President Donald Trump has ordered a sweeping review of federal funding programs, halting trillions of dollars in financial assistance across various government agencies to ensure compliance with his administration’s new priorities. The pause applies to initiatives in areas such as education, health care, housing, disaster relief, and foreign aid, with a focus on identifying and eliminating programs tied to diversity, equity, and inclusion (DEI), as well as other initiatives labeled “woke.”
A leaked memo from the Office of Management and Budget (OMB), signed by acting director Matthew Vaeth, instructed federal agencies to halt all activities related to the obligation or disbursement of financial assistance until they complete a review of their programs. Agencies have been given until February 10 to submit detailed reports identifying initiatives subject to the pause.
The White House clarified that the funding freeze is not intended to impact direct assistance to individuals, such as Medicare, Social Security, or federal student loans. “This is simply guidance for agencies to review if grants, loans, and programs are in compliance with the president’s executive orders,” a senior administration official told DailyMail.com. “If the activity is not in conflict with the president’s priorities, it will continue with no issues.”
🚨🇺🇸TRILLION-DOLLAR FREEZE: TRUMP HITS PAUSE ON ALL FEDERAL FUNDING
In a sweeping move, the White House just ordered every federal agency to stop all grants and loans – effective tomorrow at 5pm.
White House Office of Management and Budget acting director Matthew Vaeth:… pic.twitter.com/OybR7x4mLI
— Mario Nawfal (@MarioNawfal) January 28, 2025
The OMB memo reflects President Trump’s efforts to reshape the federal bureaucracy, aligning it with his campaign promises to end government spending on DEI programs, “woke” gender ideology, environmental policies tied to the Green New Deal, and foreign aid not aligned with his “America First” agenda.
Democratic lawmakers have expressed strong opposition to the directive, describing it as overreach. Senate Minority Leader Chuck Schumer stated, “Congress approved these investments, and they are not optional; they are the law.” Senators Patty Murray (D-Wash.) and Rosa DeLauro (D-Conn.), top members of the Appropriations Committees, also criticized the pause, calling it “breathtaking and unprecedented.” They warned of potentially devastating consequences across the country if funding remains frozen.
However, legal experts note that the president has some authority to temporarily withhold spending for review under the Impoundment Control Act of 1974, though its scope has been a topic of debate. Trump has previously described the law as unconstitutional and has called for its repeal or review by the Supreme Court.
One of the most immediate impacts of the memo is on U.S. foreign aid. The State Department has issued a global stop-work order for all existing assistance programs and paused new aid disbursements. This includes humanitarian aid, where the U.S. has been the world’s largest single donor. In fiscal year 2023, the U.S. disbursed $72 billion in foreign assistance, accounting for 42% of global humanitarian aid tracked by the United Nations.
Trump hitting “pause” on all federal funding reminds me of this scene from Iron Man
He is doing what’s right for the citizens of this country and our children’s future.
You can’t fix a problem if you haven’t identified the problem.
Pause, assess, repair.
America first! 🇺🇲 pic.twitter.com/HdKSWSG8PY
— Ryan Tyre 🇺🇸 (@ryantyre) January 28, 2025
In addition to financial assistance freezes Trump’s administration has begun a broad restructuring of federal agencies, reassigning or placing hundreds of career officials on leave. This includes significant changes at the U.S. Agency for International Development (USAID), where dozens of employees have been placed on administrative leave for actions deemed inconsistent with the president’s executive orders. Acting Administrator Jason Gray issued a memo to USAID employees warning of disciplinary actions for any staff attempting to circumvent the new policies.
The Trump administration’s actions follow a broader push to redefine government priorities and spending, with the president vowing to remove elements of the federal bureaucracy he views as obstructive or misaligned with his policy agenda. While the full impact of the funding review remains to be seen, the directive has already sparked significant political and operational responses across federal agencies.
