President Donald Trump's decision to freeze hundreds of billions of dollars in federal loans and grants could tank the U.S.'s stable economy, according to analysis from CNN.
Trump's order came this week in the form of a two-page memo "packed with right-wing rhetoric" that mandated a thorough review of the funding programs to make sure each disbursement aligned with the administration's "anti-woke" values.
"It’s difficult to overstate the chaos that the directive, with its ambiguous wording, unleashed within organizations across broad swaths of the economy that rely on federal funds — including programs that provide essential medical services, emergency aid for farmers, cancer center support and even a program covering the cost of caskets for deceased veterans with no next of kin," according to senior writer Allison Morrow.
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This "chaos," Morrow wrote, could upend a labor market that's remained "historically strong despite a two-year inflation spike and painfully high interest rates. And contrary to Trump’s campaign rhetoric, the US economy is in a historically good spot — inflation is mostly tamed, interest rates are coming down and consumer spending has powered back-to-back-quarters of 3% annualized GDP growth."
Morrow added, "None of that is guaranteed to last, especially if thousands of workers who rely on federal grants find their jobs suddenly unfunded and businesses lose faith in the government making good on its promises."
Shortly after the freeze went into effect, this week a federal judge imposed a "brief administrative stay to allow for legal challenges.
New Jersey's Attorney General, whose state has joined a coalition of others to sue the federal government, claimed the freeze has "illegally halted funds for necessary government programs like Medicaid, and has taken needed money away from law enforcement."
