President Donald Trump has ordered a pause on federal grants, loans, and other forms of financial assistance. This decision, outlined in a leaked government memo verified by CBS News, directs government agencies to review their spending to ensure it aligns with the administration’s priorities. The full ramifications of the pause are not yet fully clear, but it is expected to affect a broad range of programs, including non-profit initiatives and foreign aid.
The memo, issued by the acting head of the Office of Management and Budget (OMB), Matthew Vaeth, requires all federal agencies to halt the disbursement of funds under existing awards and stop issuing new ones. This includes financial assistance related to foreign aid, non-governmental organizations (NGOs), diversity, equity, and inclusion (DEI) programs, gender ideology initiatives, and the Green New Deal, among others. The deadline for reporting which programs have been paused is set for February 10, raising concerns about the immediate impact on vital services across the country.
The pause comes shortly after the U.S. Department of State’s decision to halt nearly all foreign aid, except for emergency food aid and military funding to Israel and Egypt. Trump had previously issued an executive order for a 90-day review of foreign development assistance to assess its efficiency and alignment with U.S. foreign policy objectives. The U.S. is the world’s largest donor of international aid, having contributed approximately $68 billion in 2023 alone.
While the pause does not affect essential services such as Medicaid and Social Security benefits, critics argue that the disruption could have devastating consequences. Diane Yentel, president of the National Council of Nonprofits, warned that the pause could impact crucial services like cancer research, food assistance, and suicide prevention hotlines, which many Americans rely on. The American public’s dependence on these programs for basic needs has led to widespread concern about the potential for long-term harm.
Democratic leaders in Washington, D.C., have strongly criticized the move. Senate Democratic Leader Chuck Schumer and top House appropriators, including Senator Patty Murray and Congresswoman Rosa DeLauro, have expressed “extreme alarm” over the scope of the pause. They argue that the funding was approved by Congress and is legally mandated. Schumer called the decision “unprecedented,” emphasizing that it could lead to chaos, from missed payrolls to disruptions in services provided by universities and non-profit charities.
As this situation continues to develop, it is likely to face legal challenges, with many questioning the limits of presidential authority over federal spending. The pause, while intended to align government programs with the current administration’s priorities, has sparked a heated debate over its potential impacts and legality.
