The Trump administration late Monday directed federal agencies to pause the disbursement of loans and grants while the government conducts a review to ensure spending aligns with President Trump’s agenda.
A memo issued by acting director of the Office of Management and Budget (OMB) Matthew Vaeth directs federal agencies to temporarily pause “all activities related to obligation or disbursement of all Federal financial assistance.”
“This temporary pause will provide the Administration time to review agency programs and determine the best uses of the funding for those programs consistent with the law and the President’s priorities,” the memo states.
The memo indicates that Social Security or Medicare benefits should not be impacted, nor should assistance that is provided directly to individuals.
The pause goes into effect at 5 p.m. on Tuesday, according to the memo, which was reviewed by The Hill. OMB may grant exceptions for certain awards on a case-by-case basis, the memo states.
Federal agencies are instructed to conduct a review to determine whether federal loan and grant programs are impacted by Trump’s wave of executive orders during his first week in office. Those orders were related to border security, the federal workforce, ending the “weaponization” of government, the military and other aspects of government.
The White House did not respond to a request for comment on the memo.
Senate Minority Leader Chuck Schumer (D-N.Y.) lambasted the move in a statement late Monday, saying the pause on federal disbursements “blatantly disobeys the law” and expressing skepticism that it is just a temporary hold.
“Congress approved these investments and they are not optional; they are the law. These grants help people in red states and blue states, support families, help parents raise kids, and lead to stronger communities,” Schumer said.
“Donald Trump’s Administration is jeopardizing billions upon billions of community grants and financial support that help millions of people across the country,” he added. “It will mean missed payrolls and rent payments and everything in between: chaos for everything from universities to non-profit charities.”
Trump and his nominee to lead OMB, Russ Vought, have signaled they may seek to expand presidential authority over the agency. Trump has also talked about challenging the Impoundment Control Act by using presidential authority to hold back certain funding appropriated by Congress.
