U.S. President Donald Trump has ordered a temporary pause on federal grants, loans, and other financial assistance programs, according to a leaked government memo verified by CBS News. The memo, signed by acting Office of Management and Budget (OMB) chief Matthew Vaeth, instructs federal agencies to ensure spending aligns with the president’s priorities.
While the memo specifies that Medicaid and Social Security benefits are exempt from the pause, the broader impact of this decision remains unclear. The freeze comes shortly after a similar halt on nearly all U.S. foreign aid was announced last week.
The memo emphasizes a review of funding related to foreign aid, nongovernmental organizations, and policies tied to “DEI, woke gender ideology, and the Green New Deal.” Agencies have been instructed to cease issuing new awards and suspend funds under existing awards until the review is complete. Reports detailing the programs affected must be submitted by February 10, with an initial deadline for pausing financial assistance set for 5:00 PM EST (22:00 GMT) today.
Critics argue the move could disrupt essential services. Diane Yentel, CEO of the National Council of Nonprofits, warned the freeze might halt cancer research, food assistance programs, and suicide hotlines. Democratic lawmakers, including Senator Patty Murray and Congresswoman Rosa DeLauro, have strongly criticized the decision, describing it as “breathtaking, unprecedented, and devastating.”
“The scope of what you are ordering is extraordinary,” the lawmakers wrote in a letter to the White House. “We urge you in the strongest possible terms to ensure all federal resources are delivered in accordance with the law.”
Senate Minority Leader Chuck Schumer also voiced his opposition, stating, “Congress approved these investments, and they are not optional; they are the law. This freeze will create chaos, from missed payrolls to disruption of critical programs supporting universities and nonprofits.”
The decision mirrors last week’s announcement by the Department of State, which froze nearly all foreign assistance programs. The freeze affected development assistance, military aid, and other initiatives, excluding emergency food aid and military funding for Israel and Egypt. The U.S., the world’s largest international aid donor, spent $68 billion on foreign aid in 2023, according to government figures.
The White House has yet to comment officially on the leaked memo, but it underscores Trump’s ongoing focus on aligning federal spending with his administration’s policy goals. This latest move will likely face legal challenges regarding the extent of presidential authority over congressional appropriations.