US President Donald Trump has ordered a temporary halt to federal grants, loans, and financial assistance programs. A leaked memo verified by CBS News outlines this move, with Medicaid and Social Security benefits remaining unaffected.
Agencies Ordered to Pause Spending
The acting head of the Office of Management and Budget (OMB) instructed government agencies to align spending with Trump’s priorities. The directive temporarily halts financial aid programs, including foreign aid, nongovernmental organization funding, and green energy initiatives. Agencies must pause new awards and suspend funding disbursements under existing agreements. A deadline of 5:00 PM EST was set for compliance, with reports on paused programs due by February 10.
This decision follows a broader halt to nearly all foreign aid, with exceptions for emergency food aid and military funding for Israel and Egypt. Trump had earlier signed an executive order pausing foreign development assistance for 90 days to ensure alignment with his policies.
Criticism and Potential Legal Challenges
Critics from the Democratic Party warn of severe consequences for vital programs, including food assistance, cancer research, and suicide hotlines. Diane Yentel of the National Council of Nonprofits raised concerns about the pause’s impact on critical services.
Democratic leaders in Congress expressed alarm, calling the move “unprecedented” and urging the administration to follow constitutional and legal guidelines. Senator Chuck Schumer emphasized that these investments are mandated by law and cautioned about potential disruptions to payrolls, rent payments, and operations of universities and charities.
Legal challenges to the decision appear likely, given Congress had already appropriated the funds now placed on hold. The leaked memo, signed by acting OMB Chief Matthew Vaeth, has not yet been addressed by the White House.
The US, the world’s largest international aid donor, spent $68 billion on foreign aid in 2023. This pause in funding raises concerns about the broader implications for domestic and international programs.