Trump Administration Orders Sweeping Pause on Federal Grants

The White House Office of Management and Budget has issued a directive ordering federal agencies to temporarily halt all federal grant and loan disbursements, according to a memo obtained by The Washington Post. The pause, which took effect Tuesday, could impact tens of billions of dollars in federal funding. It also makes it uncertain if states will be allowed to move forward with the BEAD program for new broadband deployment and digital equity activities.

Acting OMB Director Matthew J. Vaeth's memo requires agencies to conduct a "comprehensive analysis" to ensure their grant and loan programs align with President Trump's executive orders on diversity initiatives and clean energy spending. While the order explicitly excludes direct assistance to individuals, including Social Security and Medicare benefits, it affects a broad range of recipients including universities, research programs, nonprofits, and healthcare organizations.

The memo specifically mentions targeting financial assistance for "foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal." Federal agencies must submit detailed lists of suspended projects by February 10, with oversight assigned to senior political appointees rather than career officials.

Democratic leaders have criticized the move, with Senate Minority Leader Chuck Schumer calling for immediate reversal. Budget experts note that while presidents can temporarily defer spending, the legality and scope of this pause may face challenges. The order creates significant uncertainty for grant recipients who depend on federal funding for operational expenses.

Read the full story at The Washington Post: https://www.washingtonpost.com/business/2025/01/27/white-house-pauses-federal-grants/