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Trump plans to ‘pause’ federal grants, loans. What happens next?
In a sweeping order that surpasses the scope of dozens of executive orders President Donald Trump signed in just over a week as president, his top budget office has directed agencies to pause federal grants so the administration can review them for whether they fit the president’s priorities.
The acting head of the Office of Management and Budget, which handles executive branch operations, sent the memo Monday, prompting consternation in Washington over which federal government programs would continue to be in effect.
There’s limited information about the specifics of the order. Here’s what we know.
When is this in effect?
The memo says the pause will go into effect Tuesday at 5 p.m.
What is affected?
The memo points to a legal definition of federal financial assistance, which includes grants, cooperative agreements, surplus donations, loans and interest subsidies. It exempts assistance received directly by individuals, including Medicare and Social Security benefits.
The memo refers to an executive order Trump signed on Jan. 20, which ordered department and agency heads to “immediately pause” new programs and disbursements of development assistance to foreign countries. The Department of State announced this pause on Sunday.
On the domestic side, the federal government issues grants for everything from road building to scientific research. It is unclear which categories will be affected. While the directive is broad, including all federal financial assistance, the memo also includes a caveat that this can only affect federal assistance “to the extent permissible under applicable law.”
What happens next?
The memo instructs agencies to pause new awards, disbursement of funds under open awards and “other relevant agency actions … to the extent permissible by law” that may be covered by Trump’s myriad executive orders.
By Feb. 10, agencies must submit reports detailing programs subject to this pause.
What agencies might be affected?
The memo does not specify which grant-making agencies must abide by the order, but the Office of Management and Budget has broad power over the executive branch that touches nearly every agency.
More than two dozen agencies make grants, including the Department of Education, the Department of Transportation, and the Department of Defense, according to Grants.gov.
How much money is affected?
The memo does not outline a sum of how much in federal grants must immediately be halted but says that federal financial assistance totaled $3 trillion in fiscal year 2024.
Why is this happening?
The memo says, “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.” The memo then lists Trump’s priorities, including making the country safer, ending “wokeness,” and promoting government efficiency.