Trump to pause all federal grants and loans, memo reveals

January 28, 2025 journo

The White House is pausing federal grants and loans as President Donald Trump’s administration begins an across-the-board ideological review of its spending.

A circulated memo has temporarily paused grant, loan and other financial assistance programs at the Office of Management and Budget (OMB).

The memo referenced the executive orders that the president has signed since taking office, including those seeking to dismantle programs related to diversity, equity and inclusion (DEI).

“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 impacted by the executive orders,” Matthew J. Vaeth, the acting director of the Office of Management and Budget, wrote in the memo.

“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,” Mr Vaeth added.

According to the memo, the suspension begins on January 28 at 5pm EST (January 29, 8am AEST).

The memo has prompted criticism from congressional Democrats, who have responded to reports of the memo by sending a letter demanding the OMB reverse its decision.

“The scope of what you are ordering is breathtaking, unprecedented, and will have devastating consequences across the country,” Democratic Senator Patty Murray and Democratic Representative Rosa DeLauro wrote.

“We write today to urge you in the strongest possible terms to uphold the law and the Constitution and ensure all federal resources are delivered in accordance with the law.”

close up of woman with short black hair and a died blue fringe — Democratic Representative Rosa DeLauro has criticised the memo in a written response. (Reuters: Sarah Silbiger)

Federal agencies have until February 10 to submit detailed information on any programs, projects or activities subject to the pause, the memo states.

The suspension will provide the administration with time to review agency programs and determine the best uses of funding for those programs consistent with the law and President Trump’s priorities, it added.

Also the memo states agencies must identify legally mandated actions or deadlines for assistance programs before completing the analysis.

Medicare and Social Security benefits will be unaffected, according to the memo.

Mr Vaeth directed federal agencies to halt all activities associated with open notices of funding opportunities.

“This memorandum requires federal agencies to identify and review all federal financial assistance programs and supporting activities consistent with the president’s policies and requirement,” he wrote.

Reuters/AP