Trump administration orders sweeping freeze of federal aid

"US Freezes Foreign Aid". The Office of Management and Budget ordered all federal agencies to temporarily suspend payments — except for Social Security and Medicare.

By Jennifer Scholtes & Nicholas Wu

January 28, 2025

One week in, the Trump administration is broadening its assault on the functions of government and shifting control of the federal purse strings further away from members of Congress.

President Donald Trump’s budget office Monday ordered a total freeze on “all federal financial assistance” that could be targeted under his previous executive orders pausing funding for a wide range of priorities — from domestic infrastructure and energy projects to diversity-related programs and foreign aid.

In a two-page memo obtained by POLITICO, the Office of Management and Budget announced all federal agencies would be forced to suspend payments — with the exception of Social Security and Medicare.

EXECUTIVE OFFICE OF THE PRESIDENT 
OFFICE OF MANAGEMENT AND BUDGET 
WASHINGTON, D.C. 20503 
THE DIRECTOR 
January 27, 2025 
M-25-13
MEMORANDUM FOR HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES 
FROM: Matthew J. Vaeth, Acting Director, Office of Management and Budget 
SUBJECT: Temporary Pause of Agency Grant, Loan, and Other Financial Assistance 
Programs 

The American people elected Donald J. Trump to be President of the United States and gave him a mandate to increase the impact of every federal taxpayer dollar. 

In Fiscal Year 2024, of the nearly $10 trillion that the Federal Government spent, more than $3 trillion was Federal financial assistance, such as grants and loans. 

Career and political appointees in the Executive Branch have a duty to align Federal spending and action with the will of the American people as 
expressed through Presidential priorities. 

Financial assistance should be dedicated to advancing Administration priorities, focusing taxpayer dollars to advance a stronger and safer America, 
eliminating the financial burden of inflation for citizens, unleashing American energy and manufacturing, ending “wokeness” and the weaponization of government, promoting efficiency in government, and Making America Healthy Again. 

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. This memorandum requires Federal agencies to identify and review all Federal financial 
assistance 1 programs and supporting activities consistent with the President’s policies and requirements.2 For example, during the initial days of his Administration, President Donald J. Trump issued a series of executive orders to protect the American people and safeguard valuable taxpayer resources, including Protecting the American People Against Invasion (Jan. 20, 2025), 
Reevaluating and Realigning United States Foreign Aid (Jan. 20, 2025), Putting America First in International Environmental Agreements (Jan. 20, 2025), Unleashing American Energy (Jan. 20, 2025), Ending Radical and Wasteful Government DEI Programs and Preferencing (Jan. 20, 
1
2 CFR 200.1 defines Federal financial assistance to mean “[a]ssistance that recipients or subrecipients receive or administer” in various forms, but this term does not include assistance provided directly to individuals. 

For the purposes of this memorandum, Federal financial assistance includes: (i) all forms of assistance listed in paragraphs (1) and (2) of the definition of this term at 2 CFR 200.1; and (ii) assistance received or administered by recipients or subrecipients of any type except for assistance received directly by individuals.

2 Nothing in this memo should be construed to impact Medicare or Social Security benefits.2025), Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government (Jan. 20, 2025), and Enforcing the Hyde Amendment (Jan. 24, 2025). 

These executive orders ensure that Federal funds are used to support hardworking American families. 

To implement these orders, each agency must complete a comprehensive analysisof all of their Federal financial assistance programs to identify programs, projects, and activities that may be implicated by any of the President’s executive orders. 

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 implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal. 

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 temporary pause will become effective on January 28, 2025, at 5:00 
PM. Even before completing their comprehensive analysis, Federal agencies must immediately identify any legally mandated actions or deadlines for assistance programs arising while the pause remains in effect. 

Federal agencies must report this information to OMB along with an 
analysis of the requirement. OMB also directs Federal agencies to pause all activities associated with open NOFOs, such as conducting merit review panels. 

No later than February 10, 2025, agencies shall submit to OMB detailed information on any programs, projects or activities subject to this pause. 

Each agency must pause: (i) issuance of new awards; (ii) disbursement of Federal funds under all open awards; and (iii) other relevant agency actions that may be implicated by the executive orders, to the extent permissible by law, until OMB has reviewed and provided guidance to your agency with respect to the information submitted. 

OMB may grant exceptions allowing Federal agencies to issue new awards or take other actions on a case-by-case basis. 

To the extent required by law, Federal agencies may continue taking certain administrative actions, such as closeout of Federal awards (2 CFR 200.344), or 
recording obligations expressly required by law. 

Additionally, agencies must, for each Federal financial assistance program: (i) assign responsibility and oversight to a senior political appointee to ensure Federal financial assistance conforms to Administration priorities; (ii) review currently pending Federal financial assistance announcements to ensure Administration priorities are addressed, and, subject to program 
statutory authority, modify unpublished Federal financial assistance announcements, withdraw any announcements already published, and, to the extent permissible by law, cancel awards already awarded that are in conflict with Administration priorities, and; (iii) ensure adequate oversight of Federal financial assistance programs and initiate investigations when warranted to 
identify underperforming recipients, and address identified issues up to and including cancellation of awards. 

“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,” according to the memo, which three people authenticated.

The new order could affect billions of dollars in grants to state and local governments while causing disruptions to programs that benefit many households.

There was also widespread confusion over how the memo would be implemented and whether it would face legal challenges.

While the memo says the funding pause does not include assistance “provided directly to individuals,” for instance, it does not clarify whether that includes money sent first to states or organizations and then provided to households.

The brief memo also does not detail all payments that will be halted.

However, it broadly orders federal agencies to “temporarily” stop sending federal financial assistance that could be affected by Trump’s executive actions.

That includes the president’s orders to freeze all funding from the Democrats’ signature climate and spending law — the Inflation Reduction Act and the bipartisan infrastructure package enacted in 2021.

It also imposes a 90-day freeze on foreign aid.

Senate Minority Leader Chuck Schumer in a statement decried the announcement as an example of “more lawlessness and chaos in America as Donald Trump’s Administration blatantly disobeys the law by holding up virtually all vital funds that support programs in every community across the country.”

The New York Democrat urged the administration to lift the freeze.

“They say this is only temporary, but no one should believe that,” he said.

“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.”

Bobby Kogan, who worked at the White House budget office during the Biden administration, called the memo a “big, broad, illegal” order that violates impoundment law, which blocks presidents from unilaterally withholding money without the consent of Congress.

“This is as bad as we feared it would be,” said Kogan, who also served as a Democratic aide to the Senate Budget Committee and is now a director at the left-leaning Center for American Progress.

The president of the National Council of Nonprofits, Diane Yentel, said in a statement that the order “could decimate thousands of organizations and leave neighbors without the services they need.”

The funding pause, first reported by journalist Marisa Kabas, is scheduled to start at 5 p.m. Tuesday, a day after the memo was sent to agencies.

Carmen Paun and Adam Cancryn contributed to this report.

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