Trump administration freezes grant disbursements

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Today, the Trump administration announced a pause on federal financial assistance programs, including grants and loans, effective 5 p.m. ET. According to a White House Office of Management and Budget (OMB) memo obtained by Reuters, this temporary suspension aims to allow the administration to review agency programs and align funding with Trump’s priorities and legal requirements. Read Spending Freeze.

Under the directive, federal agencies have been given until Feb. 10 to provide detailed information about programs, projects, and activities affected by the pause. The memo explicitly states that assistance provided directly to individuals, such as Medicare and Social Security, will not be impacted by this freeze.

The memo states: “To the extent permissible under applicable law, Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and 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.”

The scope of the suspension has sparked significant concern across Washington, with experts suggesting it could affect tens of billions of dollars in payments. Brian Riedl, a senior fellow at the center-right Manhattan Institute, told The Washington Post that the funding delays could create significant challenges for grantees who rely on these funds for operational expenses like rent and salaries.

The memo targets several areas for review, including financial assistance for foreign aid, nongovernmental organizations, diversity, equity, and inclusion (DEI) initiatives, gender-related programs, and environmental projects explicitly. Federal agencies must temporarily pause all activities related to the obligation or disbursement of these funds, subject to applicable law.

While the administration frames this as a temporary measure to ensure alignment with its priorities, critics argue that the abrupt suspension of funding could disrupt essential services and programs that rely on federal financial assistance.

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Trump administration freezes grant disbursements

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