By Reeturaj - Jan 30, 2025
The Trump administration has temporarily halted federal grants and loans as instructed in a leaked government memo verified by CBS News. This decision is facing criticism from Democrats for potentially disrupting essential programs, leading to questions about presidential power and the legality of the move. The memo establishes a deadline for agencies to pause financial assistance programs and report back by February 10. This suspension follows a recent pause in U.S. foreign aid, impacting various aid programs except for emergency food support and military funding for certain countries.
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The Trump administration has paused federal grants and loans, according to a leaked government memo verified by CBS News. The memo, signed by acting Office of Management and Budget (OMB) chief Matthew Vaeth, instructs government agencies to temporarily halt their financial assistance programs to review spending that may be affected by the various orders signed by Trump. This pause impacts financial assistance for foreign aid, non-governmental organizations, and other programs.
The decision has faced criticism from Democrats, who warn of "devastating consequences" for programs that people depend on. Diane Yentel of the National Council of Nonprofits stated that the order could disrupt cancer research, food assistance, and suicide hotlines. Additionally, the pause raises questions about the extent of presidential power, as the funding was allocated by Congress. It is expected to encounter legal challenges, with Democrats arguing that the president does not have the authority to unilaterally halt federal spending.
The memo establishes a deadline of 5:00 PM EST (10:00 PM GMT) for agencies to stop issuing new awards and disbursing funds under existing awards. Agencies are also required to report which programs have been paused by February 10. The White House has not yet issued an official comment on the leaked document, but Democrats in Washington, D.C., quickly expressed their concern. The top Democratic appropriators in Congress sent a letter to the White House, urging them to uphold the law and the Constitution, ensuring that all federal resources are allocated in accordance with the law.
This suspension of federal grants and loans comes just days after the U.S. ceased nearly all foreign aid. This decision follows Trump’s executive order for a 90-day pause in foreign development assistance, pending a review of efficiencies and consistency with his foreign policy. The U.S. is the world’s largest international aid donor, having spent $68 billion in 2023. The State Department's notice appears to affect everything from development assistance to military aid, with exceptions only for emergency food aid and military funding for Israel and Egypt.
