According to an internal memo sent to agencies Monday, the White House is pausing all federal grants and loans. This move has sparked confusion around Washington. In a two-page document, Matthew J. Vaeth, the acting director of the White House Office of Management and Budget, instructed federal agencies to “temporarily pause all activities related to obligations or disbursement of all Federal financial assistance.”
The memo, a copy of which The Washington Post obtained, also calls for each agency to perform a “comprehensive analysis” to ensure its grant and loan programs are consistent with President Donald Trump’s executive orders. These orders aimed to ban federal diversity, equity, and inclusion initiatives and limit clean energy spending, among other measures.
The memo’s dictates go into effect today. It declares its orders should not be “construed” to affect Social Security or Medicare recipients and also says the federal financial assistance put on hold “does not include assistance provided directly to individuals.”
Experts said the memo as written was poised to bring a rapid halt to scores of federal functions, from assistance to homeless shelters to financial aid for college students. Health grants distributed by the Centers for Disease Control and Prevention, and state aid for disaster reconstruction, might face delays. Developers expecting federal grants to expand the nation’s energy supply could be disrupted. Questions quickly emerged about whether Medicaid, the health insurance program used by more than 70 million Americans, would see a pause in payments, which are distributed from the federal government to the states. –The Washington Post
Russell Vought and other Trump aides have said that major cuts to federal spending are necessary to contain the soaring national debt. They have, so far, ruled out cuts to the federal entitlement programs that are the primary drivers of the long-term deficit and also ruled out most new tax increases (more theft.)
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“The funding delays are going to prove very difficult for grantees under the impression the money is coming and have rent and salary payments dependent upon it,” said Brian Riedl, a senior fellow at the Manhattan Institute, a center-right think tank.
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