The White House has issued a memo temporarily suspending federal grants, loans, and other financial assistance programs pending an assessment of the funding. The memo was sent by the Office of Management and Budget (OMB) and was initially reported to be a funding freeze on federal financial assistance across the board. However, a White House official clarified that the pause is limited to programs, projects, and activities that may be impacted by President Donald Trump’s executive orders, such as those related to diversity, equity, and inclusion, the Green New Deal, and funding nongovernmental organizations that the White House believes undermine national interest.
The memo exempts programs that provide direct benefits to Americans, including Social Security, Medicare, and the Supplemental Nutrition Assistance Program (SNAP). The official stated that the pause is necessary to ensure that taxpayer money is spent in accordance with the law and the President’s policies, and to prevent the funds from being used in ways that are not in line with the administration’s priorities.
The memo also includes a “safety valve” that allows agencies to review spending in conformity with applicable laws, and includes a provision that the pause will be lifted if an agency determines that a program is not in conflict with the President’s priorities.
The memo has been met with opposition from Senate Minority Leader Charles Schumer, who called the pause “chaotic” and said it could result in missed payrolls, rent payments, and other devastating effects on programs that benefit millions of Americans. However, the White House official disputed this, stating that the pause is not meant to be a permanent stop of funding and that agencies can seek exemptions on a case-by-case basis if necessary.