White House Halts All Federal Grants and Loan Disbursements

According to an internal letter released Monday, the White House budget office has ordered a freeze on all government grants and loans.

Federal agencies "must temporarily pause all activities related to the obligation or disbursement of all Federal financial assistance," White House Office of Management and Budget acting director Matthew Vaeth stated in the directive, which CNN received. The suspension also prevents the granting of new grants.

The email states that the suspension will not affect Social Security or Medicare benefits, nor will it cover "assistance provided directly to individuals."

The government assistance freeze is set to go into effect at 5 p.m. Tuesday and may affect trillions of dollars. It is the latest step by the Trump administration to gain control over government funds, including those that Congress has already approved.

"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," according to Vaeth.

The freeze is also in place for "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," according to the paper.

"Career and political appointees in the Executive Branch must align Federal spending and action with the will of the American people as expressed through Presidential priorities," according to Vaeth.

"Financial assistance should be dedicated to advancing Administration priorities, focusing taxpayer dollars on advancing a stronger and safer America, eliminating the financial burden of inflation for citizens, unleashing American energy and manufacturing, ending 'wokeness' and the weaponization of government, promoting efficiency in government, and Making America Healthy Again," said Trump. "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 that the budget office "may grant exceptions allowing Federal agencies to issue new awards or take other actions on a case-by-case basis."

It further notes that "to the extent required by law," agencies may take "certain administrative actions" such as cutting out funding.

The memo requests that agencies provide OMB with "detailed information on any programs, projects, or activities subject to this pause" by February 10.

Sen. Patty Murray of Washington and Rep. Rosa DeLauro of Connecticut, the senior Democratic appropriators in Congress, issued a letter to the White House on Monday night, explaining their "extreme alarm" at the action.

"The scope of what you are ordering is breathtaking, unprecedented, and will have devastating consequences across the country," the congressmen wrote in an email. "We write today to urge you in the strongest possible terms to uphold the law and the Constitution and ensure the law delivers all federal resources."

Senate Minority Leader Chuck Schumer was also quick to criticize the pause.

"Congress approved these investments, and they are not optional; they are the law," the New York Democrat said in a statement late Monday. "These grants help people in red and blue states, support families, help parents raise kids, and lead to stronger communities."

Schumer also stated that the measure jeopardizes "billions upon billions of community grants and financial support that help millions of people across the country."

"It will mean missed payrolls and rent payments and everything in between: chaos for everything from universities to non-profit charities," he said.

This story has been updated with further information.