WASHINGTON (AP) — The White House is pausing federal grants and loans starting Tuesday as President Donald Trump’s administration begins an across-the-board ideological review of its spending, causing confusion and panic among organizations that rely on Washington for their financial lifeline.
Administration officials said the decision was necessary to ensure that all funding complies with Trump’s executive orders, which are intended to undo progressive steps on transgender rights, environmental justice and diversity, equity and inclusion, or DEI, efforts.
They also said that federal assistance to individuals would not be affected, including Social Security, Medicare, food stamps, student loans and scholarships.
However, the funding freeze could affect trillions of dollars, at least temporarily, and cause widespread disruption in health care research, education programs and other initiatives. Even grants that have been awarded but not spent are supposed to be halted.
“The scope of this illegal action is unprecedented and could have devastating consequences across the country,” said Sen. Patty Murray of Washington, the top Democrat on the Senate Appropriations Committee. “For real people, we could see a screeching halt to resources for child care, cancer research, housing, police officers, opioid addiction treatment, rebuilding roads and bridges, and even disaster relief efforts.”
Senate Minority Leader Chuck Schumer, a Democrat from New York, called it “more lawlessness and chaos in America.”
It’s unclear from the White house memo how sweeping the pause will be. Vaeth said all spending must comply with Trump’s executive orders.
Vaeth wrote that “each agency must complete a comprehensive analysis of all of their Federal financial assistance programs to identify programs, projects, and activities that may be implicated by any of the President’s executive orders.” He also wrote that the pause should be implemented “to the extent permissible under applicable law.”
The Environmental Protection Agency, which distributes billions of dollars, confirmed that it would implement the pause to “align federal spending and action with the will of the American people as expressed through President Trump’s priorities.”
Washington is a hub of spending that flows to various departments, local governments, nonprofits and contractors, and the memo has left countless people who are dependent on that money wondering how they will be affected.
The pause is the latest example of how Trump is harnessing his power over the federal system to advance his conservative goals. Unlike during his first term, when Trump and many members of his inner circle were unfamiliar with Washington, this time he’s reaching deep into the bureaucracy.
“They are pushing the president’s agenda from the bottom up,” said Paul Light, an expert on the federal government and professor emeritus of public service at New York University.
He also said there are risks in Trump’s approach, especially with so many voters reliant on Washington.
“You can’t just hassle, hassle, hassle. You’ve got to deliver.”