Trump Administration Halts Federal Loans and Grants Nationwide

Late on Monday, the Trump administration directed federal agencies to pause disbursement while the government conducts an audit to ensure that spending is aligned with President Trump’s agenda.

Matthew Vaeth’s memo, the acting director of OMB (Office of Management and Budget), instructs federal agencies temporarily to pause “all activity related to commitment or disbursement of Federal financial assistance.”

The memo says that “this temporary pause gives the Administration the time to review agency programs and determine the best use of funding for these programs following the law and President’s priority,”

The memo states that Social Security and Medicare benefits and direct assistance to individuals should not be affected.

According to the memo, the pause will begin at 5 pm on Tuesday. The memo says that OMB can grant exceptions to certain awards individually.

The federal agencies have been instructed to review the impact of Trump’s executive orders, which he signed in his first week as president. These orders dealt with border security, federal workers, ending “weaponization”, the military, and other aspects.

The White House has not responded to a comment request on the memo.

Senate Minority leader Chuck Schumer (D.Y.), in a late-Monday statement, lambasted this move. He said that the pause of federal disbursements was “blatantly against the law,” and expressed doubts about whether it is a temporary halt.

“Congress approved the investments, and they are not optional. They are law.” Schumer stated that these grants benefit people from red and blue states. They support families and help parents raise children, as well as strengthen communities.

He added, “Donald Trump’s Administration is putting at risk billions upon millions of dollars of financial assistance and community grants that benefit millions of Americans. It will result in missed rent payments, payrolls, and other financial obligations, this chaos will affect everything from universities to charities.”

Trump and Russell Vought (his nominee to head the OMB) have indicated that they might seek to increase presidential authority over OMB. Trump has also spoken about using his presidential authority to challenge the Impoundment Control Act and hold back certain funds appropriated by Congress.