The White House is taking drastic measures to control trillions of federal dollars by ordering a freeze on all federal grants and loans so President Donald Trump's administration can review government spending.
The temporary pause is slated to go into effect Tuesday at 5 p.m. ET and blocks the disbursement of nearly all federal funding. The order also directs all federal agencies to submit detailed reports on "any programs, projects or activities subject to this pause" by no later than Feb. 10, 2025.
"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," Office of Management and Budget Acting Director Matthew Vaeth said in a memo. "This memorandum requires Federal agencies to identify and review all Federal financial assistance programs and supporting activities consistent with the President’s policies and requirements."
The order will impact a huge swath of federal funds already allocated for things like the Inflation Reduction Act and Bipartisan Infrastructure Bill projects, as well as foreign aid commitments and funding for some non-profit organizations and services.
Social Security and Medicare payments are not slated to be impacted. Funding for those initiatives will continue uninterrupted.
Nonetheless, reaction from Democrats on Capitol Hill has been swift and angry. Senate Minority Leader Chuck Schumer said the order simply expands the "lawlessness and chaos" of the Trump administration.
"Donald Trump's Administration blatantly disobeys the law by holding up virtually all vital funds that support programs in every community across the country," Schumer said in a statement. "If this continues, the American people will pay an awful price."
"It will mean missed payrolls and rent payments and everything in between: chaos for everything from universities to non-profit charities, state disaster assistance, local law enforcement, aid to the elderly, and food for those in need," Schumer added.
However, according to a senior administration official, the federal funding freeze does not apply across-the-board and will not impact individual payments or assistance.
The official also said the pause isn't permanent and is intended to give federal agencies time to ensure their grants, loans and programs comply with Trump administration policies and goals. Agencies may also reportedly seek exemptions on a case-by-case basis.
