Breaking News

White House

White House Orders Temporary Halt on Federal Grants and Loans

Washington, D.C., January 28, 2025 – The Europe Today: The White House budget office has mandated a temporary suspension of all federal grants and loans, as outlined in an internal memorandum sent on Monday. The memo, signed by Acting Director Matthew Vaeth of the White House Office of Management and Budget (OMB), directs federal agencies to pause all activities related to the obligation or disbursement of federal financial assistance, effective at 5 p.m. on Tuesday.

This temporary halt also includes a freeze on the issuance of new grants, although certain critical financial assistance, such as Social Security and Medicare benefits, is exempt. The pause, which may impact trillions of dollars, is part of a broader effort by the Trump administration to assert more control over federal funding, including funds already allocated by Congress.

“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,” Vaeth wrote in the memorandum, which was obtained by media. The memo also outlines that the freeze would affect a variety of federal programs, including foreign aid, nongovernmental organizations, and initiatives related to diversity, equity, and inclusion (DEI), as well as environmental policies such as the Green New Deal.

The suspension is aimed at ensuring that federal spending aligns with the Trump administration’s priorities, including promoting a stronger national defense, reducing inflation, enhancing American manufacturing, and limiting policies related to social issues. “Financial assistance should be dedicated to advancing Administration priorities, focusing taxpayer dollars to advance a stronger and safer America,” Vaeth emphasized.

Exceptions may be granted by the OMB on a case-by-case basis, and certain administrative actions, such as closing out existing grants, may continue if legally required. Federal agencies have been instructed to submit detailed information on the programs affected by the pause by February 10.

The move has drawn sharp criticism from congressional Democrats. Senator Patty Murray of Washington state and Representative Rosa DeLauro of Connecticut, both senior Democratic appropriators, expressed their “extreme alarm” at the action, calling it “breathtaking” and warning of its “devastating consequences” nationwide.

Senate Minority Leader Chuck Schumer also condemned the freeze, stressing that the funding had been approved by Congress and should not be subject to arbitrary suspension. “These grants help people in red states and blue states, support families, help parents raise kids, and lead to stronger communities,” Schumer said in a statement, warning that the pause would disrupt essential services and financial support across the country, including payrolls, rent payments, and operations for universities and non-profit organizations.

The White House has not provided a timeline for how long the pause will last, but the memorandum signals the administration’s continued efforts to reevaluate and potentially reshape federal financial assistance.