Donald Trump's Shocking Move: Total Freeze on Federal Grants and Loans Leaves Millions in Limbo
Unprecedented Actions by Trump Administration Halt Financial Lifelines; What’s Next for American Citizens?
In an astonishing turn of events that has sent shockwaves through the United States, President Donald Trump has ordered an immediate and sweeping freeze on all federal grants and loans, effective immediately.
This decision, outlined in a memo by Matthew Vaeth, the acting director of the…
In a two-page memo, the Office of Management and Budget ordered all federal agencies to temporarily suspend payments.
Jennifer Scholtes at Politico:
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 on Monday ordered a total freeze on “all federal financial assistance” that could be targeted under his previous executive orders that 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 temporarily suspend payments, while making clear that Social Security and Medicare would not be affected.
“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 also creating disruptions to programs that benefit U.S. households. But in the immediate aftermath there was also widespread confusion over how the memo would be implemented and whether it may 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 all federal financial assistance that could be affected by Trump’s executive actions.
That includes the president’s orders to freeze all funding from Democrats’ signature climate and spending law called the Inflation Reduction Act and the bipartisan infrastructure package enacted in 2021, along with a 90-day freeze of all 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 OMB under Tyrant 47’s misadministration puts out a “temporary” freeze to most federal aid and grants, including food assistance, Medicaid, farm aid, Head Start, and rent assistance. Social Security and Medicare are exempted.
This is dangerous and dictatorial, and must be resisted.
See Also:
HuffPost: Donald Trump Orders Freeze On All Federal Grants And Loans In Huge Power Grab
The Hill: Trump administration directs widespread pause of federal loans and grants
Reuters: White House pauses federal grant, loan, and other assistance programs
NOTUS: Trump Administration Orders Sudden Freeze on Federal Aid
A new memo issued by the Trump administration directing the federal government to temporarily cease disbursing billions of dollars in funds appears to draw on arguments made by Russ Vought, the president’s selectee to run the Office of Management and Budget.
Vought was a primary architect of Project 2025, a sprawling effort organized by The Heritage Foundation to provide policy and staffing recommendations for President Donald Trump’s second term. In addition to that role, Vought is also the founder of the Center for Renewing America, a MAGA-aligned think tank that has spent over a year arguing that the president can unilaterally refuse to spend funds allocated by Congress, an authority known as the impoundment power that was severely curtailed by Congress in 1974.
The new Trump administration memo was issued by Matthew Vaeth, acting director of OMB pending Vought’s confirmation vote. The document calls for federal agencies to “temporarily pause all activities related to obligation or disbursement of all Federal financial assistance.”
“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,” the memo states.
Although the two-page memo doesn’t use the term impoundment, law professor Steve Vladeck argued that the Trump administration is claiming “the unilateral power to at least temporarily ‘impound’ tens of billions of dollars of appropriated funds—in direct conflict with Congress’s constitutional power of the purse, and in even more flagrant violation of the Impoundment Control Act of 1974.” The existence of the document was first reported by journalist Marisa Kabas and later confirmed by The Washington Post and The New York Times. (OMB issued a follow-up memo claiming the freeze does “not apply across-the-board” and withheld funds are “not an impoundment under the Impoundment Control Act.”)
The direct effects of the memo are unknown given its scope and vagueness, but they could be detrimental even if the pause is short-lived.
“Experts said the memo as written was poised to bring a rapid halt to scores of federal functions, from assistance to homeless shelters to financial aid for college students,” the Post reported. “Health grants distributed by the Centers for Disease Control and Prevention, and state aid for disaster reconstruction, might face delays.”
The memo appears to exempt Social Security and Medicare recipients, and it says the halt “does not include assistance provided directly to individuals.” It isn’t clear whether Medicaid recipients will be affected, although some early reports indicated that payments had been disrupted.
Project 2025 architect Russ Vought had his handprints all over the federal funding freeze.
See Also:
HuffPost: The 50-Year-Old Law Trump Is Challenging To Create Chaos
The Guardian: Trump move to pause federal loans and grants rooted in Project 2025
Ahmed Baba: Trump’s Funding Freeze Power Grab Causes Chaos And Legal Firestorm
Lawmakers and state officials say portals inaccessible for one of largest health insurance programs in US
Jessica Glenza at The Guardian:
Medicaid payment portals are down following the Trump administration’s decision to freeze trillions of dollars in federal funding, an effort by the new president to root out “wokeness” in the federal government, multiple sources have reported.
A health insurance program for low-income individuals, Medicaid is run jointly by the states and the federal government. With the Children’s Health Insurance Program (Chip), Medicaid insures more than one in five Americans, or about 79 million people, nearly half of whom are children. Medicaid also pays for roughly two in every five births in the US.
“My staff has confirmed reports that Medicaid portals are down in all 50 states following last night’s federal funding freeze,” Ron Wyden, a US Democratic senator from Oregon, said in a now-viral social media post Tuesday.
“This is a blatant attempt to rip away health care from millions of Americans overnight and will get people killed.”
Later on Tuesday, Karoline Leavitt, the White House press secretary, said on social media that the administration was “aware of the Medicaid website portal outage” and that the portal was expected to “be back online shortly”. Leavitt said payments to providers continue to be made, but did not provide a reason for the outage.
A separate memo released by the office of management and budget (OMB) on Tuesday sought to clarify that Medicaid and other direct assistance programs, such as food assistance (known as Snap, colloquially “food stamps”), were exempted. The latest memo came after chaos had already ensued and as state Medicaid directors continued struggled to access payment portals, STAT reported.
The upheaval ensued after Matthew Vaeth, Trump’s acting head of the office of management and budget (OMB), instructed all federal agencies to “temporarily pause all activities related to obligations or disbursement of all federal financial assistance” on Monday. The memo explicitly exempts Medicare and social security, federal programs that provide health insurance and retirement benefits for seniors.
Medicaid payment portals were down across the nation due to Trump’s grotesquely unconstitutional federal funding freeze order.
See Also:
NewsNation: Medicaid portals down in all 50 states: US senator Wyden
Administrative stay pauses the government’s action, which would upend nearly every corner of US society, till Monday
Oliver Milman and Anna Betts at The Guardian:
A federal judge has temporarily blocked a Trump administration freeze of all grants and loans disbursed by the federal government, a decision that upended programs relied upon by millions of Americans.
US district judge Loren AliKhan ordered an administrative stay on the funding pause on Tuesday afternoon, moments before it was set to take effect. The stay, issued in response to a lawsuit brought by a group of non-profits and small businesses, pauses the administration’s action until Monday.
In a two-page internal memo on Monday, Matthew Vaeth, Trump’s acting head of the office of management and budget (OMB), instructed all federal agencies to “temporarily pause all activities related to obligations or disbursement of all federal financial assistance”.
Vaeth said that the pause did not include social security or Medicare , and that the assistance put on hold “does not include assistance provided directly to individuals”.
If allowed to take effect, the order could have far-reaching consequences that touch nearly every corner of American society, including universities, the non-profit sector, cancer research, food assistance, suicide hotlines, hospitals, community health centers, non-profits that help disabled veterans and many more.
Democratic attorneys general said on Tuesday they also planned to sue to prevent the memo from taking effect. Letitia James, the New York attorney general, said her office would take “imminent legal action against this administration’s unconstitutional pause on federal funding. We won’t sit idly by while this administration harms our families.”
The administrative stay came in response to a lawsuit filed by four groups representing non-profits, public health professionals and small businesses in which they said the directive was illegal and would have a “devastating impact on hundreds of thousands of grant recipients who depend on the inflow of grant money”. The groups said the directive would disrupt education, healthcare, housing and disaster relief and would devastate “hundreds of thousands of grant recipients who depend on the inflow of grant money”.
At a news conference on Tuesday morning, Chuck Schumer, the Democratic Senate leader from New York, described the order as “a dagger at the heart of the average American families, in red states and blue states, in cities and suburbs and rural areas”.
Joined at the news conference by the Democratic senators Amy Klobuchar, Patty Murray, Jeff Merkley and Andy Kim, Schumer noted that among the programs potentially affected was Meals on Wheels, which provides hot meals to at-risk seniors and is partly funded by the federal government.
The proposed halt in spending comes days after the US also immediately cut off all foreign aid, and was designed to ensure that financial assistance is in line with Trump’s policies, Vaeth wrote.
[...]
Karoline Leavitt, Trump’s press secretary, said that the White House was aware of the “website portal outage” and that they had confirmed that no payments had been affected and that payments “are still being processed and sent”.
“We expect the portal will be back online shortly,” she added.
In a press conference on Tuesday, Leavitt pushed back against suggestions the memo caused chaos and uncertainty and said it would not affect direct assistance to individuals, including social security, Medicare, welfare and food stamps. She did not clarify, however, whether aid that goes through organizations to individuals, like Meals on Wheels, would be affected.
“[The] only uncertainty in this room is amongst the media,” said Leavitt, blaming the press for anxieties spurred by the measure.
In a dose of good news, just before the disastrous freeze would have taken effect at 5PM ET/4PM CT yesterday, Judge Loren AliKhan put a temporary halt to Tyrant 47’s egregiously dictatorial order to freeze all federal grants and loans.
On Monday, the Trump administration issued an extraordinary memo ordering federal agencies to indefinitely freeze the "disbursement of all F
Judd Legum and Rebecca Crosby at Judd Legum at Popular Information:
On Monday, the Trump administration issued an extraordinary memo ordering federal agencies to indefinitely freeze the "disbursement of all Federal financial assistance." The freeze was scheduled to take effect at 5 PM on Tuesday, according to the memo, authored by the acting director of the Office of Management and Budget, Matthew J. Vaeth.
Each agency has until February 10 to provide detailed information about every grant, loan, or financial assistance program covered by the memo. Even after submitting this information, the freeze continues "until OMB has reviewed and provided guidance to your agency with respect to the information submitted." Essentially, agencies are prohibited from spending money on Congressionally authorized financial assistance programs until the Trump administration reviews and approves each program. (Financial assistance provided directly to individuals, such as Social Security and Medicare, are excluded from the new directive.)
The stated purpose of the freeze is to prevent the "use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies," which the memo describes as "a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve." The memo suggests that federal agencies are prohibited from spending money for these purposes because of a series of executive orders, such as Ending Radical and Wasteful Government DEI Programs and Preferencing, issued by President Donald Trump in the first days of his presidency.
The first issue with the memo is that the articulated policy is hopelessly vague. The Green New Deal is a set of policies that were proposed but never enacted into law. Marxism is a political philosophy, not a category of financial assistance programs administered by the federal government. There is no explanation of how an agency could determine which programs include these supposedly prohibited concepts.
The second issue is the process described by the memo is illegal. Once Congress passes a law that includes a financial assistance program and the president signs the law, the executive branch must execute the law. There is no exception to this rule for programs that allegedly support Marxism, transgenderism, or the Green New Deal. If Trump opposes any financial assistance program that Congress has previously funded, the legal course of action is to convince Congress to rescind the funding.
The Impoundment Control Act of 1974 provides the only legal mechanism for an administration to temporarily withhold funding for a program. Under the law, Trump could delay funding a program for up to 45 days if he first sends a message to Congress explaining why he believes funding should be rescinded. But if Congress does not pass legislation rescinding the funds within 45 days, the administration must disperse the funds. Trump has not sent any such message to Congress. As a result, the freeze of funds is illegal.
[...]
Even a temporary freeze will have major consequences
The memo did not specify precisely what programs will be affected, but it could impact billions of dollars in federal spending. Programs that could be affected by the freeze include the National School Lunch Program, which “feeds about 28 million American schoolchildren each month” and Meals on Wheels, which “delivers about 250 million meals each year to more than 2 million seniors.” Other programs that could lose funding include disaster relief aid, assistance for homeless shelters, housing assistance, and education programs.
Diane Yentel, the chief executive of The National Council of Nonprofits, released a statement expressing concern about programs researching “cures for childhood cancer,” offering “safety from domestic violence,” and running “suicide hotlines” losing funding. “The impact of even a short pause in funding could be devastating and cost lives,” Yentel said.
According to a White House fact sheet posted to X by Washington Post reporter Jeff Stein, programs that provide “direct benefits to Americans [are] explicitly excluded from the pause and exempted from this review process.” The fact sheet claims that Medicaid, SNAP, funds for small businesses, Pell Grants, Head Start, and rental assistance will not be impacted.
But despite the White House’s claims, the Head Start reimbursement system was shut down in Connecticut yesterday, according to Senator Chris Murphy (D-CT). Head Start, which provides low-income children with access to preschool, “served 778,000 children in 2023.” Murphy said that the White House fact sheet was inaccurate and preschools in his state "cannot pay staff and will need to start laying off staff very soon and sending little kids home.”
Senator Ron Wyden (D-OR) posted on X that his staff had “confirmed reports that Medicaid portals are down in all 50 states following last night’s federal funding freeze.” Wyden called it a "blatant attempt to rip away health insurance from millions of Americans overnight and will get people killed.”
The White House said that the Medicaid outage was simply a technical problem. White House Press Secretary Karoline Leavitt posted on X that they were “aware of the Medicaid website portal outage” and the portal was expected to “be back online shortly.” The Medicaid website, however, warned of delays due to “executive orders regarding potentially unallowable grant payments.”
Nearly “a fifth of all Americans” receive health insurance through Medicaid.
The infamous federal funding freeze memo (that has since been temporarily stayed) is part of Trump’s plan to do an end-run around Congress and consolidate power in the Executive Branch.
Russell Vought sees the Office of Management and Budget as a “nerve center” that can be used to curtail DEI programs and purge the federal w
Amanda Becker at The 19th:
The U.S. Senate on Thursday approved Project 2025 architect Russell Vought to lead the Office of Management and Budget (OMB) on a party-line vote after Democrats held the floor overnight in an attempt to delay the confirmation since they did not have the numbers to block it.
Vought was confirmed by a vote of 53-47.
For 30 hours, starting on Wednesday afternoon and into Thursday evening, Democrats took turns on the Senate floor to protest Republican President Donald Trump’s nomination of Vought, who also led OMB at the tail end of Trump’s first administration.
“This is really important, that we raise the alarm as to what is happening,” said Sen. Chris Murphy of Connecticut, who spoke from 2-5 a.m., longer than most of his colleagues.
During his first stint at OMB, an under-the-radar entity that wields immense influence over the federal government by crafting the president’s budget, Vought helped Trump come up with a plan to jettison job protections for thousands of federal workers and assisted with a legally ambiguous effort to redirect congressionally appropriated foreign aid for Ukraine. In the years since, Vought founded two pro-Trump groups whose work has focused on discrediting structural racism and curtailing diversity, equity and inclusion (DEI) programs. The chapter that Vought wrote for Project 2025 detailed how the budget agency could be used to withhold money appropriated by Congress and eliminate dissent within agencies by purging them of employees.
Trump said repeatedly during his campaign that he had not read Project 2025 and did not know its authors, though at least 60 percent of its more than 350 contributors were linked to the president. These include appointees and nominees from his first administration, members of his prior transition team and unofficial advisers.
Project 2025 is a 920-page roadmap from the conservative Heritage Foundation about how Trump’s second administration could use the federal government to enact a far-right Christian agenda. If implemented — and some of the Trump administration’s earliest moves track the blueprint’s objectives — it has the potential to redefine rights long held by all Americans, with disproportionate impacts for women, LGBTQ+ people, people of color and vulnerable populations like the elderly and disabled.
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Last week an OMB letter sent by acting director Matthew Vaeth instructing federal agencies to pause “all activities related to obligation or disbursement of all Federal financial assistance” sent shock waves across Washington. The White House moved to quell the backlash. A federal judge earlier this week issued a temporary restraining order, extending a pause on implementing the directive.
US Senate confirms 53-47 along straight party lines to confirm Project 2025 architect Russ Vought to head up the OMB, reprising his role that he had in Trump’s 1st term.
