(CNN) — The White House budget office has ordered a pause on all federal grants and loans, according to an internal memorandum sent Monday, potentially impacting trillions in government spending and halting public programs that affect millions of Americans.
Federal agencies “must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance,” White House Office of Management and Budget acting director Matthew Vaeth said in the memorandum, a copy of which was obtained by CNN. The pause also blocks the issuance of new grants.
The memo specifies that the pause will not affect Social Security or Medicare benefits, nor does it include “assistance provided directly to individuals.”
The freeze on federal assistance is slated to take effect at 5 p.m. Tuesday. It marks the latest move by the Trump administration to exert control over federal funding, even that which has already been allocated by Congress.
“This temporary pause will provide the Administration 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,” Vaeth wrote.
The memo suggests that the pause is in line with President Donald Trump’s executive orders last week.
The pause also applies to “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 memo.
“Career and political appointees in the Executive Branch have a duty to align Federal spending and action with the will of the American people as expressed through Presidential priorities,” Vaeth wrote.
According to the memo, the budget office “may grant exceptions allowing Federal agencies to issue new awards or take other actions on a case-by-case basis.”
“To the extent required by law,” agencies may also take “certain administrative actions” like closing out grants, it states.
The memo calls on agencies to submit to OMB “detailed information on any programs, projects or activities subject to this pause” by February 10.
Democrats and nonprofits express alarm
Word of the order came Monday evening without further explanation from the Trump administration, leading charities that receive government grants and loans to question which organizations will be affected.
“This order is a potential 5-alarm fire for nonprofits and the people and communities they serve,” Diane Yentel, president and CEO of the National Council on Nonprofits, said in a statement Monday.
“From pausing research on cures for childhood cancer to closing homeless shelters, halting food assistance, reducing safety from domestic violence, and shutting down suicide hotlines, the impact of even a short pause in funding could be devastating and cost lives,” said Yentel.
The Association of American Universities, which is composed of America’s 71 leading research universities, including Notre Dame and Georgia Tech, said Tuesday it is “still working to assess” the impact of the pause.
Member universities “earn the majority of competitively awarded federal funding for research that improves public health, seeks to address national challenges, and contributes significantly to our economic strength, while educating and training tomorrow’s visionary leaders and innovators,” the association said.
Sen. Patty Murray of Washington state and Rep. Rosa DeLauro of Connecticut – the top Democratic appropriators in Congress – wrote a letter to the White House on Monday night outlining their “extreme alarm” with the move.
“The scope of what you are ordering is breathtaking, unprecedented, and will have devastating consequences across the country,” the lawmakers wrote. “We write today to urge you in the strongest possible terms to uphold the law and the Constitution and ensure all federal resources are delivered in accordance with the law.”
Senate Minority Leader Chuck Schumer also quickly criticized the pause.
“Congress approved these investments and they are not optional; they are the law,” the New York Democrat said in a statement Monday night. “These grants help people in red states and blue states, support families, help parents raise kids, and lead to stronger communities.”
Schumer added that the action jeopardizes “billions upon billions of community grants and financial support that help millions of people across the country.”
“It will mean missed payrolls and rent payments and everything in between: chaos for everything from universities to non-profit charities,” he said.
CNN’s Manu Raju, Andy Rose and Rebekah Riess contributed to this report.
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