An internal memo sent by the White House has instructed agencies to pause all federal grants while evaluating their compliance with President Donald Trump’s executive orders targeting policies that promote diversity, equity and inclusion (DEI), among others.

Matthew Vaeth, the Acting Director of the Office of Management and Budget, noted that federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, “including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”

The memo included some vague caveats – including that agencies pause grants “to the extent permissible under applicable law”, although it is not clear how the agencies will interpret that.

Another line in the memo stipulated that “nothing in this memo should be construed to impact Medicare or Social Security benefits.”

“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.”
Matthew Vaeth

The freeze on federal assistance is slated to take effect at 5 p.m. Tuesday, January 28, 2025.

It marks the latest move by the Trump administration to exert control over federal funding, even that which has already been allocated by Congress.

The memo could impact billions of dollars of federal grant money for state, local and tribal governments.

Even before the office of management and budget circulated its memo on federal grants, government watchdogs warned that Donald Trump’s efforts to restrict funds already appropriated by congress could be illegal.

In response to Trump’s executive actions ordering, among other measures, a 90-day pause on foreign development funds and restrictions on funding for “sanctuary cities”, the non-partisan watchdog group Citizens for Responsibility and Ethics in Washington (Crew) sent a letter to congress warning that Trump could be running afoul of the Impoundment Control Act. “Our constitutional system of checks and balances gives Congress the power of the purse,” the authors of the letter wrote.

The authors added, “Put simply, it is illegal and contrary to our constitutional structure for the president to disobey appropriations acts duly enacted after Congress publicly considers and determines funding levels for the federal government.”

Order To Pause Federal Grants Decried

Democrats and advocacy groups blasted the order to pause federal grants, warning its effects would sow chaos.

Senator Chuck Schumer in a statement, asserted, “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.”

He added that if this continues, the American people will “pay an awful price.”

In a letter, Senator Patty Murray and Congresswoman Rosa DeLauro – top Democrats on the House and Senate budget committees said that the move raised “extreme alarm.”

“The scope of what you are ordering is breathtaking, unprecedented, and will have devastating consequences across the country.

“We write today to urge you in the strongest possible terms to uphold the law and the Constitution and ensure all federal resources are delivered in accordance with the law.”
Senator Patty Murray and Congresswoman Rosa DeLauro

Diane Yentel, President and CEO of the National Council on Nonprofits, said in a statement, “This order is a potential 5-alarm fire for nonprofits and the people and communities they serve.”

“From pausing research on cures for childhood cancer to closing homeless shelters, halting food assistance, reducing safety from domestic violence, and shutting down suicide hotlines, the impact of even a short pause in funding could be devastating and cost lives.”
Diane Yentel