Trump administration orders federal funding freeze on all public loans, grants and more aid
A memo from the White House budget office is calling for a spending freeze on federal assistance by 5 p.m. Tuesday, which could affect everything from aid to nonprofits, universities, small business loans and state and local government grants.
The freeze could have wide-ranging implications, with the White House noting that $3 trillion was spent in 2024 on federal assistance programs.
“This memorandum requires Federal agencies to identify and review all Federal financial assistance programs and supporting activities consistent with the President’s policies and requirements,” the memo says.
The White House has not yet commented on the memo, which was leaked Monday night. CBS News has confirmed its authenticity.
The Monday night memo from the Office of Management and Budget is directing federal agencies to assess compliance with President Trump’s executive orders — specifically targeting “DEI, woke gender ideology and the Green New Deal.” It does not give specifics on what these policies refer to, especially since the Green New Deal was never signed into law.
“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,” the memo says.
The White House memo said it will not affect Medicare or Social Security benefits.
Democrats were already on the offensive on Tuesday morning. Senate Minority Leader Chuck Schumer strongly condemned the move at a news conference, saying “in an instant, Donald Trump has shut off billions, perhaps trillions, of dollars that directly support states, cities, towns, schools, hospitals, small businesses, and most of all, families.”
“This is a dagger at the heart of the average American family,” Schumer said, adding that he and his Democratic colleagues are receiving a “deluge” of calls to their offices from people panicked over what the memo means for them.
“This decision is lawless, dangerous, destructive, cruel. It’s illegal, it’s unconstitutional,” Schumer said. “Plain and simple, this is Project 2025.”
Diane Yentel, the president and CEO of the National Council of Nonprofits, issued a statement on social media calling the order a “potential 5-alarm fire for nonprofits.”
“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,” Yentel said. “This order could decimate thousands of organizations and leave neighbors without the services they need.”
Legal challenges could come quickly
The memo is likely to prompt legal challenges from entities who were set to receive the now-frozen funds, and they could come quickly. Orders from lower courts directing agencies to turn the spigot back on while legal proceedings continue could eventually lead the Justice Department to seek emergency relief from the Supreme Court.
Critics of the most recent action from the Trump administration have argued that the budget office’s move to temporarily withhold federal funds violates the Impoundment Control Act, a 1974 law that lays out the framework for the president’s ability to freeze certain funds appropriated by Congress.
But Russ Vought, Mr. Trump’s pick to lead the Office of Management and Budget, told the Senate panel holding his confirmation hearing last week that the president believes the Impoundment Control Act is unconstitutional, and said he agrees with that assessment.
Sen. Patty Murray of Washington, the top Democratic appropriator, said she’s urging Sen. Lindsey Graham, a Republican appropriator, to hold Vought’s nomination for OMB director, while calling the memo a “brazen and illegal move” with an “unprecedented” scope.
“Republicans should not advance that nomination out of committee until the Trump administration follows the law,” Murray said.
Graham hasn’t spoken with Vought but told reporters he plans to talk with OMB about the freeze.
“I don’t mind reviewing things,” he said. “I just want to find out what happened and what’s the end game. And what do you tell people when they ask?”
Graham said, “People are asking, like, what does this mean? How long does it last? Reasonable questions.”
“Some agencies, like centers to help abused children — they rely on their grant money to meet their budget,” Graham said. “I want to try to find out, you know, what’s happening here and give people back home some idea of what to expect.”
contributed to this report.
