Why has Trump paused federal grants?

President Donald Trump has ordered all federal agencies to stop issuing federal grants and loans, according to an internal memorandum sent on Monday.

Why It Matters

The new order may impact billions of dollars in funding allocated to state and local governments. The federal government funds thousands of programs, including research projects, housing subsidies and educational grants.

Why Has Trump Paused Federal Grants?

The president has signed a raft of executive orders since entering office on January 20. The memo says it applies to prior executive orders for various initiatives, including domestic infrastructure, energy projects, diversity programs, and foreign aid.

“The use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve,” read the memo, authored by Matthew J. Vaeth, acting director for the Office of Management and Budget.

“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 continued: “To implement these orders, each agency must complete a comprehensive analysis of all of their Federal financial assistance programs to identify programs, projects, and activities that maybe implicated by any of the President’s executive orders.”

Newsweek has contacted the White House and the Office of Management and Budget via email for comment outside of regular working hours.

What Will Be Impacted?

For now, it is not immediately clear exactly what will be impacted, although there is an exception for funding and grants paid directly to American citizens.

The memo says the Office of Management and Budget has the ability to grant exceptions on a “case-by-case basis.”

NPR has reported that, following distribution of the memo, the National Science Foundation canceled all of its grant review panels this week.

Is Social Security Impacted by Federal Grants Pause?

No—the memo specifically outlines that nothing “should be construed to impact Medicare or Social Security benefits.”

What People Are Saying

Senate Minority Leader Chuck Schumer said: “They say this is only temporary, but no one should believe that. Donald Trump must direct his Administration to reverse course immediately and the taxpayers’ money should be distributed to the people. Congress approved these investments and they are not optional; they are the law.”

Democrats Senator Patty Murray, Washington, and Representative Rosa DeLauro, Connecticut, said in a letter to the White House on Monday: “The scope of what you are ordering is breathtaking, unprecedented, and will have devastating consequences across the country. 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.”

What Happens Next

The suspension goes into effect on January 28 at 5 p.m. ET. Agencies have until February 10 to submit detailed information on any programs, projects or activities subject to the pause, the memo outlined.