White House Pauses Federal Grants, Loans

Some lawmakers from the Democratic Party have called on the Office of Management and Budget to reverse the memo.

The Office of Management and Budget (OMB) directed federal agencies, in a Jan. 27 memorandum, to suspend the distribution of grants, loans, and other financial assistance while the programs are under review.

A memo, from OMB Acting Director Matthew Vaeth, directs federal agencies to conduct a comprehensive analysis of all financial assistance programs to determine whether they are aligned with the executive orders signed by President Donald Trump after his inauguration on Jan. 20.

“In the interim, to the extent permissible under applicable law, 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,” it stated.

Vaeth stated in his memo that the pause will allow the government more time to review agency programs and determine the best uses of funding for those programs consistent with the law and Trump’s priorities.

The suspension will take effect at 5 p.m. on Jan. 28, but the OMB may allow exceptions for certain federal awards to be issued on a case-by-case basis, according to the memo.

The memo required agencies to submit by Feb. 10 detailed information on any programs and activities subject to the pause. Agencies will also need to identify “any legally mandated actions or deadlines” for assistance programs arising while the review is ongoing, it stated.

Democratic House Appropriations Committee ranking member Rosa DeLauro and Senate Appropriations Committee vice chair Patty Murray sent a letter to Vaeth on Jan. 28 urging him to reverse the memo.

They raised concerns about Trump’s executive orders and said the OMB memo would result in “further disarray and inefficiency” by halting vast swaths of federal financial assistance to states and communities.

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

The lawmakers argued that the administration’s actions would lead to “far-reaching consequences” for nearly all federal programs and activities and could potentially jeopardize people’s financial security.

“The law is the law—and we demand you in your role as Acting OMB Director reverse course to ensure requirements enacted into law are faithfully met and the nation’s spending laws are implemented as intended,” they stated.

One of the executive orders referenced in Vaeth’s memo called for the removal of policies and programs related to diversity, equity, and inclusion (DEI) within the federal government. This order requires federal agencies to terminate all offices and positions related to environmental justice, as well as any equity-focused action plans, grants, and contracts within 60 days of the order’s issuance.

During his inauguration on Jan. 20, Trump said that he aims to “end the government policy of trying to socially engineer race and gender into every aspect of public and private life.”

“We will forge a society that is colorblind and merit-based,” the president said in his address. “As of today, it will henceforth be the official policy of the United States government that there are only two genders: male and female.”

The Epoch Times reached out to the OMB for comment but did not receive a response by publication time.

Reuters contributed to this report.