The White House has issued a memo that temporarily suspends federal grants, loans and other financial assistance programs for executive departments pending an assessment of the funding.
The Wall Street Journal first reported the memo, saying it was sent out by the Office of Management and Budget (OMB) around 5 p.m. on Monday.
A White House official told Fox News Digital that the memo was initially ‘misreported’ and does not constitute a funding freeze on federal financial assistance across the board. The official said the pause is expressly limited to programs, projects, and activities that may be impacted by President Donald Trump’s executive orders, such as ending diversity, equity and inclusion (DEI), the Green New Deal, and funding nongovernmental organizations that the White House suspect undermine national interest.
The memo exempts any program that provides direct benefits to Americans from the review process. That includes Social Security, Medicare and the Supplemental Nutrition Assistance Program (SNAP), the official said.
‘This is a good government measure to ensure that taxpayer money is being spent in accordance with law and the President’s policies,’ the official said in defense of the memo. ‘The Biden Administration forced their extreme ideological views into every corner of government and weaponized the government against the American people. They were taking actions up until the last hours trying to tie the hands of President Trump from delivering for the American people.’
The White House official told Fox News Digital that the pause is not yet in effect and ‘was designed to give agencies lead time to begin determining which programs are not affected and which programs will need to be reviewed for conformity with the President’s executive orders.’ The official further explained that the directive includes a ‘safety valve’ that the pause ‘shall only occur as consistent with law, which will allow agencies to review spending in conformity with applicable laws.’
‘If the activity is not in conflict with the President’s priorities, it will continue with no issues,’ the White House official told Fox News Digital. ‘This is similar to how HHS [Department of Health and Human Services] stopped the flow of grant money to the WHO [World Health Organization] after President Trump announced the U.S. withdrawal from the organization. Or how the State Department halted several million dollars going to condoms in Gaza this past weekend.’
The memo, which takes effect Tuesday at 5 p.m., said 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,’ according to the Journal.
The memo reportedly said the federal government spent more than $3 trillion on federal assistance, including grants and loans, in the 2024 fiscal year and that the pause allows ‘time to review agency programs and determine the best uses of the funding for those programs consistent with the law and the President’s priorities.’
Each agency must ‘complete a comprehensive analysis of all their Federal financial assistance programs to identify programs, projects and activities that may be implicated by any of the President’s executive orders,’ the memo continued, according to the Journal, adding that the pause must be applied ‘to the extent permissible under applicable law.’
Senate Minority Leader Chuck Schumer, D-N.Y., condemned the memo, telling the Journal that pausing the funding puts ‘billions upon billions of community grants and financial support that help millions of people across the country’ at risk.
‘It will mean missed payrolls and rent payments and everything in between: chaos for everything from universities to non-profit charities, state disaster assistance, local law enforcement, aid to the elderly, and food for those in need,’ Schumer said, adding that Congress approved the funding for the federal assistance programs.
However, the White House official denied that the memo would result in any devastating effects on programs, explaining to Fox News Digital that the OMB explicitly instructed agencies to identify programs with immediate deadlines so that ‘exceptions can be granted without any program impact.’ It does not constitute a permeant stop of the funds.
The pause ‘could be as short as a day if an agency determines that the funds at issue do not conflict with the Administration’s policies,’ the official said. ‘To act as faithful stewards of taxpayer money, new administrations must review federal programs to ensure that they are being executed in accordance with the law and the new President’s policies. If the pause will have an adverse impact, the memo expressly provides that agencies can seek exemptions on a case-by-case basis.’
The memo included a footnote that said Medicare, Social Security benefits and assistance provided directly to individuals were exempt from the pause, but its otherwise broad language caused confusion Monday night among some federal employees, as administrators requested advice from their internal counsel regarding which programs the pause applied to and how the departments should respond, one source told the Journal.
The memo included a Feb. 10 deadline for agencies to submit a thorough summary of all paused programs, projects and activities to the Office of Management and Budget.