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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, with White House press secretary Karoline Leavitt stating that efforts to freeze federal funding would continue.

Freeze

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On January 27, 2025, a memo was released by Matthew Vaeth – acting director for the Office of Management and Budget (OMB) of the Executive Office of the President of the United States – ordering federal agencies to "temporarily pause all activities related to obligations or disbursement of all Federal financial assistance" prior to 5 P.M. EST on the following day.[1] Vaeth cited a variety of concerns as reasoning for the funding freeze, including diversity, equity, and inclusion programs (DEI), "Marxist equity", "woke gender ideology", transgenderism, and the Green New Deal.[1][2]

The exact extant of the order, and for which programs funding was paused, was initially unclear. Vaeth's memo specifically exempted Social Security and Medicare from the order, as well as "assistance provided directly to individuals".[1][3][4] 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.[3] 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.[4]

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.[4][5] 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.[5]

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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 an injunction temporarily blocking the pause in funding. AliKhan scheduled a hearing on the matter for February 3.[2][6] A group of 23 state and territorial attorneys general, all affiliated with the Democratic Party, filed another lawsuit against the order shortly afterwards.[2]

Several Democratic officials, including Senator Patty Murray, described the funding pause as illegal and unconstitutional.[4][7] Senate Democratic leader Chuck Schumer described it as "lawless, destructive, cruel".[5] 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.[8] 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".[4][9] 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".[9]

On January 29, the OMB retracted the initial memo. Leavitt stated that the retraction was necessary to end confusion over the order in the aftermath of the injunction, noting that it would not halt the federal funding freeze.[9][10]

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.
  2. ^ a b c Megerian, Chris; Whitehurst, Lindsay (January 28, 2025). "Federal judge temporarily blocks Trump administration freeze on federal grants and loans". Associated Press.
  3. ^ a b Cancryn, Adam; Ward, Myah (January 28, 2025). "White House defends dramatic federal funding freeze". Politico. Retrieved January 28, 2025.
  4. ^ 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.
  5. ^ 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.
  6. ^ "Federal Judge Blocks Trump's Freeze of Federal Grant Funds". The New York Times. January 28, 2025. Retrieved January 28, 2025.
  7. ^ 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.
  8. ^ Hals, Tom; Sullivan, Andy (January 28, 2025). "Explainer: Trump's spending pause and its legality". Reuters. Retrieved January 28, 2025.
  9. ^ 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.
  10. ^ 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.
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