A pause to all government grants and loans – estimated to be in the trillions of dollars – sent Capitol Hill into a tizzy on Monday as confusion swirled around the order sent across federal agencies, media reports say.
In an internal memo that circulated Monday, acting director of the White House Office of Management and Budget Matthew J. Vaeth directed federal agencies to “temporarily pause all activities related to obligations or disbursement of all Federal financial assistance,” according to the Washington Post, which obtained a copy of the two-page document.
It also asked each agency to conduct a “comprehensive analysis” to confirm that its grant and loan programs are in line with President Donald Trump’s new series of executive orders, including a ban on federal diversity, equity and inclusion (DEI) initiatives.
But several House Democratic aides were said to be “bewildered” by the temporary pause order and working to understand the impact on the federal government, the Post stated. The memo takes effect Tuesday and set a deadline of Feb. 10 for agencies to submit detailed lists of suspended projects.
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“The funding delays are going to prove very difficult for grantees under the impression the money is coming, and have rent and salary payments dependent upon it,” Brian Riedl, a senior fellow at the Manhattan Institute, a center-right think tank, told the Post. “It seems like a very big deal.”
The pause should not be “construed” to affect Social Security or Medicare recipients, the memo stated, and also does not extend to federal assistance provided directly to individuals, according to the Post.
“But the document says programs affected are 'including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal,”' the publication added.
Federal grants help fund a wide range of recipients and causes, with money being doled out to universities “for education and research programs, and to nonprofits for health care and studies, among thousands of other purposes," the Post said.
“They’re taking a broad view of what they mean within this order, and I think that has to mean that it covers everything else other than the things that go to individuals,” Bobby Kogan, a federal budget expert at the Center for American Progress, told the Post. “That can mean things like Head Start, which goes to child-care facilities, or things that go to states, like the Low Income Home Energy Assistance Program. It’s everything that does not go directly to individuals."