US President Donald Trump has ordered a temporary halt on federal grants, loans, and other financial aid. This action was outlined in a government memo verified by CBS News. The memo directs agencies to align their spending with the president’s priorities. Medicaid and Social Security benefits, however, are specifically exempt from this pause.
Impact and Criticism of the Pause
The full implications of the decision remain unclear, but critics warn of widespread disruptions to essential programs. Diane Yentel of the National Council of Nonprofits expressed concerns that cancer research, food assistance, and suicide hotlines could be affected. Democratic leaders have strongly opposed the move, describing it as “unprecedented” and “devastating.”
Senator Patty Murray and Congresswoman Rosa DeLauro wrote to the White House, urging the administration to uphold the law and deliver federal resources as mandated. Senate Minority Leader Chuck Schumer criticized the decision, warning of potential missed payrolls, rent payments, and chaos across universities and nonprofit organizations.
Details of the Memo and Broader Context
The memo, signed by acting Office of Management and Budget (OMB) Chief Matthew Vaeth, instructs agencies to temporarily halt financial assistance programs, including those tied to foreign aid, nongovernmental organizations, and environmental initiatives. Agencies must pause new awards and delay disbursing funds for existing awards until a review is completed. A February 10 deadline has been set for agencies to report affected programs.
This pause follows a similar decision last week by the State Department, which halted nearly all foreign assistance. Exceptions were made only for emergency food aid and military funding for Israel and Egypt. These actions align with an earlier executive order calling for a 90-day pause on foreign aid to ensure its consistency with Trump’s policies.
The U.S., the world’s largest donor of international aid, spent $68 billion on such programs in 2023. The current suspension is expected to face legal challenges, as the paused funding was authorized by Congress. So far, the White House has not officially commented on the leaked memo.
