Trump freezes federal aid: What it means for Social Security, Medicare, universities and more

In another bold executive action, President Donald Trump has authorized a broad freeze on $3 trillion in federal funds until his administration completes a full spending review.

According to a two-page memo from Acting Director of the Office of Management and Budget Matthew J. Vaeth, the pause will become effective at 5 p.m. Tuesday — less than 24 hours after the memo was issued. Officials will then have until Monday, Feb. 10, to review programs, according to the memo.

“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,” Vaeth’s memo reads.

The memo explains that all federal spending must align with “Presidential priorities” and continues by citing Trump’s emergency orders on immigration, foreign aid, the environment, and Diversity, Equity and Inclusion programs.

Here’s what the Trump administration’s actions mean for various organizations receiving federal funding.

Social Security and Medicare

The memo explicitly specifies that Social Security, Medicare and other “payments to individuals” will not be impacted by the pause.

However, the memo did not mention how the pause would impact Medicaid, food stamps, disaster assistance and other programs. Instead, it merely established that the pause should be implemented “to the extent permissible under applicable law.”

Trump’s new press secretary, 27-year-old Karoline Leavitt, is scheduled to hold her first briefing on Tuesday afternoon. The briefing will likely clarify the memo’s impact on direct payments from such welfare programs.

University grants

The pause is likely to impact billions of dollars in health care research and education programs in the postsecondary world, as Vaeth’s memo calls for halting grants that have been awarded but not yet spent.

The Association of American Universities, which is composed of America’s 71 leading research universities, said Tuesday it is “still working to assess” the impact a pause on federal grants would have on its member institutions.

In a X post Tuesday morning, Sen. Amy Klobuchar, a Minnesota Democrat, asked if the administration would be “stopping” cancer trials by the Bethesda-based National Institute of Health (NIH).

The administration already acted to freeze some NIH operations last week, a decision condemned by the American Association of University Professors.

Legalese: The Impoundment Control Act

Trump seems to believe the justification for taking such drastic action on federal funding comes from his interpretation of the Impoundment Control Act of 1974. Passed by Congress, the law restricted a president’s power to withhold spending authorized by Congress.

Democrats like Senate Minority Leader Chuck Schumer argue Trump lacks the authority to sidestep Congress’ approval of budget matters as outlined by the 1974 law.

“Donald Trump must direct his Administration to reverse course immediately and the taxpayers’ money should be distributed to the people.” Schumer said in a statement Monday night. “Congress approved these investments and they are not optional; they are the law.”