Trump Pauses All Federal Grants Starting Today—But Details Are Scarce. Here’s What We Know

 

President Donald Trump during a news conference in the Roosevelt Room of the White House on January 21, 2025 in Washington, DC.

The Trump administration paused all federal financial assistance programs and ordered agencies to conduct a review of whether the programs align with the executive orders President Donald Trump issued last week—a surprise decision leaked Monday that could impact tens of billions of dollars in government spending.

Key Facts

The temporary moratorium, detailed in an Office of Management and Budget memo first obtained by independent journalist Marisa Kabas and published on Bluesky Monday, applies to all federal grants, an unnamed source familiar with the order told the Washington Post.

The pause becomes effective at 5 p.m. EST Tuesday and agencies are required to report to the Office of Management and Budget by Feb. 10 which programs and activities they have paused.

Agencies must examine which programs conflict with Trump’s executive orders to halt government spending that falls under “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal,” according to the memo.

All federal agencies must also task “a senior political appointee” to monitor spending “to ensure federal financial assistance conforms to administration priorities.”

The pause does not apply to Social Security and Medicare payments or “financial assistance provided directly to individuals,” and OMB could grant other exceptions on a “case-by-case basis.”

Big Number

$3 trillion. That’s how much the federal government spent on assistance in the 2024 fiscal year, the memo reportedly said, though it’s unclear where the figure is from.

What Programs Will The Grant Funding Pause Cover?

The language in the order can be broadly interpreted but could apply to a sweeping range of funding programs across education, medical research, infrastructure programs, small business loans, housing and more. Grants that have been awarded but not disbursed are also subject to the pause, according to the Associated Press. OMB Acting Director Matthew Vaeth wrote in the memo that “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.”

Does Trump’s Grant Freeze Impact Student Loans?

Federal Pell grants and direct loans are not impacted, the OMB told reporters, citing the provision in the order stating that financial assistance to “individuals” is exempt. The agency is still requesting a review of the programs pursuant to Trump’s other executive orders, however, USA Today reporter Zach Schermele wrote on X, citing OMB instructions.

How Is Foreign Aid Impacted?

Trump last week ordered a separate, 90-day freeze on “foreign development assistance” pending a foreign policy review. A second, more sweeping order issued later in the week by the State Department, also halts foreign aid grants for 90 days, according to multiple reports. Military assistance for Israel and Egypt and emergency food aid is exempt from the freeze, the Wall Street Journal reported. The U.S. Agency for International Development put dozens of officials suspected of actions “designed to circumvent the President’s Executive Orders” on leave, according to multiple reports. The directive appears to apply to weapons assistance for Taiwan and Ukraine and mandates stop-work orders for nongovernmental organizations and aid groups to prohibit them from spending U.S. aid that’s already been distributed, the Journal reported.

Will Food Stamps Be Affected?

It’s unclear if the exception to “individuals” who receive government assistance applies to food aid programs, such as the Supplemental Nutrition Assistance Program (SNAP), or others in which funding is provided to households rather than individuals. States distribute SNAP money and split the administrative costs with the federal government.

Is The Freeze Legal?

The order is likely to face legal challenges, particularly regarding funding that has already been approved by Congress. New York Attorney General Letitia James said Tuesday her office will take “imminent legal action” against what she called an “unconstitutional pause on federal funding.” The Impoundment Control Act of 1974 requires presidents to submit requests to Congress to halt federal funding that has already been appropriated but not yet spent, though Trump has argued for years the law is unconstitutional, a stance echoed by his OMB Director nominee Russell Vought during his Senate confirmation hearing. Some legal experts suggested Monday Trump’s order violated the law, even if it’s only temporary and the paused funding ends up being distributed. If legal challenges arise and are elevated to the Supreme Court, it could issue a ruling within weeks. The Supreme Court ruled against former President Richard Nixon’s use of impoundment to withhold water treatment funding for New York City, but the court paused the Impoundment Control Act while the case was playing out. Despite the high court being controlled 6-3 by conservatives, Georgetown University law professor Stephen Vladeck predicted the justices could determine Trump’s directives could usurp congressional authority.

How Have Democrats Reacted To The Grant Pause?

The memo has created widespread alarm and confusion among Democrats and entities that rely on federal financial assistance. Sen. Chuck Schumer, D-N.Y., cast doubt on the legality of the order, writing on X that “Congress approved these investments and they are not optional, they are the law.” Sen. Amy Klobuchar, D-Minn., questioned whether it meant cancer trials at the National Institutes of Health would be put on hold, and Sen. Patty Murray, D-Wash., and Rep. Rose DeLauro, D-Conn., predicted “far-reaching consequences” in a letter to Vaeth.