 1974, a law that generally bars the president from withholding congressionally approved spending.

And the memo follows a string of executive orders last week mandating that agencies halt funding already approved by Congress as part of former President Joe Biden’s climate and infrastructure laws.

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But for the most part, Republican leaders Tuesday denied that the move had anything to do with impoundment and urged patience as the ramifications of the sweeping funding freeze began to come into focus.

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On Tuesday, 22 Democrats voted “no” on confirming Transportation Secretary nominee Sean Duffy after previously voting unanimously with Republicans to fast-track the vote. Several said they changed their vote because they did not want to support a nominee who would back Trump’s efforts.

Trump’s picks to lead EPA and the departments of Energy and the Interior — Lee Zeldin, Chris Wright and Doug Burgum, respectively — are due to have their Senate confirmation votes in the coming days.

Indeed, a number of lawmakers expressed concern Tuesday about energy and environment programs that could suffer because of OMB’s actions. Democrats mentioned disaster assistance, grants to help low-income people pay their energy bills, loans and grants for clean energy projects, and federal funds for infrastructure and resilience projects as funding buckets that are now at risk.

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North Dakota Republican Sen. Kevin Cramer, who is close with Trump, described the pause as “a pretty major test of separation of powers,” as well as a “test of [Trump’s] power.” READ MORE