Topline
The Trump administration on Wednesday revoked a controversial directive that ordered a temporary freeze in federal assistance programs, after widespread confusion and a court-ordered partial pause of the sweeping initiative.
President Donald Trump during a news conference in the Roosevelt Room of the White House on January ... More
Key Facts
The Trump administration released a one-sentence memo Wednesday that told agencies the directive has been revoked, according to multiple reports, though White House Press Secretary Karoline Leavitt said the freeze itself was still in place, and only the initial memo ordering the directives had been rescinded to “end any confusion.”
The temporary moratorium—detailed in a surprise Office of Management and Budget memo first obtained by independent journalist Marisa Kabas on Monday—ordered a pause in all federal assistance “including, but not limited to” grants related to diversity, foreign aid and “woke gender ideology.”
The memo didn’t specify which grants would and wouldn’t get cut off, and several reports suggested it could end up halting virtually all federal grant programs, pausing an enormous swath of the government’s budget—though the White House said Tuesday the pause would only cover spending that could run afoul of Trump’s recent executive orders on topics like diversity and energy.
Minutes before the pause was set to take effect at 5 p.m. Tuesday, a federal judge temporarily blocked the rule from applying to existing grant programs until Monday, multiple outlets reported.
The pause did not apply to Social Security and Medicare payments or “financial assistance provided directly to individuals,” and OMB could grant other exceptions on a “case-by-case basis.”
Agencies were told to examine which programs conflict with Trump’s executive orders to halt government spending that falls under “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal,” according to the memo.
All federal agencies were also tasked to appoint “a senior political appointee” to monitor spending “to ensure federal financial assistance conforms to administration priorities.”
Big Number
$3 trillion. That’s how much the federal government spent on assistance in the 2024 fiscal year, the memo reportedly said, though it’s unclear where the figure is from.
Order Prompts Immediate Legal Action
A federal judge in Rhode Island granted a request on Wednesday from a group of state attorneys generals seeking a restraining order barring the directive from taking effect. A day earlier, a federal judge in Washington, D.C. granted a temporary injunction while legal challenges wind their way through court. The first injunction was issued in response to a lawsuit filed by four advocacy groups—the National Council of Nonprofits, the American Public Health Association, the Main Street Alliance for small businesses and the LGBTQ advocacy nonprofit SAGE—against the OMB and Acting Director Matthew Vaeth. That lawsuit argues the OMB memo violates provisions of the Administrative Procedure Act prohibiting actions that are “arbitrary and capricious” and “in excess of statutory authority.” It also accuses the administration of violating the First Amendment by targeting “recipients of federal funding” who have expressed “viewpoints disfavored by the administration.”
What Programs Will The Grant Funding Pause Cover?
The scope of the pause is unclear as the language in the order could be broadly interpreted to apply to a sweeping range of funding programs across education, medical research, infrastructure programs, small business loans, housing and more. Grants that have been awarded but not disbursed were also subject to the pause, according to the Associated Press. White House guidance issued later Tuesday that sought to clarify the impact said the pause specifically applied to Trump’s executive orders on immigration, foreign aid, energy and the environment, DEI, abortion and transgender issues—a much narrower set of grants. Sen. Patty Murray, D-Wash., the top Democrat on the Senate Appropriations Committee, listed dozens of programs that could be affected in a memo to Senate Democrats obtained by Puck News, including grants to prevent violence against women and victims, federally funded public transit projects and grants to support firefighters, state and local law enforcement and veterans.
Does Trump’s Grant Freeze Impact Student Loans?
Federal Pell grants and direct loans are not impacted, the OMB told reporters, citing the provision in the order stating that financial assistance to “individuals” is exempt. The agency is still requesting a review of the programs pursuant to Trump’s other executive orders, however, USA Today reporter Zach Schermele wrote on X, citing OMB instructions.
Will Trump’s Grant Pause Impact Food Stamps, Medicare And Social Security?
No. Leavitt said “Social Security, Medicare, food stamps, welfare” and “assistance that is going directly to individuals will not be impacted.” The guidance said funds for small businesses, the Head Start child care program, rental assistance and “other similar programs” would remain in effect. Sen. Chris Murphy, D-Conn., said on X he didn’t believe the White House’s claims that Head Start wouldn’t be impacted, claiming the program has been impacted in Connecticut.
Will Medicaid Be Impacted?
The White House said in its guidance issued publicly later Tuesday that Medicaid “will continue without pause.” However, Medicaid portals went down in all 50 states on Tuesday. While Leavitt insisted no payments have been affected and said the portal would be “back online shortly,” Democratic senators attributed it to the funding freeze. Sen. Ron Wyden, D-Ore., called the move “a blatant attempt to rip away health insurance from millions of Americans overnight” that “will get people killed.” The White House did not say why the portal was down.
How Is Foreign Aid Impacted?
Trump last week ordered a separate, 90-day freeze on “foreign development assistance” pending a foreign policy review. A second, more sweeping order issued later in the week by the State Department, also halts foreign aid grants for 90 days, according to multiple reports. Military assistance for Israel and Egypt and emergency food aid is exempt from the freeze, the Wall Street Journal reported. The U.S. Agency for International Development put dozens of officials suspected of actions “designed to circumvent the President’s Executive Orders” on leave, according to multiple reports. The directive appears to apply to weapons assistance for Taiwan and Ukraine and mandates stop-work orders for nongovernmental organizations and aid groups to prohibit them from spending U.S. aid that’s already been distributed, the Journal reported.
Is The Freeze Legal?
Legal actions against the order are likely to argue Trump can’t pause funding that’s already been approved by Congress. The Impoundment Control Act of 1974 requires presidents to submit requests to Congress to halt federal funding that has already been appropriated but not yet spent, though Trump has argued for years the law is unconstitutional, a stance echoed by his OMB Director nominee Russell Vought during his Senate confirmation hearing. Some legal experts suggested Monday Trump’s order violated the law, even if it’s only temporary and the paused funding ends up being distributed. If legal challenges arise and are elevated to the Supreme Court, it could issue a ruling within weeks. The Supreme Court ruled against former President Richard Nixon’s use of impoundment to withhold water treatment funding for New York City, but the court paused the Impoundment Control Act while the case was playing out. Despite the high court being controlled 6-3 by conservatives, Georgetown University law professor Stephen Vladeck predicted the justices could determine Trump’s directives could usurp congressional authority. The Trump administration said in its Tuesday guidance the pauses were “not an impoundment under the Impoundment Control Act.”
How Have Democrats Reacted To The Grant Pause?
The memo created widespread alarm and confusion among Democrats and entities that rely on federal financial assistance. Sen. Chuck Schumer, D-N.Y., cast doubt on the legality of the order, writing on X that “Congress approved these investments and they are not optional, they are the law.” Sen. Amy Klobuchar, D-Minn., questioned whether it meant cancer trials at the National Institutes of Health would be put on hold. Murray and Rep. Rose DeLauro, D-Conn., predicted “far-reaching consequences” in a letter to Vaeth.
Further Reading
Trump Expected To Sign Executive Orders Banning DEI, Transgender Service Members From Military (Forbes)
Trump's Diversity Orders Rattle CEOs: What Companies Should Know About New DEI Rules (Forbes)
