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2025 United States federal government grant pause

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On January 27, 2025, the Office of Management and Budget (OMB), an office of the Executive Office of the President of the United States, ordered a pause to the disbursement of federal grants and loans, to take effect the following day. Acting director Matthew Vaeth characterized the order as necessary to prevent funding for diversity, equity, and inclusion (DEI) programs and woke ideals. Although the exact extent was initially unclear, the memo exempted federal assistance to individuals from the pause, including programs such as Social Security and Medicare. Despite this, reimbursements for programs such as Medicaid and Head Start were inaccessible to many on the 28th. The OMB released a second memo clarifying the order, stating that it was necessary to implement President Donald Trump's recent executive orders.

The pause was stayed on January 28 by district court judge Loren AliKhan, prior to its 5 P.M. EST deadline. The following day, the OMB retracted the initial memo, but White House press secretary Karoline Leavitt stated that efforts to freeze federal funding would continue anyway. On January 31, a second federal district judge, John J. McConnell Jr., held that there was a likelihood that the funding freeze violated the United States Constitution and U.S. law and issued a temporary order blocking its implementation in 22 states and the District of Columbia.

OMB actions

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Release of memo and spreadsheet

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On January 27, 2025, memo M-25-13 was released by Matthew J. Vaeth – acting director for the Office of Management and Budget (OMB).[1][2] The memo said that the federal government of the United States in fiscal year 2024 spent over $3 trillion in federal "financial assistance, such as grants and loans", criticized the usage of "resources to advance Marxist equity, transgenderism, and [Green New Deal] social engineering policies", and then instructed "federal agencies to identify and review all federal financial assistance programs and supporting activities consistent with [President Trump's] policies and requirement".[1][3][4]

Simultaneously, the memo instructed federal agencies to "temporarily pause all activities related to obligation or disbursement of all federal financial assistance, and other relevant agency activities that may be implicated by [Trump's] executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the Green New Deal."[2] The pause was to start at 5 p.m. EST on January 28, 2025.[5] The memo continued that the pause would allow the Trump administration to "determine the best uses of the funding for those programs consistent with the law and [Trump's] priorities", while "Medicare or Social Security benefits" and "assistance provided directly to individuals" were exempted from being paused.[6][7]

Along with the memo, OMB published a spreadsheet of around 2,600 federal programs for review, including Medicare, Social Security benefits, Medicaid, rental assistance, Pell grants, Head Start and the Supplemental Nutrition Assistance Program.[8]

Question-and-answer sheet

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On the afternoon of January 28, the OMB released a question-and-answer sheet declaring several schemes (Medicaid, SNAP, "funds for small businesses, farmers, Pell grants, Head Start, rental assistance", student loans, "any program that provides direct benefits to Americans", and any "program not implicated by the President’s Executive Orders") to be exempt from the federal funding freeze.[9][10][11] The executive orders by Trump that were highlighted are Protecting The American People Against Invasion, Reevaluating and Realigning United States Foreign Aid, Putting America First in International Environmental Agreements, Unleashing American Energy, Ending Radical and Wasteful Government DEI Programs and Preferencing, Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government, Enforcing the Hyde Amendment.[12]

Karoline Leavitt
@PressSec
 X logo, a stylized letter X

This is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo. Why? To end any confusion created by the court's injunction. The President's EO's on federal funding remain in full force and effect, and will be rigorously implemented.

Jan 29, 2025[13]

Withdrawal of memo; continuation of pause

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On January 29, the OMB purported to retract the initial memo. Leavitt stated that the retraction was necessary to end "confusion" over the order in the aftermath of the injunction but that it would not halt the federal funding freeze.[14][15] A federal district judge described this as a rescission "in name-only" and possibly intended "to defeat the jurisdiction of the court," concluding that the "substantive effect of the directive carries on".[16]

Initial aftermath

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The exact extent of the order, and for which programs funding was paused, was initially unclear.[1][17][18] White House press secretary Karoline Leavitt defended the freeze order the following day, stating that it was necessary to prevent public funding of "transgenderism and wokeness", although was initially unable to confirm whether programs such as Medicaid and Meals on Wheels would be affected by the pause in funding.[17] In a second memo released on January 28, the OMB clarified the order, stating that it was necessary in order to follow the recent series of executive orders issued by President Donald Trump, of which many aimed to curtail funding for federal foreign aid and DEI programs.[18]

Despite federal statements that the program would be unaffected, Senator Ron Wyden reported that a web portal used to access Medicaid funding was inaccessible for doctors in all states. Preschools noted that they were unable to receive reimbursements through the Head Start program.[18][19] A memo obtained by the news agency Reuters reported that the Department of Justice was preparing to freeze four billion dollars of funding following the order.[19]

Several Democratic officials, including Senator Patty Murray, described the funding pause as illegal and unconstitutional.[18][20] Senate Democratic leader Chuck Schumer described it as "lawless, destructive, cruel".[19] Legal opponents cited the Impoundment Control Act of 1974, which bars the president from withholding funding for political purposes, subject to review by the Government Accountability Office.[21] Trump and OMB director nominee Russell Vought have previously advocated for impoundment and described the 1974 act as unconstitutional. Republican leaders defended the funding pause, stating that it was an appropriate use of executive power; House Speaker Mike Johnson described it as "an application of common sense".[18][14] Republican Senator Kevin Cramer stated on January 28 that he supported the pause in spending, adding that Trump was testing his own authority and "getting some guidance that presidents have more authority than they'd traditionally used".[14]

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Following a lawsuit by the legal nonprofit Democracy Forward, Judge Loren AliKhan of the United States District Court for the District of Columbia issued a "brief administrative stay" temporarily blocking the pause in funding until a hearing set for February 3. The stay went into effect just minutes before the pause was scheduled to begin.[22][23][24]

After the attorneys general of 22 states (Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, North Carolina, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Washington, and Wisconsin) and the District of Columbia sued, Judge John J. McConnell Jr. of the United States District Court for the District of Rhode Island ruled in their favour on January 31, 2025, by issuing a temporary restraining order to block the funding pause indefinitely in these states and D.C.[25][26] McConnell described the OMB memo as "wide-ranging, all-encompassing, and ambiguous", adding that it "cites no legal authority" and in any case, "no federal law would authorize the Executive’s unilateral action here", which contravenes "the separation of powers".[27][28][29]

Rejecting the Trump administration's argument as "constitutionally flawed", McConnell explained: "The executive branch has a duty to align federal spending and action with the will of the people as expressed through congressional appropriations, not through 'presidential priorities'" as claimed by the Trump administration.[26] Furthermore, the Trump administration had argued that the retraction of the OMB memo rendered the case moot, but McConnell rejected this, citing a tweet by Press Secretary Karoline Leavitt denying "rescission of the federal funding freeze".[28] McConnell wrote: "The evidence shows that the alleged rescission of the OMB directive was in name-only and may have been issued simply to defeat the jurisdiction of the courts. The substantive effect of the directive carries on", warranting judicial action.[26]

References

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  1. ^ a b c Stein, Jeff; Bogage, Jacob; Davies, Emily (January 28, 2025). "White House pauses all federal grants, sparking confusion". The Washington Post. Archived from the original on February 1, 2025. Retrieved February 1, 2025.
  2. ^ a b Uebelacker, Erik (January 29, 2025). "White House rescinds controversial federal aid freeze memo". Courthouse News. Archived from the original on 2025-01-31. Retrieved January 30, 2025.
  3. ^ Holland, Steve; Ward, Jasper (January 28, 2025). "White House pauses federal grant, loan other assistance programs". Reuters. Retrieved February 1, 2025.
  4. ^ Hals, Tom; Sullivan, Andy (January 29, 2025). "Trump's spending pause and its legality". Reuters. Retrieved February 1, 2025.
  5. ^ Holland, Steve; Cohen, Luc; Sullivan, Andy (January 29, 2025). "Trump aid freeze stirs chaos before it is blocked in court". Reuters. Retrieved February 1, 2025.
  6. ^ Farrar, Molly (January 28, 2025). "Mass. is suing over federal funding freeze as Medicaid system appears to be down". boston.com. Retrieved February 1, 2025.
  7. ^ Hansler, Jennifer; Rose, Andy; Luhby, Tami; Cole, Devan (January 28, 2025). "Judge temporarily blocks part of Trump administration's plans to freeze federal aid". CNN. Retrieved February 1, 2025.
  8. ^ "Which Federal Programs Are Under Scrutiny? The Budget Office Named 2,600 of Them". The New York Times. January 28, 2025. Archived from the original on January 30, 2025. Retrieved February 1, 2025.
  9. ^ Tsui, Karina; Boyette, Chris (January 29, 2025). "A judge paused a freeze on federal funding, but many facets of American life are left in limbo. Here's what we know". CNN. Retrieved February 1, 2025.
  10. ^ Natanson, Hannah (January 28, 2025). "Here's what we know — and don't know — about the Trump funding freeze". The Washington Post. Archived from the original on January 31, 2025. Retrieved February 1, 2025.
  11. ^ Deng, Grace (January 29, 2025). "Here's What We Know About Trump's Pause on Federal Spending". Snopes. Retrieved February 1, 2025.
  12. ^ "Trump Administration Pauses Federal Financial Assistance". Holland & Knight. January 28, 2025. Retrieved February 1, 2025.
  13. ^ Karoline Leavitt [@PressSec] (Jan 29, 2025). "This is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo. Why? To end any confusion created by the court's injunction. The President's EO's on federal funding remain in full force and effect, and will be rigorously implemented" (Tweet) – via Twitter.
  14. ^ a b c Sprunt, Barbara; Moore, Elena; Walsh, Deirdre; Khalid, Asma; Keith, Tamara (January 29, 2025). "New memo, White House response adds to confusion on federal funding freeze". NPR. Retrieved January 29, 2025.
  15. ^ Kapur, Sahil; Alexander, Peter; Santaliz, Kate (January 29, 2025). "Trump administration rescinds order attempting to freeze federal aid spending". NBC News. Retrieved January 29, 2025.
  16. ^ "Federal judge temporarily blocks Trump administration's funding freeze". CBS News. January 31, 2025. Retrieved February 1, 2025.
  17. ^ a b Cancryn, Adam; Ward, Myah (January 28, 2025). "White House defends dramatic federal funding freeze". Politico. Retrieved January 28, 2025.
  18. ^ a b c d e Tony, Romm; Jeff, Stein; Jacob, Bogage; Emily, Davies (January 28, 2025). "Federal judge blocks Trump federal spending freeze after a day of chaos". The Washington Post. Retrieved January 28, 2025.
  19. ^ a b c Holland, Steve; Cohen, Luc; Sullivan, Andy (January 28, 2025). "Trump aid freeze stirs chaos before it is blocked in court". Reuters. Retrieved January 28, 2025.
  20. ^ Brunner, Jim; Elise, Takahama (January 28, 2025). "Trump order pausing federal grants is illegal overreach, says Sen. Murray". The Seattle Times. Retrieved January 28, 2025.
  21. ^ Hals, Tom; Sullivan, Andy (January 28, 2025). "Explainer: Trump's spending pause and its legality". Reuters. Retrieved January 28, 2025.
  22. ^ Schonfeld, Zach; Lee, Ella (January 28, 2025). "Judge temporarily blocks Trump's plan to freeze federal aid". The Hill. Retrieved February 1, 2025.
  23. ^ Megerian, Chris; Whitehurst, Lindsay (January 28, 2025). "Federal judge temporarily blocks Trump administration freeze on federal grants and loans". Associated Press.
  24. ^ "Federal Judge Blocks Trump's Freeze of Federal Grant Funds". The New York Times. January 28, 2025. Retrieved January 28, 2025.
  25. ^ Schwartz, Mattathias (January 31, 2025). "Federal Judge Orders White House to Keep Money Flowing to 22 States". The New York Times. Archived from the original on February 1, 2025. Retrieved February 2, 2025.
  26. ^ a b c Uebelacker, Erik (January 31, 2025). "Judge blocks Trump's federal funding freeze". Courthouse News. Retrieved February 2, 2025.
  27. ^ Raymond, Nate (February 1, 2025). "US judge temporarily blocks Trump from freezing federal funding". Reuters. Retrieved February 2, 2025.
  28. ^ a b Barnes, Daniel; Gregorian, Dareh (February 1, 2025). "Second judge blocks Trump's federal aid funding freeze". NBC News. Retrieved February 2, 2025.
  29. ^ Micek, John (February 1, 2025). "Mass. AG Campbell claims win after another federal judge puts brakes on Trump funding freeze". masslive.com. Retrieved February 2, 2025.
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